© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Leonardo Del Vecchio and Rupert Murdoch have plenty in common. The chairman of Luxottica, the eyewear group, and the chairman of News Corp and 21st Century Fox were born in the 1930s. Both are billionaire patriarchs of family businesses they largely built themselves but now share with outside investors. Both have six children from different relationships, and both have wrestled with the question of succession.
My first reaction to the latest news of changes at the top of the Murdoch empire was: did the shrink get involved?
Succession planning at family businesses is often full of unlikely twists and shrieking. After the phone-hacking scandal broke over Rupert Murdoch’s UK newspapers in 2011, Vanity Fair claimed that the Murdoch siblings had discussed succession with a “family counsellor”, partly in an attempt to smooth the process. Read more
I firmly believe boards need to be less squeamish about prying into their senior executives’ private lives, particularly when divorce is looming, because the corporate consequences can be grave. Now researchers at Stanford’s Graduate School of Business have broadened the debate to suggest that shareholders should worry about chief executives’ marital disharmony, too.
Divorce, they write, could undermine CEOs’ control and influence, affect their “productivity, concentration and energy levels”, and have an impact on their attitude to risk. They cite Rupert Murdoch’s split from Wendi Deng and the divorce of Harold Hamm, CEO of Continental Resources, from his wife. News of the first, thanks to a pre-nuptial agreement, left News Corp shares unmoved; news of the second, with no pre-nup, knocked 2.9 per cent off Continental Resources’ stock price as investors worried about the fate of Mr Hamm’s 68 per cent stake in the group. Read more
So the revelation in FT Weekend’s interview with David Cornwell, better known as John Le Carré, that Mr Murdoch once lunched with the master espionage novelist is a delicious one. Mr Le Carré is no fan of the media mogul, telling one interviewer in 2010 (even before the phone hacking scandal engulfed News Corp) that his empire was guilty of “pretty horrendous manipulation of the media” and “enormous intrusions into our domestic affairs”.
But some years ago, he relates in the FT interview, he met the proprietor of The Times, after taking offence at one of the newspaper’s stories about him. Read more
The return of the “soap opera” with a digital twist – thanks to multi-million pound deals struck by Unilever with Viacom and News Corp – is a further indication that there really is nothing new in marketing.
As I wrote recently, in relation to the spat between BrewDog, a Scottish independent brewer, and the beverage giant Diageo, the tools of communication and promotion may change, but the underlying challenges and responses are the same as they ever were. Read more
It will be a shame if bitter and partisan debate over whether Rupert Murdoch is “a fit person to exercise the stewardship of a major international company” obscures the more important conclusion of the UK parliament’s culture, media and sport committee on phone-hacking: that he and his son James were wilfully blind to what was going on.
Whether BSkyB, controlled by the Murdoch-owned News Corp, is a “fit and proper” owner of a broadcasting licence is a question for Ofcom, the regulator, which has now entered an “evidence-gathering” phase of its probe.
But as even the dissenting members of the committee said on Tuesday, if the “fit person” line had been omitted from the report, they would have voted unanimously to back it, including the charge that the Murdochs oversaw a culture of wilful blindness. Read more
Warren Buffett’s early stage prostate cancer is so commonplace and treatable that you might legitimately ask whether it was worth declaring. But there is no question that it was better for Berkshire Hathaway’s chairman to make his statement than to conceal the condition.
While there are good reasons to respect the privacy of patients, Apple’s failure to detail Steve Jobs’ condition during his leave of absence for health reasons in 2009 spread unnecessary uncertainty about the future of the company and its succession planning.
If Mr Buffett had any doubts about whether to make his statement, he could have asked a fellow senior citizen: Rupert Murdoch. Read more
By Ben Fenton
In an extended Vanity Fair piece that people who know the Murdoch family say is “horrifying in its level of detail” and “strikingly accurate in most respects”, Sarah Ellison has laid out how the phone hacking scandal at one of News Corp’s UK newspapers derailed dynastic plans for the media group.
One element of a long history – the claim that the four eldest Murdoch siblings had discussed the “succession” to their father as chairman and CEO with a “family counsellor” or psychologist – stood out, both for being hard to picture and for what it says about how little other shareholders views appear to enter into the Murdoch family considerations on succession planning. (Rupert Murdoch and the elder four of his six children control 38 per cent of voting shares, but own only 12 per cent of the total equity). Read more
A deal between McGraw-Hill and CME Group to bring together the Dow Jones Industrial Average and the S&P 500 index would be a good moment to consider the irrelevance of the former and the significance of the latter.
What does the Dow have going for it? It’s arguably the highest profile stock market benchmark in the world – granted a daily airing by media worldwide. Its composition is stable (the last change was more than two years ago, when Travelers replaced Citigroup, and Cisco replaced General Motors). Its 30 component stocks are highly liquid, which makes the average quick to calculate. It is old. Very old: it was conjured up by Charles Dow in 1896, with a basket of railroads, steel companies and textile mills. Read more
At July’s parliamentary hearings into phone-hacking at the News of the World, Liberal Democrat MP Adrian Sanders wound up his line of questioning by asking James Murdoch if he was “familiar with the term ‘wilful blindness’”.
Mr Murdoch, now deputy chief operating officer at News Corp and head of its international business, asked Mr Sanders to elaborate, which he did:
It is a term that came up in the Enron scandal. Wilful blindness is a legal term. It states that if there is knowledge that you could have had and should have had, but chose not to have, you are still responsible.
Plenty of critics will say that Rupert Murdoch’s full-page apology for the “serious wrongdoing” caused by the News of the World in the British phone-hacking scandal comes too late. Likewise, the resignation on Friday of former editor Rebekah Brooks as chief executive of News International, News Corp’s UK subsidiary, looks tardy.
But News Corp should be more concerned about whether the 6m readers of the UK papers where Mr Murdoch’s letter will appear can trust the sender, given the winding route he took before delivering it. Read more
“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat” (Sun Tzu)
News Corporation’s withdrawal of its bid for British Sky Broadcasting is the latest in a series of increasingly desperate tactical moves by Rupert Murdoch and his chieftains to limit the consequences of the UK phone-hacking scandal. Read more
The News International scandal, which today led Jeremy Hunt, the culture secretary, to refer Rupert Murdoch’s bid to acquire complete control of British Sky Broadcasting, throws the entire shape of his UK operations into doubt.
Might the ultimate effect be that News Corporation disposes of its troublesome UK print operations to focus on its far bigger and more profitable entertainment assets in the US and elsewhere in the world?
That possibility, raised by Andrew Hill last week, would have seemed implausible even a week ago. Rupert Murdoch is an inky-fingered newspaperman who loves papers of every stripe and infuriated investors by paying $5bn for Dow Jones four years ago. Events are, however, moving very fast. Read more
When advertisers put pressure on news organisations, it’s often a sign press freedom is threatened. From South Africa to Hong Kong, public opinion puts companies or governments that use their commercial clout to protest against editorial policy on the side of the bad guys.
It’s symptomatic of the sorry state of UK news media that in the widening scandal over phone-hacking, the reverse is true. Read more