In late July, Lachlan Murdoch, who is 34, took a business trip to Australia. He did this in his capacity as deputy chief operating officer of News Corp., the media empire assembled by his father, Rupert, who is 74. In addition to his important title, Lachlan was, as everyone knew, the person Rupert had designated to succeed him.
From Sydney, Lachlan put in a call to his dad—Lachlan usually refers to him, even in business settings, as “Dad.” Rupert likes to keep in touch with his vast kingdom via frequent phone calls, and for most of Lachlan’s adult life, few workdays passed without talking to his dad about some business matter. Mostly, Lachlan looked forward to these calls. Working closely with his dad had been, for a long time, one of the job’s pleasures. Lately, though, there’d been a shift, an unhappy one. Something unarticulated had come between father and son, creating a strain. Lachlan felt it keenly.
On the phone, the two at first chatted genially about the state of the company’s Australian papers, of which Lachlan was now chairman. Australia was one of their bonds; Rupert was born there, and Lachlan called it his spiritual home. The newspaper business was another. Rupert grew News Corp., now worth some $55 billion, out of a single Australian paper; Lachlan’s first assignment had been to help manage the Australian papers.
Then, unexpectedly, Rupert changed subjects. He brought up the company’s 35 TV stations. Lachlan ran those as well, along with the New York Post and HarperCollins. As Lachlan learned, Roger Ailes, the feisty CEO of Rupert’s beloved Fox News, had grabbed a minute with the boss. Lachlan knew the elder Murdoch adored Ailes, with whom he shared an affinity for hard-right politics. Also, Ailes was Rupert’s programming genius, the guy who had CNN on the run. Ailes liked to hatch programming ideas for Lachlan’s station group. The latest brainstorm was a news-based police series tentatively called Crime Line. Lachlan had resisted. He ran the stations, and he’d decided to hold off on Crime Line for a few months. “It was a 100 percent right decision if you want to save tens of millions of dollars,” Lachlan told his staff.
But Ailes had made a little fuss—“a whinge,” Lachlan called it, using the Australian term. “Why can’t I do the show?” Ailes asked Rupert.
“Do the show,” Rupert told Ailes. “Don’t listen to Lachlan.”
Lachlan had encountered meddling before—that was how his dad always operated. And the incident itself wasn’t a big deal. Still, on the plane ride back to New York, Lachlan couldn’t get it out of his head. He stewed; it recalled other small incidents. He loved his father, but he felt undercut, maybe humiliated. The feeling mushroomed. Lachlan began to brood not just about Crime Line but about his identity, in the company and out. Where was the respect due a successor, a deputy COO, a son?
If nothing changed, Lachlan imagined that his relationship with his dad might deteriorate, might not even survive the business. No wonder people noticed that happy-go-lucky Lachlan, with that tribal tattoo (visible when he rolled up his cuffs, which, like his dad, he did a lot), recently seemed “morose.”
“Look, at the end of the day, my dad’s not going to change. I would never ask him to,” Lachlan reflected to News Corp. colleagues. Still, Lachlan decided he had to say something. Rupert had to be made to understand that he couldn’t simply override his decisions. On July 25, a Monday, Lachlan called his father at News Corp.’s Los Angeles offices. He said he was flying out from New York to see him the next day.
At lunch, Rupert was attentive, receptive. He could think of a couple ways to address the problem. Different reporting lines, tinkering with the organization chart.
“Look, that’s not going to work,” Lachlan interrupted. The press might celebrate him as the person picked to one day run the world’s most encompassing media empire, but today, he couldn’t see this changing—he felt a little lost.
Lachlan didn’t totally understand it. He’d been at the company for eleven years. The emotion was new. “Not like an anger, not like a disappointment,” Lachlan later confided. “It’s more cathartic. It’s something that’s your whole life, my dad’s as well, his whole life.”
As their talk progressed, both became emotional. Lachlan hadn’t spent a lot of time thinking of himself apart from the company, or apart from his dad. It seemed to shake him. It’s just difficult to sort of uncouple your life and your identity from the company, he thought. But that’s what he now proposed. “I have to do my own thing,” Lachlan told his dad. “I have to be my own man.” Then the heir apparent walked away.
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.”
Second, there were his siblings to consider. Didn’t the others also want to reign? Rupert, being Rupert, declined to rule them out; nor, in fact, did he exclude Chernin, at least in the near term.
The kids are close—“insular,” says a family observer—bound by their many uprootings and also by being Murdochs. After all, they’d grown up in New York at a time when Rupert was, as one commentator put it, “an evil genius.” And yet each kid is, in his or her own way, fiercely competitive. “All the kids are confrontational, argumentative,” says one observer. Anna seemed sure the very idea of succession would bring out the worst in them and implored Rupert to put an end to it. It would spark “a lot of heartbreak and hardship for the kids,” she told an Australian journalist.
