Despite the upgrade in her lifestyle, friends found Wendi charmingly cost-conscious. There was, for instance, her concerned meeting with one house manager. He must turn off the lights when no one is in the room. Of course, there was a chance Rupert welcomed her thrifty reflex, since, for all his wealth, he is not a particularly liquid billionaire.
“He’s the poorest mogul,” one former News Corp. exec claims. Though Rupert and Wendi seemed to be on a spending spree, most of Rupert’s wealth sits in the trust in News Corp. stock. The trust hasn’t distributed a penny in years. For Rupert the father, this is a point of pride. He likes that his kids, on paper among the richest on Earth, live on their salaries.
Lachlan, for one, didn’t complain. His salary was ample; he earned $7.8 million last year. Plus, as Lachlan says, “why should we get any money from the trust when my dad doesn’t?” Fortunately, Rupert has lately managed to convince the News Corp. board of directors to pay him more. In past years, his take-home, salary and bonus, had been in the $7 million range. In each of the past two years, he’s taken home an average of more than $20 million.
Clearly, another key to Rupert’s rejuvenation kick has been to add a new set of kids. Wendi has had two girls with him, ages 3 and 2. “It keeps me younger,” Rupert told a friend. “I love having kids around me, and I have a young wife, and it just seemed a natural thing.”
Rupert’s view of the trust was uncompromising. “The trust was conceived by me and created by me and all the kids will have all the votes,” he told a friend.
Wendi temporarily cut back traveling with Rupert, determined to focus on raising her kids. She taught them Mandarin—“Half of the conversations in this house I’m left out,” Rupert jokes. And she planned for their futures, which, as her friends point out, is only natural for a mother.
After all, as Nicole Lin, a Yale friend, delicately said to Wendi, “It would be nice if two people can grow up together, but it’s not your case.”
“I know,” Wendi said firmly.
And that knowledge, some say, set the stage for the recent family intrigue. A year ago, Rupert came to his adult children with a proposal for changing the terms of the trust that Anna felt she had tied up. “All my children will be treated equally” was the public version of Rupert’s idea. That was often interpreted to mean that Rupert wanted his two youngest girls to share in his wealth. But Rupert also insisted that his toddlers have votes in the trust.
Lachlan, seeing both parents happy, had made peace with the divorce. He usually took a forgiving attitude toward his dad. “If you are in your mid-seventies and have achieved what he’s achieved in life,” he explained to one associate, “you should go for it, whatever makes you happy and whatever you want to do. You should create your own rules.” Lachlan didn’t blame Wendi. “The kids, by and large, give Wendi the benefit of the doubt,” says a person familiar with the family. Lachlan, his brother, and his sister all have young kids, just like Wendi. “There’s never been a cross word. Whatever is under the surface has never spilled over.”
And yet, it was impossible for the kids to not see this proposed change as a land grab and, rightly or wrongly, to discern in it the hand of Wendi. “If you see your dad marry a young girl, and then you see the young girl being reasonably aggressive toward the family assets, no one human is not going to [question that],” explains one family friend.
Even Lachlan wondered who would actually have control of the trust. When Rupert dies, would Wendi then, through her children, control a third of the trust? “My mother definitely gave up something for us,” Lachlan felt. “We don’t want to give up something our mother gave up for us.”
The conflict laid out battle lines, for anyone who wanted to battle: Wendi against Anna, one generation of Rupert’s kids against another. And the conflict put Lachlan, the oldest son, in an uncomfortable position with his father. “Wendi gets upset about it,” he knew. But the kids assumed that Rupert voiced Wendi’s wishes. Lachlan talked of a compromise; this is not a family that enjoys intramural conflict. Still, a difficult pass is ahead. “I’m not going to lie to you,” Lachlan told one colleague. “It’s an issue.”
Rupert, as is his way, took an uncompromising view: “The trust was conceived by me and created by me and all the kids will all have votes.” Doting Rupert has a habit of getting his way, even if he has to jettison people to do it. “If anyone can unravel the [divorce] agreement, Rupert can,” said one former News Corp. exec.