The media mogul hit a rough patch. But he’ll look to strengthen the News Corp empire in the new year and likely thrive
Rupert Murdoch has confounded his biographers, helped cause the breakdown of his second and third marriages, and aggravated his children to no end by his refusal to begin the natural process of retirement and retreat from center stage.
The soon-to-be-83-year-old Murdoch has said he believes he’s got a solid 15 years left in him as he tries to remake News Corp, the company that now holds his newspapers, into a parallel empire with 21st Century Fox, the entertainment company he controls, and as he emerges from the hacking scandal in Britain.
Here are 10 predictions for the major moves I think he’ll make in 2014:
1) Sell the Times and Sunday Times in London
It is not just that the Times papers, particularly the daily paper, continue to be one of the big losers among his newspapers, but he’s turned a cold shoulder to Britain. He’ll keep the Sun, the UK’s tabloid leader, because it makes money – and wields power – and it is the sentimental bedrock of his newspaper legacy, but he’ll be happy to see the Times and Sunday Times go. Even happier if he gets a big price. Who will pay dearly for these money losers? My bet? The media and London-hungry Emir of Qatar and his associated business enterprises.
2) Make a big US acquisition
News Corp walked away from Fox with a multi-billion-dollar cash cushion. But money in the bank makes Murdoch itchy. He prefers empire building to liquidity. For the past few months, he’s been kicking the tires of the Tribune Company assets, particularly the LA Times and the Chicago Tribune itself, looking to buy low and wisely to fill out his new retro-print empire. But Murdoch is always inclined to buy the best brand that he can. Shortly after the New Year, Time Inc will be rolled out of Time Warner, saddled in debt. I believe Rupert is licking his lips.
3) Get married again
His marriage to Wendi Deng ended this summer – not least of all because she, at 44, was trying to come into her own, and expecting him, in what she increasingly saw as his dotage, to cede her position and authority. Murdoch is not a sharing man, but neither is he, by nature, a single man. Alone, he’s rather helpless. Also, he likes to send messages. His message with a new marriage will be that he’s starting over. It’s a new era. And the past is the past – not to be considered again.
4) Settle with the Justice Department
For more than two years now, he’s been dogged by what he believes to be a vengeful Obama Justice Department, using – inappropriately, he believes –the Federal Corrupt Practices Act to threaten him and his company because his reporters in London paid the police for information. Steam comes out of his ears at the suggestion that this could be characterized as a bribe to public officials, which US law prohibits. Expensive though it will be, he’s going to pay, and pay dearly, to have the problem go away. Hacking is so yesterday.
5) Dispatch the New York Post
However sentimental he may be, the New York Post’s losses – conservatively at $60m a year, and, with advertising and circulation continuing to fall, potentially over $100m a year – are now significantly more painful within the much smaller new News Corp. What’s more, even Murdoch believes the Post has lost its mojo, blaming himself for his lack of attention to the paper, now directed at the Wall Street Journal. And too, he needs the office space in News Corp’s headquarters on sixth avenue in Manhattan, where both the Post and the Wall Street Journal sit. He’ll try to hook the Post up with the Daily News or with Newsday on Long Island to get it off the News Corp balance sheet. Failing that, he’ll shutter it.
6) Sell Harper Collins
Everything he’s doing is now about making News Corp a stronger and more strategic business. The current News Corp is too small to carry the low and declining returns of the book business. The direction of the book business is clear, either double down or leave. Murdoch has never liked the book business anyway. It’s time to get out of it.
7) Fire his son, James
Or, more accurately, let his son, James, be fired. James, who lead News Corp’s business in the UK as the hacking scandal unfolded, is hacking, no way around it. He’s tarred. Murdoch, unable to say no to James or any of his children, has adroitly left his youngest son with the new Fox company, where he awkwardly tries to pretend he has power and responsibility. It’s an issue that Fox head Chase Carey will have to deal with, if only to protect his own credibility and keep himself from looking foolish. James will soon read the writing on the wall and depart for new projects.
8) Begin the process of firing Chase Carey
The penalty for taking on a Murdoch, as News Corp’s last COO, Peter Chernin, learned after making life difficult for Lachlan Murdoch, is that you yourself eventually pay the price. With James out at Fox, Murdoch will move his daughter, Elisabeth, who runs Shine, the major independent television production company she built and which she sold to Fox (then News Corp) in 2011, into a rising position as an obvious heir apparent.
9) Hire his son, Lachlan
Lachlan, in a huff, left his father’s employ in 2005, when Murdoch’s executives ganged up on him and he failed to win his father’s immediate support. Murdoch has been trying to get him back ever since. The new News Corp is the bait. And while it has a CEO, Robert Thomson (former editor of the Wall Street Journal) it also, clear to all, has a prince. Lachlan will take the title of co-chairman with his father.
10) Push News Corp’s shares through the roof
Tactically, News Corp’s shares were underpriced when the company was rolled out in June, increasing by more than 25% since then. The pure asset value of News Corp may be still as much as 50% greater. So at least another 25% in 2014, making the family significantly richer (ironically, the rollout of News Corp not only created $10bn in new value, it made Fox shares go up, too) and once again confirming the brilliance of Murdoch’s long game.
After a bad patch, 2014 is going to be a good year for Rupert Murdoch.
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