Yet the kids seemed unavoidably drawn to Dad’s business. How could it be otherwise? When they were growing up, Rupert was often absent. Lachlan recalls waking before dawn to catch a glimpse of Dad before he ran off. “Rupert is very devoted to his family, and he’s very devoted to his work,” says one observer. “The devotion to work is dominant.” And yet if Dad was distant, when he was there it was always a great time, which invariably involved the family business. “We would sit around the breakfast table and talk about newspapers, go through the paper, and my dad would say, ‘Good editing, bad editing, good story, bad, great headlines or not,’ ” Lachlan told one friend. Rupert’s newspaperman father had done the same with him. For the Murdoch kids, business was never off-limits. Indeed, business talk has long been the family’s emotional language.
“We could never take our family life out of business,” Anna said. “They were so intermingled.”
Perhaps Rupert viewed his kids as an extension of himself, an equivocal quality in a father. “As a father, you have to acknowledge your children in their own right,” says a person close to the kids. “I’m not sure Rupert is particularly good at that.” And yet, initially, all three children excitedly took to the business.
For Lachlan, the resulting closeness with his dad seemed a reward in itself. “You know him more than anyone else knows him,” he’d tell one News Corp. colleague. “He knows you more than people know you. You can be very honest with each other in ways that maybe other people can’t be.” Lachlan, like his siblings, often ends even business conversations with “I love you, Dad,” no matter who’s in the room.
“I have to be my own man,” Lachlan told his father over lunch. “I have to do my own thing.” Then news corp.’s Heir apparent walked away.
The media was fascinated with the story of a sibling rivalry with global stakes; the kids swore they never talked about it. And yet, each in his moment inevitably measured himself against his ability to do the top job. Were they ready? Were they in the running? Succession was a measure not only of corporate (and global) power but also of a distant father’s favor.
Publicly, the kids signed off on Lachlan’s elevation. Still, an executive who worked for James, younger than Lachlan by just fifteen months, recalls the day James spotted a newspaper article on his desk talking of Lachlan’s ascension. James had dropped out of Harvard to start a record label, Rawkus, with some classmates from Horace Mann. Rupert bought Rawkus and installed James to run News Corp.’s new-media division. Later, when James was just 30 years old, Rupert ushered him into the CEO position at British Sky Broadcasting, a publicly traded satellite company of which News Corp. owns 35 percent.
James grabbed the article from the exec’s desk. “He tore it up, crushed it into a ball, and stomped it on the ground,” recalls the exec.
“It’s not fucking true,” James announced.
Elisabeth, whom her father had sent to be general manager at BSkyB before James, once said she too hoped to be ready for the top job. “I have to hurry up,” she said, half-joking. “I have always and will always strive to be qualified and considered for that position.”
Even Prudence, Rupert’s daughter from his first marriage, who’d never worked at News Corp., seemed devastated at having been excluded from the charmed circle of candidates. When, in an article about succession, Rupert referred to “his three children,” Prudence was livid. “I rang up, I screamed at him, I hung up,” she told an Australian paper. “He then sent the biggest bunch of flowers—it was bigger than that sofa—and two clementine trees. The flowers kept coming, and he felt awful.”
Rupert sometimes explained his choice of Lachlan by saying he was the child who seemed to want it most. “He was the one who was always most interested,” Rupert told friends. “When he was a 13-year-old kid, he worked as an apprentice with the printers in the pressroom, cleaning all the oil and the grease off the press.” It didn’t seem a particularly flattering way to explain Lachlan’s favor, as if he were a hobbyist with peculiarly focused interests. And yet, no doubt, Rupert recognized in Lachlan his own passions. Lachlan was often said to be the least rebellious of the kids, with a crew cut and stable conservative politics. (James was a college dropout; Elisabeth married a Ghanaian son of a political prisoner, divorced him, and then, messily and to her parents’ initial dismay, married Matthew Freud, great-grandson of Sigmund.) Lachlan also shared Rupert’s deep, atavistic affection for newspapers. Rupert too had hung out in the pressroom of his father’s papers as a child and still loved their smell, their daily surprises, the provocation (as well as the political advantage) they afforded. He still occasionally phoned in stories. “He liked to call with a tip,” says one former business reporter at the Post. “He wouldn’t want us to follow it up. He wanted us to just go with it.”
Clearly, Lachlan was the child who most closely followed in Rupert’s footsteps. When Rupert was 21, his own sometimes difficult father—“I don’t think he’ll ever please him,” one friend was quoted as saying—died suddenly. Rupert returned home from Oxford University and marched into his father’s place, determined to grow the family newspaper business. At 22, straight out of Princeton, Lachlan shipped off to work for News Corp.’s Australian newspapers.
Of course, fatherhood (especially, perhaps, if a kingdom is at stake) is partly a sadistic enterprise. Rupert liked to toss the kids in the deep water. As one observer put it, “It’s a very grueling sort of special-ops training. You give them a job, and you don’t necessarily support them.” Rupert, though, seemed to like the idea. He did it “to test them,” he’d say. “I had the same experience.”
