At News Corp., there is no more rigorously rehearsed drama than that of succession. The lead actor, of course, is the exceptional Rupert. “Pretty much everyone else is in orbit around him,” says one observer. Rupert might be a doting father; he is also Rupert the “ruthless,” as his wife of three decades would eventually conclude. He busted things that got in his way, like marriages or labor unions, and beat up governments through his newspapers, or sometimes on the phone. “What’s in it for me?” he baldly asked one prime minister who called for a favor. And he did it all with a spooky mix of fun, entitlement, and ready grievance. Like his beloved New York Post, Rupert can seem to have a chip on his shoulder. “He feels the world is out to get him,” recalls a person who knew Rupert when he first arrived in New York.
At News Corp., people talk about Rupert obsessively, usually as if he were a natural phenomenon, one that will never recur. Even among fellow media moguls, they point out, Rupert is singular. He’d long seemed bent on assembling an empire of media content, controlling TV, sports, news, movies, books, 175 newspapers, and even important chunks of the Internet. Then he had constructed an unparalleled distribution network. His TV stations reach 40 percent of American homes. His satellites deliver TV programs to five continents, covering China, India, Europe, the United States, the Middle East, as well as Australia. As Lachlan made sure to point out, “There’ll never be another Rupert Murdoch.”
For Rupert, succession was a sad exercise, premised as it was on his passing. For years, he refused to discuss it at all. Cured of prostate cancer at age 69, Rupert declared, “I’m now convinced of my own immortality.” Even into his seventies, he wouldn’t consider retirement. “Maybe I’m too selfish,” he tells friends. “As long as my brain and my body are ticking over, I just love it.”
And yet, the idea that the far-flung empire rested on one pair of aging shoulders unsettled investors. After Murdoch’s prostate cancer was made public, a tech sell-off combined to take $10.9 billion out of News Corp.’s stock, the greatest one-day loss in the history of the Australian market, where the company had long been listed. Grooming a successor—or appearing to—became good business.
The obvious choice from a corporate standpoint was Peter Chernin, News Corp.’s current president and COO, who is just 54. Chernin is a talented executive who comes from the entertainment side of the business, having worked at Lorimar films, Showtime, the Fox network, and the Fox studio.
Rupert liked to toss the kids in deep water. As one observer put it, “It’s a very grueling sort of special-ops training.” Rupert did it to test them. “I had the same experience,” he’d say.
Wall Street loves his competence, his steady, articulate manner. And Rupert works well with the tall, diplomatic Chernin, who professes to be at peace with the boss’s meddling ways. Not that Chernin didn’t have his differences with Rupert. For one thing, he’s an outspoken Democrat. Plus, there’s his affiliation with Hollywood, which Rupert, despite owning a good chunk of it, still manages to disdain—“Hollywood ignoramuses,” in Rupert’s phrase. Chernin, though, is a consummate politician and rarely overplays his hand. He smooths over what Rupert delightedly roils. In 2001, Chernin out-negotiated Disney on News Corp.’s behalf, for a reported $1 billion premium. Recently, he’d deftly maneuvered the elder Murdoch on his own behalf. Rupert, famous for shedding executives, signed Chernin to an investor-steadying, five-year contract worth $3.8 million a year (with a chance to earn up to $25 million more in bonuses)—“an unbelievable contract,” Lachlan mentioned to one exec.
Chernin might be brilliant and admired by Wall Street. He’d say he loves his current job. Still, other ambitions occasionally show themselves. As one Los Angeles colleague put it, “If Rupert drops dead tomorrow, he expects to be CEO.” And yet, he’ll never be a Murdoch, a key qualification for the top job. “Rupert really did . . . feel that he was creating a dynasty,” says Andrew Neil, who worked for Murdoch for a dozen years.
Rupert and Anna, who were married for 31 years, have three children: Elisabeth, 37; Lachlan, 34; and James, 32. Elisabeth, a Brearley grad, was sometimes said to be the brightest, but Rupert, like all kings, prefers a son. When Lachlan was 26, with a head of steam from running News Corp.’s Australian newspapers, Rupert summoned the children to New York and designated him, as the newspapers put it, “first among equals.” Later, he assigned Lachlan to report to Chernin.
From Lachlan’s point of view, the course to the top promised to be arduous and not entirely happy. First, it meant he had to implicitly envision, even root for, his father’s demise. Lachlan found this difficult to do. He was intensely protective of Rupert, a person who needs protection less than most. “From childhood, he always remembered everyone who had ever said anything critical about his father,” recalls one Australian friend. “He would always remember their name, he said. Always.”