Is Rupert Murdoch Giving His Son the Keys to His Media Empire?
Turns out the market isn’t so sure that Lachlan Murdoch, Rupert Murdoch’s son, is the right man for the job. Shares of News Corp. (NASDAQ:NWS)(NASDAQ:NWSA) closed Wednesday’s regular trading session down after the multinational media company — one half of the former News Corp., which was split into News Corp. 2.0 and 21st Century Fox (NASDAQ:FOX)(NADAQ:FOXA) — announced that Lachlan has been named non-executive co-chair. The move has led to speculation that Lachlan is in line to inherit the company once the elder Murdoch steps down.
The elder Murdoch, who is currently executive chair, had this praise: “This appointment is a sign of confidence in the growth potential of News Corp and a recognition of Lachlan’s entrepreneurial leadership and passion for news, digital media, and sport. In this elevated role, Lachlan will help us lead News Corp forward as we expand our reach and invest in new technologies and markets around the world.”
At the time of his appointment to non-executive co-chair, Lachlan served as a director at both News Corp. and 21st Century Fox as executive chair of NOVA Entertainment Group, a company that operates commercial radio networks in Australia, and as executive chair of Illyria Pty Ltd., which owns NOVA Entertainment.
Illyria was founded in 2005 in the wake of some drama at News Corp. (which had not been split up at the time.) That year, Lachlan quit his job at News Corp. after clashing with executives. A few years later, the phone hacking scandal created enough friction with shareholders that it became unclear if Murdoch would be able to pass the company down through the family.
By separating the company formerly known as News Corp into two public entities, one comprising its publishing assets and the other its Fox cable network and 20th Century Fox film studio, investors hoped the firms would become more profitable. News Corp, the publishing branch, would be able to devote resources toward engineering a turnaround with the eventual aim of dominating the smartphone market for news, entertainment, and information, while 21st Century Fox would focus on creating a national sports network.
Shares of News Corp began trading separately from the 21st Century Fox entertainment operation on July 1, with investors having a tepid reception to the slower-growing publishing business, which includes The Wall Street Journal newspaper and the HarperCollins publishing house. Over the past six-month periods, shares of Fox are down 4 percent and shares of News Corp. are up about 1 percent.