Rupert would defend Lachlan’s quieter side, his emotional streak, even an ill-advised investment. Still, he seemed to admire his children most when their ambitions showed—the more muscular, the better. “He believes in survival of the fittest,” Lachlan knew—even if those trying to survive are his kids.
At News Corp.’s Australian newspaper group, Lachlan entered as a middle manager “and pushed his way into the number-two position,” Rupert recounts with admiration. “Then he took over [all the papers].” Here, clearly, was Rupert’s favorite narrative: unchecked ambition, brawny self-assertion. Plus, of course, success. And in Australia, Lachlan was a terrific success, developing a very loyal team, efficient management, and a profit center. Outside of the newspapers, he’d take the lead in investing in a telecommunications company that lost a half-billion dollars. Still, “he did a fantastic job,” Rupert told everyone.
For Lachlan, Australia proved more than a business success. He stayed for a half-dozen years, and ever after would seem nostalgic, almost melancholy, for the place. Lachlan was born in London and spent most of his life and all his schooling in the United States; he speaks with an American accent, though he sprinkles his conversation with Australianisms like “G’day, mate.” “I’m most myself when I’m in Australia,” he once told a friend. Lachlan married an Australian beauty, the supermodel Sarah O’Hare. One thing she liked about him was his Australian-ness. “I never thought I’d meet anyone in love with Australia more than me,” she said in an interview with an Australian journalist.
Lachlan wasn’t always able to explain why Australia grips him so. He isn’t super-articulate—in that way he’s like Rupert, who, though disarmingly direct, isn’t hyperarticulate either. “I wish I could come up with the word,” Lachlan occasionally says, and at times he speaks with a slight, thoughtful stammer.
Perhaps it was that in Australia, a country of just 20 million, Lachlan was their Murdoch. Rupert was gone and, in his stead, Lachlan was a star, the celebrated, most handsome member of the imperial clan. The papers called him “Lachie” (and “gorgeous” and “most eligible”) and chronicled his parties and his girlfriends.
At the same time, Lachlan managed to strike the press as a regular guy, genuinely interested in others, nice. Often, Lachlan is described by what he is not. There’s a lack of showiness, of conceit, of pretension: regular-guy qualities that Lachlan likes to think of as Australian. The country, he thinks, is invitingly “egalitarian,” an odd term from the prince sometimes paired with friends Nicole Kidman and Russell Crowe. But Lachlan means that Australians are honest, open, and they take responsibility for themselves, virtues that, coincidentally, he believes make for a good leader. “In Australia, it was easy to be a leader,” Lachlan confided to a colleague. There were no messy politics. “You’re the boss, you take credit, you do your job, you learn from your mistakes.”
When Rupert contemplated moving News Corp.’s home from Australia to New York, Lachlan resisted, aggressively, “violently,” says one insider. “I certainly was the only person in the company who argued against the domicile change,” Lachlan would tell an associate. Everyone else, including Rupert, favored transferring the company from the Australian to the New York Stock Exchange. Among other things, the move was supposed to boost the value of News Corp.’s stock. Lachlan lost, though he hadn’t been wrong. The share price hasn’t popped. And the complicated revaluations that accompanied the transfer allowed John Malone, the cable mogul and the one businessman Rupert is said to fear, to gain a huge ownership position—18 percent of News Corp.—putting him in a position to potentially challenge the Murdoch family’s control.
In 2000, Lachlan moved to New York from Australia. Rupert bestowed on him the new title of deputy chief operating officer. “He wanted a big portfolio, as big as he could get,” says one senior News Corp. executive, who adds, “He grabbed too much too quickly.” Perhaps that was a problem. There were others. In New York and Los Angeles (he had offices on both coasts), Lachlan discovered an entirely different dynamic than in Australia. Gone was the independence afforded by the international date line—Lachlan now had the office next to his dad’s. Then there was the new corporate setting. If he’d found Australia open and honest, the new office was rife with astute political gamers, salesmen, often of themselves, which was how Lachlan sometimes viewed Chernin, his nominal boss. What’s more, some of these seemed eager to find fault with a boyish pretender who was, as one exec cheerfully stated, “breathing down my neck.”
To Lachlan, his designation as heir apparent seemed “almost a poisoned chalice.” Imagine the expectations. “Every meeting he has every day of his life, it’s the same problem,” says one observer. “They go, ‘Oh, I’m not sure he’s his father.’ It’s an impossible slide rule to be held up against, particularly when you’re learning and growing.”
Which, at the beginning, was part of Lachlan’s job. “Rupert asked me lots of times about where he should go next, what else should he learn,” says one senior News Corp. exec. “The true title would have been chairman-in-training. That would have made more sense.”
