When the son comes up: the Murdoch succession battle

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1:06Giorgio Armani:The Economist

1:14Rupert Murdoch:Hello and welcome to The Intelligence from The Economist. I'm Rosie Bloor.

1:18Giorgio Armani:And I'm Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world.

1:28Rupert Murdoch:A terrifying new epidemic is sweeping the streets of Sierra Leone and other countries in West Africa. Kush, a synthetic drug, is both extremely dangerous and extremely cheap.

1:42Giorgio Armani:And you know why the Carabinieri, Italy's national police force, look so sharply dressed? Because their uniforms were designed by Giorgio Armani. Our obituaries editor looks back on the life and career of a man with an unmatched eye for detail.

2:05Giorgio Armani:First up, though.

2:13Rupert Murdoch:It doesn't even make any sense! I'm the eldest boy!

2:19Lachlan Murdoch:I am the eldest boy!

2:22Giorgio Armani:It really is a story that could have come out of the HBO show Succession. Actually, other way around. Succession was kinda obviously based on this same drama. The Murdoch family and control of its media empire. Now, maybe the longest job interview in history has ended. Lachlan Murdoch, he's the eldest boy, will have control of Fox Corporation and News Corp when his 94-year-old father, Rupert, dies. So what can the world expect from media's newest mogul? Lachlan Murdoch has been preparing for this moment for his whole lifetime. Tom Wainwright is The Economist's media editor. He's now in charge of two media companies with a combined value of more than$40 billion, and arguably an influence that's even more powerful than that with brands like Fox News, the New York Post, and the Wall Street Journal.

3:17Giorgio Armani:So this deal makes Lachlan one of the world's most powerful people for decades to come. and let's go back this is as you say a sort of lifelong ambition story for him how did he find his way into into contention well he's been involved in the family firm since he was a teenager i mean he took a gap year and during that gap year he spent some time working at the printing presses in sydney so he's been at this for a long long time after he finished university he went to work for the family newspapers in australia and after that he moved back to work for Fox in New York. And it's been a bit of a bumpy ride.

3:51Giorgio Armani:He quit from Fox after falling out with the leadership there and moved back to Australia. After that, a lot of people thought that his younger brother, James Murdoch, was the more likely successor. But 10 years later, Lachlan returned to the fold and pretty quickly re-established himself as the favourite. James, meanwhile, left the company, apparently unhappy with the political direction that it was taking. And Lachlan really zoomed into pole position once again. But this has been, let's call it acrimonious, right? This required a deal to get it through. What is the nature of the deal? Well, Lachlan's been in charge now for a while.

4:23Giorgio Armani:Rupert Murdoch stepped down officially in 2023 and Lachlan was named the chief executive of Fox and the chairman of News Corp. But people were a little uneasy, or he was anyway, because the threat remained that his siblings, younger brother James and two older sisters, could use their votes that they get with their shares in the family trust to outvote Lachlan after the eventual death of their father. And what has happened now, it seems, it's a complex deal, but the upshot is that the three rebel siblings, if you like, have supposedly given up their votes in exchange for a payment of what's reported to be about a billion dollars each.

4:58Giorgio Armani:And this gives Lachlan a controlling stake in both companies, which lasts until at least 2050. What's your take on that from their perspective, just to take around about a billion reportedly and then simply go away. It's a little surprising. These are people who are already not short of money and they've had this very public acrimonious fight over the future direction of the company. So I was a bit surprised when they seemed to give it up in exchange for some more cash. It remains to be seen what happens next and what they do with this, but perhaps they just felt that that was the way things were going and decided that they'd had enough.

5:37Giorgio Armani:Either way, they haven't done too badly out of it, it's fair to say. Clearly. But as for Lachlan himself, I guess the question is how much he's going to be like his dad, an absolute force in media for absolutely decades. Are they of a similar temperament? Well, he's going to be a tough act to follow, isn't he? I think they're similar in some ways, but he seems to be somewhat less frugal than his dad. There's a story from when Rupert Murdoch was first in Hollywood in the 1980s. A lot of executives there were amused that this guy walks around in shirts from Walmart and sometimes used to walk to work at the Fox lot, which was a four mile walk from his home.

