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Fox Family Values

As his marriage to Anna unravels and his children sort out their allegiances (and News Corp. roles), will consummate control freak Rupert Murdoch start to lose his grip?

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In an age and an industry propelled by gossip, it's been damn hard to get people to talk about the Murdoch divorce. "Whaddaya think is going on there? Wow!" I've been prodding News Corp. executives. "Rupert and Anna are just going in different directions" is the pat, if sheepish, response.

The Murdoch butler, Philip Townsend, is sharing household secrets in a soon-to-be-published tell-all, titled Just Rupert, now being serialized in Punch, the English satirical fortnightly. It's a particularly English kind of memoir, so dry that you might easily think it was a Punch satire of an English butler's memoir -- imagine John Cleese as Murdoch. Judging by the memoir (and the embarrassed silence at News Corp.), you'd almost believe the Murdoch marriage will end without the emoting and public soul-searching we expect of celebrity divorces. Maybe so.

But I can't help thinking there's something bigger here. Bigger even than what will certainly be the largest divorce settlement in history -- considering the Murdoch holdings (the Fox television network and movie studio, one of the world's largest book publishers, a significant part of the British newspaper business, Asia's biggest satellite broadcasting system, Europe's biggest satellite broadcasting system, and control of big parts of the sports industry), plus 31 years of marriage and the community-property laws of California, where the Murdochs live and where Anna has filed for divorce.

No, I think we're at the beginning of the end of the Murdoch epoch.

My favorite Murdoch story involves this magazine and takes place 22 years ago. Murdoch, at 46, owned newspapers in Australia and in the U.K. and a paper in San Antonio, Texas. He had taken a summer rental in East Hampton, near the home of Clay Felker, the founder of New York Magazine, whom he invited to dinner, along with Felker's house guests, writers Aaron Latham and Susan Braudy (who told me the story). As the courses were served with the help of the Murdoch children, Elisabeth, Lachlan, and James, Felker talked about the unique position New York occupied in the city's social and media world and the remarkable talent the magazine had attracted. He mentioned, too, the increasing disputatiousness of New York's board of directors. Murdoch confined his conversation to observations about the price of paper (telling Braudy the reason he was in the U.S. was to buy forests). Over the next several months, Murdoch first bought the New York Post (Murdoch was introduced to Post owner Dorothy Schiff by Felker), then, with Felker continuing to confide in him about the problems with his board, entered into negotiations with New York's board members, who, over Felker's fierce protests, sold the magazine to him.

What a predator's instinct! What diabolical self-control!

Since that summer in East Hampton, Murdoch has not only built the world's premier global media empire (though he sold New York in 1991) but created the modern mogul. His mogul, unlike the more flamboyant version (from Louis B. Mayer to Robert Maxwell to Ted Turner), is focused to the exclusion of all other concerns on market dominance, and stands alone behind the curtain, working all the levers. With his imitators -- Barry Diller, Sumner Redstone, John Malone, Michael Eisner -- Murdoch has transformed the media business. It has become a business about control -- of markets, of outlets, of platforms, of politicians. Murdoch's mogul -- as the consummate control freak -- has been a remarkably enduring character.

Until now.

The butler's memoir paints him as all too human -- the lowbrow husband dragged off by the wife to museums and cultural holidays. News Corp. executives whom I count among my friends roll their eyes when they try to explain why the marriage ran aground and make Murdoch out to be just another workaholic nerd.

Since the separation, the official News Corp. line has been that it is an amicable parting, that Anna will remain on the board, and that she will continue to act in the best interests of the company.

Hello? It means something when rich people get divorced. After all, one of the big advantages of being rich is how easy it is to live apart without hassling over divorce -- what's all that far-flung real estate for? If you don't want to remarry, why would you ever divorce? (Nobody is suggesting the involvement of a third party.) In addition, Anna Murdoch is a famously devout Catholic. So what's that about? Count on it: When rich people get a divorce, it means war.

Somehow, the most elemental part not only of Murdoch's personal life but of his business empire may have spun out of his control.

These are the questions financial analysts are asking: What does Anna control now? What will she control after they settle the California divorce? And with which parent are the children aligned?

Ahh, the children. Succession.

Concurrent with the breakup of the Murdoch marriage has been the introduction of the aforementioned table servers, Elisabeth, Lachlan, and James (his eldest child, Prudence, from an earlier marriage, is not involved in the company), into the Murdoch organization and to the general public.

Ideally, in a family succession, you want to create a sense of inevitability. But already there's been a behind-the-scenes reshuffling. Elisabeth, now 30, had been heir apparent. After her marriage to Vassar classmate Elkin Pianim, the son of a once-imprisoned opposition figure in Ghana, the couple went to L.A.; purchased, with Murdoch money, a television station in San Luis Obispo; displayed Murdoch-quality ruthlessness in cutting staff; and sold the station in 1996 for a handsome return.

The couple decamped to London, where Elisabeth joined her father's Sky TV as general manager (although Sam Chisholm, Sky's chief, continued to refer to her as "the Intern"). Husband Elkin invested the couple's profits from their television sale and put the money into a black-community London newspaper called New Nation. But 1997 was not a good year. Pregnant with their second child, her husband's business failing, Elisabeth was linked socially by non-Murdochnewspapers first with English-radio mini-mogul Chris Evans and then with P.R. impresario Matthew Freud (a Freud great-grandson). Elisabeth and Elkin have since separated and he's returned to the U.S.

The cost of appearing out of control was losing the title of heir apparent. There are reports that her mother feels Elisabeth was unfairly downgraded -- and speculation that this, the succession battle, would be a power play worthy of the divorce card. (Anna Murdoch is a novelist, after all.) The new crown prince is Lachlan, the 26-year-old first son. Last month, The New York Times Magazine ran a profile of Lachlan, written with the cooperation of Lachlan and News Corp., that presented a breathtakingly unremarkable young man without discernible accomplishment or point of view ("What is the hook to a story about Lachlan Murdoch?" the writer asked rhetorically). Then there is younger brother James, who for a time held the unique corporate title vice-president of new media and music, and who is now being groomed to take over as publisher of the New York Post.

One of the most compelling, and frightening, aspects of the Murdoch story has always been that there is only one guy at the center of all this -- purposefully and stoically alone. I used to see Murdoch jogging around the reservoir in Central Park (this is before he moved to Beverly Hills). I'd follow steps behind him -- a small man in a too-dapper running suit -- thinking how fragile he looked and how powerful he was. He is the most influential man in this most influential of businesses. Because of the rise of the Murdoch empire, virtually everyone in the media believes business justifies the product, any product; that control is a function of more and more control; and that the media, from newspapers to magazines to television to satellites to movies to books to the Internet, are one big ball of wax: in for a penny, in for a pound. The effects of the empire's coming apart will probably be dramatically transforming as well -- not only on Murdoch himself (it's not a pretty sight watching control freaks lose control) but on the media business that has followed after Murdoch, and on the rest of us, who are his customers, after all.

While Murdoch is clearly betting on the kids as a way to keep control, it is more likely his children, as disciplined as any children with unlimited wealth, will become part of the process of losing control -- along with growing old and having your wife turn on you.

E-mail: michael@burnrate.com


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