There was another difficulty from Lachlan’s viewpoint. COO Chernin and deputy COO Lachlan didn’t always get along, though Chernin claimed not to notice it. Lachlan had expected to spend half his time in Los Angeles, where Chernin is based. He purchased a house there. Lachlan’s view was that Chernin wasn’t really forthcoming. “Nobody at the film company or the network or production wanted to teach him,” says one exec. Chernin felt he gave him every appropriate opportunity, as a Los Angeles colleague heard, but that Lachlan “didn’t seize the day.”
Either way, the initial rupture was never fixed. If Rupert knew, he was, for once, happy to not intervene. Perhaps Lachlan, who rarely found fault with his dad, discovered in Chernin a convenient target. He was too Hollywood, a type Lachlan (like his dad) disliked instinctively. Plus, Chernin, at least to Lachlan’s fans, offered an unsavory skill set. “He’s known inside the company as very political, which I don’t think is a positive thing,” Lachlan told one exec. Lachlan disliked corporate intrigue—“I never sort of wanted to play the politics at all,” was the way he once put it.
Chernin, of course, didn’t openly shun the favored son. “He’s too clever for that,” says a News Corp. executive. Lachlan wasn’t a whinger. He quickly worked out that it would be best for him to work from New York. “I’d rather go there and build my businesses independently,” he told another executive.
Lachlan had been put in charge of an amalgam of businesses that, at the start, he knew little about, a trick Rupert liked to play on executives. Fortunately, most of his businesses were fairly well run. The one exception was the New York Post, Rupert’s last American paper, and one of the company’s smallest businesses.
When Lachlan decided to hold off on a new police reality-TV program Roger Ailes had dreamed up, Ailes made a fuss. “Why I can’t I do the show?” he whined to Rupert. “Do the show,” Rupert said. “Don’t listen to Lachlan.”
Lachlan, with his newspaper background, threw himself into the Post with a passion that drew wide admiration. Still, as a place to make your mark, the Post was a risky choice. News Corp. was an entertainment conglomerate, no longer a newspaper company. Plus, the Post had losses that have approached a million dollars a week. “No other public company would keep it open,” asserted a competitor.
“It was a job no one else particularly wanted,” Lachlan confided. (If Rupert goes, few believe that News Corp. will hold on to the Post.)
Still, Lachlan, like Rupert, loved newspapers and was determined to alter the Post’s money-losing ways. He slashed the newsstand price to 25 cents, launched two $1 million ad campaigns, built new $250 million presses. It was a great brand, just stale, Lachlan believed. If Lachlan could seem unassuming, he was hardly meek. “He can certainly fire people,” says a News Corp. exec. At the Post, he presided over a housecleaning. He brought in a new editor, Col Allan, a talented Australian who championed eye-catching headlines—axis of weasel is one of his favorites—and had a ready sense of fun, as well as belligerence. The Post’s circulation climbed sharply, pulling to within 60,000 copies of the Daily News, shrinking a gap of 260,000. Lachlan had predicted the paper would be profitable by 2004. Advertisers, though, resisted. Lachlan’s other reports—HarperCollins, the TV stations—had solid earnings in a soft advertising climate. The Post, however, loses an estimated $40 million a year.
While Lachlan worked to fill Rupert’s shoes, a wrenching family struggle unfolded that would pit Lachlan against his dad and, perhaps, complicate his mission. In a sense, it began because Anna, Rupert’s wife of three decades, was weary. Anna, a “formidable” personality, say friends, had met Rupert when she was a beautiful 18-year-old junior journalist for one of his Australian papers who one day interviewed the boss. A few years later, Rupert divorced his first wife and they were married. Anna had been an adoring mother and a devoted wife. Indeed, theirs was, by most accounts, a solid marriage. In New York, Anna carved out her own career, turning herself into a pop novelist—and even wrote one about a newspaper publisher.
Anna professed to not understand what drove Rupert, but she was sure of one thing: She wanted him to slow down, eventually to quit altogether. She mounted a campaign, arranging for a California artist to create a ten-panel mural for the lobby of the new building at Rupert’s Twentieth Century Fox, patterned on Rupert’s right index finger. “It was Anna’s clear hope that such symbols would allow her husband to walk away, his place in history secure,” wrote one of Murdoch’s most astute biographers, Australian journalist Neil Chenoweth.
World conquest, though, was far too engaging. “Rupert has never imagined the company without him,” said one News Corp. exec. And anyway, what would Rupert-in-retirement look like? The question struck Lachlan as ridiculous. “He’s never going to be the guy to go play golf or learn a new language or travel. It’s not in his DNA,” Lachlan thought. “He’d be miserable.” Rupert believed it might be worse. “I’d probably die,” he once said.
Rather than retire, Rupert proposed an alternative. Anna has spoken publicly only once, to Australian journalist David Leser. According to unpublished portions of that interview, Anna still recalls Rupert’s simple solution: “Let’s divorce.” In April 1998, Rupert’s Post columnist Liz Smith delivered the news of an “amicable separation”—amicable enough that Anna was to remain on News Corp.’s board.
