Home World Business James Murdoch ‘suggested’ as Disney CEO – is Fox the $50b dowry?

James Murdoch ‘suggested’ as Disney CEO – is Fox the $50b dowry?

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The Murdoch family’s media business has always been about family and business – and in that order, critics would say.

Which means we should not be to surprised that Rupert Murdoch’s negotiations to sell the 21st Century Fox movie and television production business to Disney includes a very Murdoch twist: the $US40 billion ($52 billion) sale could include a job for son James Murdoch at Disney. The top job, in fact. 

James Murdoch, chief executive of 21st Century Fox. James Murdoch, chief executive of 21st Century Fox. Photo: Bloomberg

Does that really mean Disney – whose CEO Robert Iger will step down in 2019 – is effectively negotiating a dowry with Murdoch that will put James in line for the top job?

Or is it just a red herring to distract us from the hard truth: Rupert wants to dump the only business that James is interested in running at Fox.

Rupert Murdoch with sons Lachlan (centre) and James. Rupert Murdoch with sons Lachlan (centre) and James. Photo: Peter Mathew

It is interesting that the non-Murdoch Financial Times floated the idea of James potentially claiming the crown at Disney just hours before the Murdoch-owned Wall Street Journal offered its take on why a deal made sense for the family. 

Are we really meant to believe that it was not Rupert who boldly suggested that James be Iger’s successor “in deal discussions” with Disney?

Helping to clinch a role for James at Disney – if the deal goes through – is the fact that a deal would involve a swap of Disney shares for the Fox assets, including its stake in Sky.

It means the Murdochs will have a seat in the Disney castle.

Will James Murdoch take the reins at Disney? Will James Murdoch take the reins at Disney? 

And a deal could be imminent, as Murdoch’s WSJ tells us.

It reports on a meeting of senior executives late last month where Rupert was asked the question: “If nothing were going to happen, when would that be?”

Murdoch: “December.”

The paper makes clear the discomfort James has felt with the triumvirate structure set up by Rupert.

“It’s crowded when you have three people making decisions,” one Fox insider told the Murdoch paper.

It also includes the idea that he could walk into Disney as the head of the Fox assets it is acquiring, and make a case to take Iger’s role.  

The idea of Rupert willingly selling such a massive part of the Fox business still astounds Murdoch watchers. It would mean surrendering assets built up over decades. And the departure of James would end Rupert’s dream of installing his two sons at the top of the media empire.

It appears that the failure of the Time Warner deal in 2014, and likely failure of Fox’s latest bid to acquire all of Sky, has forced the media mogul to face reality: Fox’s content and distribution business does not have the scale to compete against new rivals like of Netflix, Facebook, Google, and Comcast.

The WSJ says Lachlan has “come around to the notion of a sale”, which gives him cover for the statement made just weeks ago in relation to a Fox asset sale: “Let me be very clear. Fox has the required scale to continue to both execute on our growth strategy and deliver increased returns to shareholders.”

Rising son

It goes without saying that a deal would seal the succession planning at both Fox and News Corp with the Sun King’s preferred heir, Lachlan, positioned to take control of the two companies.

Talk is already turning to the idea of re-merging the two news-focused businesses somewhere down the track.

And while Rupert plays his latest round of Game of Thrones, the sons are forced to continue to play patsy for him. 

James had the unenviable task of facing a conference in Los Angeles as the latest Disney news was breaking.

“It would be wrong to comment on market speculation, on what’s out there in the press,” he said.

“There’s nothing to add to that, other than the nothing that we’ve said so far.”

What a pity the biggest story on his tenuous future came from a paper controlled by his dad and elder brother.

James has been inside the company tent since 1998 when News Corp acquired the hip-hop record label he founded, Rawkus.

Follow CBD on Twitter. Got a tip? ckruger@fairfaxmedia.com.au

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