6:11Giorgio Armani:Lachlan, meanwhile, is maybe has slightly different tastes. He recently bought himself one of the most expensive homes in Los Angeles, a 10 acre mansion in Bel Air. The more important stuff is the political outlook though. And here, I think it seems that he shares his dad's political flexibility. The Murdochs are often characterized as being right wing, understandably but I think they're more than anything they're pragmatic and if you look at the history of Rupert Murdoch's political allegiances in the UK for example his newspapers switched their support from the Conservatives to the Labour Party in 1997 just as it became clear that Labour were about to win and similarly Rupert Murdoch initially despised Donald Trump but got behind him after it became clear that he had momentum and it seems as if Lachlan may be similarly pragmatic.

6:58Giorgio Armani:There's a story in a book by Michael Wolfe that in 2016, in his home, he had Lurol printed with Donald Trump's face on it. And yet now he clearly sees that Trump is good for business. So I suspect he may be ideologically pragmatic and somewhat flexible in the same way as his dad. But will he have the same shrewd, maybe even ruthless business sense though, that got the company so far? Well, Rupert Murdoch was probably one of a kind. And when it comes to Lachlan Murdoch, I think you're going to hear the word Nepo Baby a lot. I think it's fair to ask whether this guy would be in charge of a$40 billion company if he had a different surname.

7:34Giorgio Armani:But to give him some credit, he's made some good calls over the years. I think one of the clearest ones was his enthusiasm for an investment that News Corp made a long time ago in a company called REA Group. And this is actually one that has nothing to do with media. It's a property listings website like Zillow or Rightmove. But they made a big investment in it back in 2001 when it was worth almost nothing and it's now worth more than 20 billion dollars so that was one of the great deals of recent years and Lachlan really was the brains behind that he's also contributed quite a lot in terms of digital experiments and this is something where Rupert Murdoch hasn't shown maybe as much flair as others fair enough for somebody who's now 94 and comes very much from the analog era Lachlan meanwhile has pushed into this and in 2020 Fox bought a streaming company called Tubi which is an ad-supported free streaming service.

8:24Giorgio Armani:People didn't think very much of it at the time, but since then it's actually overtaken some of its rivals and seems to be doing pretty well. Fox has just the other month launched a new streaming service as well called Fox One. So I think we're going to see more digital experiments there. And to Lachlan's credit, it's an area where so far he seems to have made some good calls. And so that's the path you see for the Murdoch companies then, is a fairly steady hand, maybe a little on the spendy side, maybe a little more digital, but business as usual. I think so. I mean, certainly politically speaking, I think this spells continuity rather than change.

8:56Giorgio Armani:There was a time when people were wondering whether James and Elizabeth and Prudence, the other siblings, might use their votes to stage a kind of revolution and turn Fox News into MSNBC or something like that. And that is now not going to happen. I think we're going to see more continuity than change, certainly. but the fact that this feud now has been settled and there's now a bit more stability means that it could be time for the companies to make some bigger moves one that people have speculated about is whether or not the two companies fox and news corp could be combined it's something that rupert murdoch tried to do a few years ago and shareholders didn't like the idea some people wonder if lachlan might now give it another go there's also the possibility that fox could bulk up a bit it's an interesting time in hollywood there's a lot of consolidation in the air a lot of smaller streamers are struggling to get the kind of scale that they need to make sustainable profits.

9:46Giorgio Armani:And so some people are wondering whether Fox could combine perhaps with another studio. Certainly it's something that people have been talking about. And so with that succession question answered, it could be time for the Murdoch empire really to get more into the deal-making business once again. Thanks very much for your time, Tom. Thank you.

10:22Rupert Murdoch:This podcast is sponsored by Made In Cookware. Made In partners with multi-generational artisans and some of the world's best chefs to create professional quality cookware, knives, and kitchen tools. Their products are trusted in Michelin-starred restaurants worldwide and designed to perform just as well in your kitchen. From five-ply stainless clad to carbon steel, every piece is built to last and made to actually make you a better cook. Discover award-winning cookware at MadeInCookware.com.