The separation was, in fact, a mutual idea, but hardly amicable. “I wanted to save my marriage at all costs,” Anna recalls. But Rupert, Anna was sure, had a girlfriend. (Rupert claimed the girlfriend happened after the separation. “It’s a lie,” Anna said.) Rupert, in any case, had moved on. He was no longer interested in Anna. As if to punctuate that thought, he kicked her off the board. “[You’re] an embarrassment to everyone else on the board,” she recalls him saying. She formally resigned in person, walking out in tears, escorted by Lachlan, a fellow director. “You don’t hurt people for your own happiness,” was one of Anna’s parting thoughts.
Rupert met Wendi Deng, tall, attractive, bright, and two years older than Lachlan, in China, the next and perhaps greatest media frontier. Fresh out of Yale School of Management, Wendi, born in China, landed a job at Star TV, Rupert’s Hong Kong–based satellite business. One day, Rupert phoned to say he was on his way to Shanghai. Gary Davey, then-CEO of Star TV, was off in India and recalls scurrying to find someone to accompany Rupert. Wendi was only, at that point, an intern on the business-development team, but she speaks Mandarin (her English is still accented) and knows the system—her father had managed a factory of 20,000 employees for the Communist government. Plus, Wendi is naturally bright, outgoing, enthusiastic. “If she walked into the room, she would know everybody’s name, and they would know who she was really quickly,” says one Yale classmate. She possessed a slightly goofy, mischievous sense of humor—another friend recalls that once, after a long, hilly hike, Wendi insisted on a shortcut home: trespassing through backyards.
At a staff meeting with Rupert in Hong Kong, Wendi’s hand shot in the air. “She was the first person to put her hand up,” remembers one former exec. She asked an intelligent question. “At the end of the session, she came right up to him.”
Rupert likes bright women. “That was a very interesting question. I’d like to talk to you more,” he told her.
Wendi seemed the perfect person to accompany Rupert on his swing through China.
Wendi, it turned out, had also exited a relationship not long ago. Her first husband, Jake Cherry, was another older married man. Wendi had met Jake, his wife, Joyce, and their two kids in China a decade earlier. By Chinese standards, Wendi’s family was upper-middle class. Both her parents are college-educated engineers. The family had a car and a driver and was the first in their community to own a TV. Wendi knew lots of people who attended school in the United States. She wanted to do the same. Perhaps that’s why Wendi wanted English lessons from Joyce.
After a few months, Joyce left to take the kids home; school was starting. Jake remained to finish his job installing factories. Soon, Jake called his wife to suggest they sponsor Wendi in the United States while she attended college. She was an intelligent young woman (about 18 at the time) and full of promise, Jake told his wife.
Wendi lived with Jake and Joyce at their home in La Crescenta, California. She enrolled at California State, Northridge, where she was an outstanding student—“top 1 percent,” says one of her former professors.
“Meanwhile, though, she and my husband were having an affair,” says Joyce.
“None of this is my fault,” Wendi told Joyce. Jake, 30 years older than Wendi, said he loved her. Joyce kicked them out.
Jake and Wendi’s marriage lasted two years and seven months. Jake earned a decent living—$50,000 a year, according to divorce records—though not a lavish one. “She disappeared when he couldn’t provide her graduate school,” Joyce says. Though Jake suggested to the Wall Street Journal that Wendi’s feelings ended the marriage. She told him she couldn’t see him as other than a father figure. Soon, she was off to Yale, where, though outgoing, she was discreet—hardly any of her friends knew that she had been married.
Anna filed for divorce, coincidentally, in the same California court that granted Wendi and Jake their divorce, seven years later. Wendi sought no financial gain. In Rupert and Anna’s case, more was at stake. California, a community-property state, could have awarded Anna half the fortune—lately valued at more than $7.8 billion—and perhaps even some amount of corporate control.
Anna was furious at Rupert. “She was fired up,” Lachlan told a colleague. “She would have gone after my dad for everything.” Instead, Anna settled for the relatively modest figure of about $200 million, according to Chenoweth, who’s tracked every share of stock the Murdochs have sold since 1970. In return, she secured assurances on control of the major portion of the assets—not for her but for her kids. Anna was convinced by Rupert’s lawyers that she was setting aside the trust for the four children—Anna’s three, plus Prudence, whom Anna helped raise.
The trust is the A. E. Harris trust, which Rupert created decades ago and which holds 28.5 percent of News Corp.’s voting stock. The trust not only includes most of the family assets but also is the key to its control of News Corp.. “[The divorce agreement] controls the appointment of the trustees to the trust,” says Anna’s divorce attorney, Daniel Jaffe. According to the agreement, Rupert gets four votes; the four adult children receive one vote each. When Rupert dies, his votes disappear. The kids then control the assets and, also, the empire. It was an arrangement that Rupert could go for. He certainly wanted his kids to inherit News Corp., even if the agreement, technically, put the majority of his resources beyond his control. “All I know is that we have something set that cannot be touched about where the power and the shares lie in the family trust,” said Anna in an unpublished portion of her Australian interview.
