The Journal. - Media Giant Rupert Murdoch Is Stepping Down

Episode Date: September 21, 2023

Rupert Murdoch, 92, announced he's stepping down as chairman of Fox and News Corp, the two companies that have made him a force in global media. WSJ's Amol Sharma discusses how Murdoch became a media tycoon and what comes next for his empire. Further Reading: -Rupert Murdoch to Step Down as Chair of Fox and News Corp After Seven-Decade Career  Further Listening: -Behind the Breakup of Fox and Tucker Carlson  -Dominion Voting Systems vs. Fox News  Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, a media giant announced that he's stepping down. Breaking news right now, Rupert Murdoch has now announced he is stepping down as the chairman of Fox Corporation and Fox News. Bringing an end to a seven decade long career, Murdoch, who is now 92 years old, will now be appointed chairman emeritus of both companies. He will officially make the transition in November, and his son will become the sole chairman of both companies. Big picture. Who is Rupert Murdoch? So Rupert Murdoch is one of the most influential, powerful, and controversial media barons of the modern era. That's our colleague Amol Sharma. He's somebody who shaped much of the entertainment business that we see now,

the cable news business that we see now, the news publishing business that we see now, over decades of building up brands that are now iconic and acquiring them and adding them into his empire. So he's had a real impact on business, on culture, on politics. How significant is this change in leadership? Well, in a sense, what it does is it solidifies his son as sort of his successor. And of course, you know, it's a big deal that Rupert, who for decades has towered over the media scene and had such an imprint on the business, on politics,

on shaping cable news and the print news industry, is going to be moving to this other role of chairman emeritus. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Thursday, September 21st. Coming up on the show, one of the world's biggest media tycoons steps away from his empire. your supervision with live trip tracking and highly rated drivers. Add your teen to your Uber account today. Rupert Murdoch's media empire is worth tens of billions of dollars. It includes Fox and News Corp, which is the owner of the Wall Street Journal. Amal, what is Rupert Murdoch like?

He's always fashioned himself, I think, as sort of an outsider to the establishment. And whether that's the mainstream press or the incumbent companies in television or cable or whatnot, he's always seen himself as what he once called it, being the skunk at the party. And what is his background? Rupert was born in Australia and grew up there. He went to college in Oxford, where he was sort of first exposed to the UK. And the big moment for him came when he was about 22. His father, who was running a small newspaper business in Australia, he died of a heart attack.

Rupert shortly thereafter came back and took over the empire. It was a pretty, it wasn't an empire then, it was a small family business. And that became his job and his life. Over the years, Murdoch expanded from one city newspaper in Australia to others across the country, and eventually to the UK and the US. What was the moment that Rupert Murdoch really became a mogul? Probably when he acquired the Times of London and had gone beyond the tabloid world in London into that business. Maybe that was a key moment, but also when he expanded into the U.S. And so he was sort of, once he was in the U.S., he then had media businesses on three continents. He was in Australia, he was in the U.K., and then in the U.S. he had the New

York Post, and later, of course, Fox. Those were all key moments in him becoming a quote-unquote mogul. And also just the sheer size of the conglomerate he was building, it became one of the biggest media companies in the world, and that alone put him in that status. Rupert Murdoch also founded the Fox Broadcast Network, which is home to TV franchises like The Simpsons and NFL Football. He later launched Fox News, which reshaped cable news in the U.S. So can you tell us about how Fox News took shape and what Rupert Murdoch's role in that was?

So Rupert looked at the burgeoning cable TV business in the 1990s and saw an opportunity. At the time, there was right-wing talk radio that was having some success, but there wasn't really a cable television news channel that appealed to right-leaning viewers. And I think he saw a market opportunity there. It was a risk. Building a new cable channel, all the investment that went into it, trying to make sure it would get carried by all the big distributors and get in front of real people,

that was risky, and he thought it was something worth trying. And Ted Turner, who was the founder of CNN, famously said, I think he said, squash Rupert like a bug. I mean, it was this famous moment. And that didn't happen.

I mean, Fox, it caught fire with viewers. And it wasn't, within a few years, it was the number one cable news channel. So it proved to be one of his best bets financially. There's been a lot of controversy about that channel. But it was one of his better financial bets over his career. And how influential is he in the global media landscape? You know, incredibly. I think over the years, his critics would say he's too influential over public affairs or politics or the media writ large. And his supporters would say that's part of his appeal and part of his power

as a media businessman and that he's got his pulse on what the audience is looking for. You'll always see him talking about trying to serve regular people and not elitists. You started alluding to this, but what challenges has the Murdoch media empire faced over the last few years? I mean, there have been empire faced over the last few years? I mean, there have been setbacks over the years. Periodically, there have been big issues for the Murdoch empire to deal with and for Rupert to deal with. Early on in the 90s, there was a pretty big debt crisis.