11:00Um,

11:02Lachlan Murdoch:tell me about the first time you discovered Kush. Um, something like three years back. Anyema is a 25-year-old woman from Sierra Leone and we found out later in this interview that she's struggling to battle an addiction with KUSH. Ora Ogambi is our Africa correspondent. She isn't the only one. The drug is sweeping the region's streets and campuses and in the process, it's destroying lives. But nobody no one for help me again. You know, she said I don't change, you know, they say I'm about me again.

11:42Rupert Murdoch:Nobody.

11:46Lachlan Murdoch:Ori, tell me how widespread drug use is in Sierra Leone. Well, it's quite hard to tell just how many people are battling with drugs and addiction, but everyone I met in Freetown knew at least one person who was battling addiction. One estimate by the Klingendale Institute reckons that Kush has killed thousands across West Africa. It's killing so many people that the mayor of Freetown has had to set up a dedicated burial team to pick up abandoned bodies in the streets. These mass burials and cremations have been going on since 2022. And it's clear that it's quite a widespread problem.

12:21Rupert Murdoch:And of course, lots of people suffer side effects from using Kush, even if they don't actually die from it, right?

12:28Lachlan Murdoch:Well, exactly. And I think that's what's becoming most obvious. It's people in the streets who are battling psychosis, delirium and also agitation. So people seem really angry and it sometimes prompts self-harm.

12:40Rupert Murdoch:After smoking a substance which we did not know the name, we started seeing his girlfriend on the screen.

12:47Lachlan Murdoch:I spoke to one doctor and he was describing some of the patients that he came across.

12:52Rupert Murdoch:I went to bring her out. The process had lacerations. and then of course that was the psychotic behaviour.

12:59Lachlan Murdoch:Lacerations on his arm?

13:01Rupert Murdoch:Very deep lacerations on his arm.

13:02Lachlan Murdoch:Apart from just the psychosis and the agitation, it comes with other health risks as well. So it suppresses your appetite. If you don't know where your next meal is coming from, that might be a welcome thing, but that also means that your malnourished body is going to struggle to fight off other diseases. So you have flesh-eating sores, for example, that your body is not healing properly from. Your limbs are swollen. You're at a higher risk of having STDs, which is compounded by the fact that lots of people who are battling kush addictions are selling sex to get more kush.

13:30Rupert Murdoch:All right, what exactly is kush?

13:32Lachlan Murdoch:So there's been lots of misconceptions about what it is. It's a mishmash of drugs. But we now know, thanks to some research from Global Initiative, that it's actually a combination of synthetic opioids and synthetic cannabinoids. So it's a super cheap, locally cooked up drug. When I say super cheap, I mean one dose is going for 40 American cents on the streets of Freetown. and it's really addictive and really potent even in the tiniest amounts. Now this testing by Global Initiative also showed that it contains nitazines. Nitazines is a class of synthetic opioids that is several times more powerful than fentanyl so just to give you a sense of how fatal that can be even in very small amounts and because the key psychoactive ingredients that are used to make this drug are really easy to import you can disguise them at the border as mechanical lubricants and flavour sprays then you can bring in the ingredients and cook them quite easily, which keeps the prices low on the streets and makes the drug really accessible to people who are young and poor in cities like Freetown.

14:30Lachlan Murdoch:So has it taken over from other drugs? Well, exactly. So when other drugs have become more expensive, drugs like Kush are able to stay quite cheap. And so that's driven demand for it. It's believed now to be more common than heroin and marijuana. And that's partly because of that supply chain I was talking about. Unlike marijuana, which relies on crops, or heroin, which relies on the opium poppy, You don't have to think about crops when you're cooking Kush. It also doesn't have a smell in the way that marijuana does. And because, again, you need it in such tiny amounts to get such powerful highs, it's easy to move and transport without getting in much trouble.

15:04Lachlan Murdoch:Sometimes it's mixed with other drugs, which makes the likelihood of having accidental and fatal overdoses much higher. And local cooks of Kush have actually been developing harder varieties of it that are even more potent than the ones that we've been seeing and testing up until this point. it's taken over lots of other drugs but unfortunately that comes with even more fatal consequences.

15:26Rupert Murdoch:And what's the government doing about it?