In 1999, Anna married William Mann, whom she met in Southampton. Usually described as an investor, Mann was a two-time widower five years older than Rupert. His holdings, certainly in comparison to Anna’s, were modest. More important, Mann is charming, sociable, good company—and he’s there. Anna talks about how he butterflies lamb on the barbecue and how they attend church every Sunday. He plays golf, loves opera. They’ve been seen on the ski slopes. “He’s a nice old man” was Rupert’s view, the gently dismissive opinion repeated by other News Corp. execs.
On June 25, seventeen days after Rupert’s divorce came through, he married Wendi aboard his boat, Morning Glory, which he later sold to Silvio Berlusconi. Anna had wanted Rupert at home; Wendi happily traveled the world with him, sweetly holding his hand in the back of a sedan (Rupert thinks limousines pretentious). She accompanied him to China, where it must’ve seemed she was living a fairy tale. At dinner one evening, the daughter of the factory manager was seated next to the then-president of China. Rupert sat on the other side.
For Rupert, Wendi seemed to inaugurate a second youth. He had a personal trainer—“full time,” says one friend, who adds, “He’s in the best physical shape he’s ever been in.” Remarking on the boss’s vigor was now the order of the day. Rupert joined in, boasting like a cowboy about his physical prowess, even after prostate cancer. “I went to work every day throughout,” he says. It didn’t hurt that Michael Milken, Rupert’s onetime financier, a fellow prostate-cancer survivor and now longevity enthusiast, whispered in his ear, “We’re projecting average life expectancy to 110.”
Wendi’s job, one of them, was to remind Rupert of his vitality—in one of her rare public utterances, she was said to have told an associate that Rupert used Viagra but didn’t need it—and generally reflect back at him a more favorable view of his mortality. She watches Rupert’s diet, supervises his health, and sometimes teases him. She’s not the meek sort—Rupert doesn’t go for meek. “Are you going deaf, old man?” a colleague heard her say to Rupert. It was a tender if pointed jab. “She’s a very loving, supportive wife,” Rupert pronounced her.
Wendi doesn’t seem the typical trophy wife, brimming with social ambitions. For one thing, she doesn’t have the clothes for it. “I think she has ten pairs of shoes,” says friend Kathy Freston, wife of Tom, Viacom’s co-COO. (“Wendi, buy yourself some shoes,” Kathy told her. “Oh, I don’t need them,” Wendi said.) Yale rushed Wendi onto its management school’s board, but she didn’t seem an aspiring magnate. Lately, she had little to do with Rupert’s business and concentrated on running his life outside the office.
With Wendi, Rupert temporarily quit the Upper East Side apartment he’d shared with Anna and moved to a $7 million Soho loft, not far from a $5 million building Lachlan was renovating and conveniently near friends Amy Tan, the writer, and her husband. (They’d walk over to Amy’s for a cozy movie night—8 Mile with Eminem, say—Rupert in his casual new style, jeans and sneakers.) Wendi also renovated the “tired” London penthouse in Mayfair. Anna had favored reproduction Louis XV fireplaces. Wendi went for a retractable ceiling. Rupert did his part, snapping up a $44 million apartment, then the most expensive ever listed. It was Laurance Rockefeller’s former residence and is in the building in which Rupert and Anna raised Lachlan and his siblings. The symbolism was hard to miss; Rupert the Ruthless had erased the past four decades.
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.
It was against this backdrop that Lachlan’s relationship with his dad began to fray. Lachlan separated the two issues, that of business and that of trust; still, it seemed possible that feelings about one spilled into the other. Increasingly of late, Lachlan felt almost emasculated in business. Partly, it was in the nature of the prince’s post. Lachlan took offense at being taken for chairman-in-training. He was one of the world’s top media executives, with, by now, eleven years of distinguished service. “I think a lot of people could learn from me,” he’d tell one News Corp. exec.
Still, in the top echelons of News Corp., Lachlan felt chipped away at. The rupture with Chernin, his boss, hadn’t been repaired, or even officially noted. And Lachlan seemed to find himself on different sides of a string of business-strategy issues from Chernin. Moving the company from Australia was just one. “Lachlan isn’t as good a debater as Chernin, not even close, and Chernin has better command of the business,” says one News Corp. exec. “Lachlan had his points. He wasn’t wrong. These in the end are legitimate business questions, but each one Lachlan lost.”
Then there was Roger Ailes. “Roger’s the single biggest ego I’ve ever met,” said one former News Corp. executive. He was also a gifted bureaucratic operator as well as Rupert’s designated programming whiz. “You go to a programming meeting with Rupert and Ailes and you just don’t know if Rupert’s had a religious experience,” explained one insider. And lately, Ailes had ideas about what should run on Lachlan’s stations.
