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Published 14 June 2013 10:31, Updated 17 June 2013 08:11
At home with the Murdochs: (from l to r) Elisabeth, Rupert, Lachlan, James and Rupert’s former wife Anna in 1977.
The global media has gone crazy with stories about the impending divorce of Rupert Murdoch and Wendi Deng , with speculation about the details of their pre-nuptial agreement and suggestions that the “real” reason for the divorce is “jaw dropping”.
My jaw, naturally, remains ready to descend at a moments notice.
Am also told that undisclosed reasons for Murdoch divorcing Deng are jaw-dropping - & hate myself for wanting to know what they are— Robert Peston (@Peston) June 13, 2013
But the headline that really grabbed my attention was this one on a story from Associated Press: “Rupert Murdoch files for divorce from Wendi Deng; succession plans unchanged”.
Succession plans unchanged? That’s true, but not because of anything to do with the divorce.
Quite simply, Murdoch’s succession plans have not changed because he doesn’t have any.
We still have no idea who might take over from Rupert when the 82-year-old eventually steps down.
The splitting of News Corp’s publishing assets (to be spun off into a new entity, also called News Corporation) and its entertainment assets (to be spun off into a company called 21st Century Fox) looked like it could answer some succession questions, with Rupert originally supposed to run the entertainment business and Wall Street Journal chief Robert Thomson to run the publishing group.
But, not surprisingly, Rupert has emerged as executive chairman of both companies – firmly in control.
And while he has stated that he would like to pass control of the businesses to his children, exactly who would take up the mantle is a mystery.
Certainly Grace and Chloe, Rupert’s children with Wendi Deng, remain far too young to have any impact on the succession discussion; together they hold 8.73 million class A shares in News Corporation, worth $US270 million, but these are non-voting shares held in a trust.
To find a successor among Rupert’s adult children – Prudence, Elisabeth, Lachlan and James – is equally difficult.
Lachlan and James are on the News Corp board, but Lachlan recently ruled out a return to an executive role at News Corp and James’s reputation is still recovering from his proximity to the British phone hacking scandals; he and his father denied to the Leveson inquiry any knowledge of the actions of reporters and editors at the News of the World, but repeatedly apologised for News Corp’s involvement.
Elisabeth, a successful entertainment executive in her own right through her company Shine (which News Corp now owns), has resisted taking any leadership position at News Corp or joining the board.
Prudence has no involvement at News Corp.
Most commentators suggest that Rupert’s divorce will have little impact on News Corp, due to the couple’s pre-nuptial agreement. The only caveat on that is if the agreement entitles Deng to a parcel of shares in the business, but we’ll have to wait and see.
Similarly, the divorce won’t interrupt the News Corp split or Rupert’s ascension to the top of not one but two media giants.
And at least for now, you can forget about any interruption to the grand succession plan. You can’t change something that doesn’t exist.