The company was really in trouble. They got through that. But I think perhaps the biggest challenge has been just recently the defamation lawsuit against Fox News by Dominion Voting Systems, which came out of the fallout of the 2020 presidential election. Dominion Voting Systems is suing Fox News

for $1.6 billion over the new agency's claims it rigged the 2020 election. The defamation lawsuit accuses Fox News of fabricating the story in an attempt to boost ratings. And it was a really bruising affair for the company. It was by the time Fox settled it for $787-plus million, there had been a lot of embarrassing disclosures for the company and internal communications that came out in the court proceedings. And so it really was, I think, one of the tougher moments for the company.

So the big question today is, why now? Why is Rupert Murdoch stepping down now? today is why now? Why is Rupert Murdoch stepping down now? We don't have a lot of information yet about the precise timing. Obviously, he's 92 years old. He's had a long career. And so I think folks that we've talked to so far, I wouldn't say are surprised at the outcome here because, you know, it sort of makes sense to have a transition in place as Rupert gets older. But I think the precise timing, you know, why this exact moment, we just don't know. One thing we do know is who will be taking the reins. That's next. We'll see you next time. Very flavorful. Yodeling with them. Ew. Ew. Ew. Ew. Ew. Ew. Ew. Ew.

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The Murdoch family has a roughly 40% voting stake in Fox and News Corp. And now, Rupert Murdoch has tapped his eldest son Lachlan to lead both companies. Can you tell us about Lachlan? Yeah, so Lachlan has had roles on and off in the company over the years. And there was a period where he wasn't,'t you know really looking like he was moving up the ranks or wanted to necessarily in the company and then in around 2015 things changed in a big way and he took on a big role in sort of a power sharing setup that rupert had created with his two sons lachlan and james and so they each got pretty big posts under Rupert then, and that was

the beginning of his ascent into the upper ranks. In 2015, Murdoch appointed his younger son James CEO of Fox and Lachlan co-executive chairman. Then in 2019, Fox sold entertainment assets to Disney in a blockbuster deal. The newly formed Fox Corp named Lachlan CEO, and James later left the company. As CEO, Lachlan's challenge was to find an identity for Fox in a media landscape where rivals were much bigger and streaming was on the rise. Their challenge is much more about streaming and figuring out how to transition their old businesses into the streaming world. He's had to figure out how to place their bets and have an identity. He's focused a lot on sports, tried to make it basically a sports and news company. And basically, he has had a gradual ascent since 2015 and now is firmly at the top.

gradual ascent since 2015 and now is firmly at the top. So Lachlan wasn't always Rupert Murdoch's first pick as his successor? You know, it was always unclear what Rupert planned, and I'm not sure there was ever a pick per se. There were people who worked in the company over the years who had their theories about who might be up or down, but really, it was never really spelled out. Even with Lachlan in charge, Amal says the companies should still look the same, at least for now. I mean, look, the empire doesn't change with this announcement. The companies are structured the exact same way. But I do think having a new change here is going to raise questions like, is this company in retrenchment mode and trying to look to break things off and wind things down?

Or will Lachlan be acquisitive and want to expand? You know, they've talked about they have the opportunity to be on the offense and grow the company if they want to. And so those are the things that we'll look for. It depends on the opportunities in the market, too. But I think that's probably a big question. And Loughlin is stepping into some big shoes. What are the challenges he's facing going forward? Well, there's different challenges in different parts of the empire.

And I think a big challenge is just charting a future in news that's going to be one that's centered around digital growth, but that is sustainable and you don't need to rely on anyone else. And that's a really hard problem to solve. No one's really solved it. The journal's in a strong position, but that will be a big issue for him. And on the other side, on cable TV news, Fox News is hugely profitable. It's still number one in the ratings. But like all of the rival channels in cable news, the median age is pretty high and people are cutting the cord. And they know that this is not a forever business here, that it's not going to be this big and this profitable forever. So trying to plot a future, plot a transition, find those younger people on the digital platforms of

the future. That's Lachlan's job. And I think that's going to be his continuing challenge, how to make the legacy to streaming transition and the legacy to digital transition generally. Yeah. And as you say, it's a familiar challenge that we don't really know the solution to yet. Yeah. Unfortunately, we'd all love to know exactly what we're supposed to do. What are you going to be watching for? I'm going to be watching for what Lachlan says he wants to do

and whether or not he wants to embark on any new strategies for the companies, place any new bets, try to look for acquisitions, take it in any different direction. Does this move come with a strategic shift of any kind or is it a continuation and just sort of a gradual slow motion succession process? So that's kind of what I'm paying attention to the most.

And it has his thinking about the HBO show Succession. Is today's news like an alternate ending to that show? Well, I think there are some big differences. First of all, nothing changed about the ownership of the company today. So far as we know, Rupert Murdoch continues to be the person in charge of the Murdoch family's voting stake in these companies. He's still the person who's in control of the situation. And so I do think that it's important to remember,

despite this announcement, he's not gone anywhere. He's still pretty powerful in this whole equation. That's all for today, Thursday, September 21st. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting by Joe Flint. Thanks for listening. See you tomorrow.