Some viewed Ailes as the kingdom’s Machiavelli. “Lachlan and I have a good relationship,” Ailes boasts. “He’s a nice, smart kid.” It was true, sort of. Lachlan took the view that Ailes couldn’t help himself. He importuned Rupert, he circumvented Lachlan, all was forgiven. “A leopard can’t change his spots,” Lachlan thought, and he didn’t hold it against him.
And then there was Rupert, with his supermarket-size ego, of which vast News Corp. could seem but an extension. One exec described the organization chart this way: Rupert on top, and under him a single straight line with everyone else. Rupert picks up the phone and calls anyone. He calls people below you, soliciting opinions on your business.
Maybe Lachlan was “thin-skinned,” as some said. No doubt the boss’s interference registered differently with a son, an infringement not just on his corporate prerogatives but on, as he’d put it, his identity. For Lachlan, it was a real dilemma. He adored his dad, even if he couldn’t quite come up for air with him in the vicinity.
Lately, Lachlan could feel his happiness sinking. He had a big title. Still, he wondered about the extent of his real power. As he told one insider, “A lot of peripheral players who are not necessarily responsible for your business have opinions on it and are talking about it. It’s just a lot more complicated.”
With Lachlan, the implied reference point is always Australia. There he’d been a leader—independent, respected, heeded, in an environment free of politics. “Do you think I could run the company from Australia?” Lachlan asked a friend not long ago.
Of course, another question, seldom asked, was whether Lachlan wanted to run the company at all.
With Rupert, it was never any single deal that took your breath away; it was what they added up to: his globe-girding ambition. Rupert wants to take over. Everyone assumed that Lachlan too wanted to run the world. Who wouldn’t? But what were Lachlan’s ambitions? When he thought about it, Lachlan realized that he hadn’t gone to News Corp. to gain power, prestige, and wealth. “That’s not why you decide to do go on the path you’re on,” Lachlan confided to an associate. “It’s not why you should ever lead a life, I believe.” Did Prince Charles really prefer to farm? “You got to go back to why you’re doing it in the first place,” Lachlan thought. “It’s because you wanted to show leadership and build businesses and run businesses and … run them in the way you want to run them.” You want to be your own man, perhaps in proximity to Dad, but not under his thumb. Now, as Lachlan put it, “you don’t have the leeway to run businesses in the way you want to.” Lachlan sometimes seemed less an aspiring media mogul than a New Age business seeker, one for whom building a business served as a ladder, not to wealth or influence, his birthrights, but to self-fulfillment. It was business as bildungsroman, in which constructing a company leads not to empire but to self-confidence, self-esteem, and happiness.
And then, finally, there was the dustup over Crime Line. Rupert probably didn’t say, ‘Don’t listen to Lachlan.’ But that’s how it registered with the son. “Lachlan just felt the stations were getting no respect,” says an exec close to him, “and Lachlan personified the stations. He’s up against Chernin, Ailes, and now his father’s doing it; well, add it all up.” Lachlan added it up this way to one colleague: “To get overridden for no reason, it’s not something you want to spend your life dealing with. Any exec in that position, I think, would have left.”
As he mulled his options, Lachlan spoke to his sister, Elisabeth, who’d been through a similar experience. Rupert had sent her to be managing director of BSkyB. “Liz’s credit was not given to her, and many of her failings she had her nose rubbed in,” was the impression of one News Corp. source. “It got to the point where she just thought, ‘Fuck this.’ And she walked out.” She now runs her own TV production company, Shine, in England, which recently sold a 15 percent stake to Sony—not Rupert’s Fox—a deal that valued her four-year-old company at $60 million.
“It’s easier to be a Murdoch outside of News Corp. than inside,” Liz has said, a sentiment she no doubt communicated to Lachlan.
James, the last Murdoch offspring left at News Corp., is, for the moment, insulated. He’s in England, running BSkyB, a public company with its own board of directors. Though Rupert is board chairman, and pressured the directors to appoint James, he’s not in the office next door. Plus, James’s latest earnings, released five days after Lachlan’s resignation, were spectacular, which also ensures independence. People sing his praises, even members of the News Corp. inner circle. He’s said to be steely, smart, articulate, good in a room. He has that ineffable quality that makes a leader. The implied comparison is with Lachlan, though Lachlan doesn’t take it that way. To the older brother, BSkyB is James’s Australia.
Thinking about James, Lachlan told a colleague, “I should have stayed a year or two longer in Australia. What I gave them was fixed and running well. I should have stayed there. See the fruits of your efforts.” And that’s what he counsels James to do. “He’s done a great job and should stay with this company for a couple of years and drive it and show the world, then maybe come back.”
For Rupert, Wendi seemed to inaugurate a second youth. “He’s in the best physical shape he’s ever been,” says one friend. Remarking on the boss’s vigor was now the order of the day.
Rupert wasn’t completely surprised by the direction of Lachlan’s thinking. In recent months, Lachlan had gone to his dad with some of his frustrations. Rupert realized that relating to a boss who is also your father can be challenging, though he figured that was Lachlan’s challenge. “Lachlan found it a little bit difficult. It shouldn’t be, but I think he found that,” Rupert told a friend.
For Lachlan, though, the stakes seemed vaster than his title or his prerogatives. “You don’t want to wake up in ten years’ time and feel your soul has been destroyed,” Lachlan thought. “For what? One day you might run the company?”
Lachlan has a child now, a 10-month-old son, another factor that seemed to urge independence upon him. He’d always felt loyalty and love going up, to his father, reason enough to stay in the company as long as he had. But now Lachlan imagined his infant son’s point of view, conflated, perhaps, with his own. “Are you your own man?” he imagined his son wondering. “Without a son you could say, ‘Well, do it for a couple more years, see where things go,’ ” Lachlan thought.
Of course, his Australian wife, Sarah, was also dying to return home. “Both of us now, all we think about is how we’re going to get back to Australia one day,” she said just a few months back.
Rupert was saddened by Lachlan’s decision to quit. It must have seemed, momentarily, a betrayal, his chosen successor simply walking off. Rupert, though, decided he couldn’t blame Lachlan. He too had bristled at a father’s influence—in college, to the dismay of his capitalist dad, Rupert was the campus leftist. Perhaps, too, there was some relief. Maybe Lachlan breathed down Rupert’s neck, too, a constant reminder that some day he would be replaced. Looking at Lachlan, he must have occasionally felt his will to conquer ineluctably thwarted.
And so Lachlan wanted to do his own thing and told his dad he wanted to do it in Australia. Wasn’t that, Rupert decided, really, just like a Murdoch? Anyhow, Lachlan seemed determined. And willfulness in his children always made Rupert crow with delight. “Once Lachlan makes up his mind … ,” Rupert told a friend.
At lunch, Lachlan made Rupert a promise. “We’ll have a better relationship,” he told his dad, which seemed to hearten Rupert.
To Rupert’s surprise, and to Lachlan’s, their relationship did improve. Almost immediately. It really did seem a kind of catharsis. Suddenly, they talked excitedly about Lachlan’s plans. “My relationship with my dad is better than ever,” Lachlan told colleagues.
Rupert agreed. “We do have a better relationship,” he told a friend. Two weekends ago, Lachlan swung by Rupert’s ranch in Carmel, California, to laze by the pool with his little sisters and play tennis with his vigorous dad.
“I think it came as a fantastic surprise to both of them that in removing the business context from their relationship, they re-found the father-son relationship,” says a family friend.
Lachlan remains on the board of directors, which gave him a nice going-away present: $8 million severance. No one would take over his job, always a concocted one. Instead, his responsibilities were divvied up and reassigned. Rupert stepped in as publisher of the Post he and Lachlan loved—who else wanted the job? The real plum was the 35 stations that generate 10 percent of the company’s revenues and 30 percent of its profits. The competition seemed to be between Ailes, from Fox News, and the entertainment side, the element of the company Lachlan identified with Chernin. As a parting gesture, Lachlan lobbied his father on Ailes’s behalf. “Ailes will do a great job,” Lachlan confided to one exec. “I pushed my dad.” Ailes got the stations, a decision that Chernin has said he endorses.
For Lachlan, the emotions over leaving, so big for a time, soon seemed to settle. He had a long teary afternoon at Da Silvano with Col Allan and other Post colleagues—even a board member flew in. At the end of August, he was packing up the rented Tribeca duplex on Laight Street. Sarah was already in Sydney, being treated like a homecoming queen by the papers. Lachlan was also selling the huge place in Soho.
People counseled Lachlan to take some time off, weigh his options. His dad had never taken a day off in his life. He figured he couldn’t either. He registered a company name, Illyria. It would be a media company, though he wasn’t revealing the details yet.
Lachlan seemed at ease. He even felt that his dad was secretly proud that he’d walked. “Proud that you are doing your own thing,” Lachlan thought, “and you got the balls to do it, the guts to leave, the courage to leave.” For Lachlan, that was a nice moment, his dad thinking about his courage.
Also, Rupert said he wanted Lachlan back in four or five years, fit and ready.
“Maybe,” Lachlan told him, but he thought, “Ideally, I’ll be having so much fun building my own business, doing my own thing … If I come back, I want to come back on my own terms. I don’t want to be in the same position I was in before.”
Of course, Rupert, being Rupert, wasn’t overly sentimental about keeping Lachlan’s seat warm. If Lachlan returns, will he get the top job?
“Well, maybe,” Rupert mused to a friend, “but his brother, James, is going to be putting in a pretty strong bid. His brother’s doing brilliantly … even Elisabeth would like to come back to the company one day, I think.”
Will Doig assisted in this article.