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
Stephen Elop, ex-Nokia, soon-to-be ex-husband
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
I once rashly asked the chief executive of a large listed enterprise if he was overpaid. “I’ve taken no holiday and spent every weekend of the past 18 months trying to rescue this company, breaking up my marriage in the process,” he responded drily. “So, no, I don’t think I’m overpaid.”
With the Leveson report into the UK press published, the tectonic plates are shifting inside Rupert Murdoch’s empire, with a series of interlocking reshuffles underway. The outsider remains Elisabeth Murdoch.
The restructuring, in which Robert Thomson is to become chief executive of the new News Corp publishing company, with Gerard Baker succeeding him as editor-in-chief of the Wall Street Journal, is already causing ructions. Tom Mockridge has resigned as chief executive of News International, the UK publishing arm.
All this coincides with a lengthy profile in The New Yorker of Elisabeth Murdoch, Mr Murdoch’s daughter by his second marriage, who fell out with her brother James over the phone hacking affair. In Ken Auletta’s article, News Corp resembles Dombey and Son, the Charles Dickens novel. Read more
Mark Thompson – image by Getty
I don’t know Mark Thompson, outgoing director-general of the BBC, but I have my doubts about how well his long career at Britain’s public-service broadcaster – interrupted by just two years at commercial Channel 4 – will equip him to run the New York Times Co.
Critically, his new employer has to generate its own revenues, rather than simply pulling money in from a mandatory television licence fee and then spending it.
Management is management, whether in the public or private sector. Mr Thompson is obviously talented and will arrive in Manhattan battle-hardened, not only from his fights with the UK government, and the unions, but from regular set-tos with the New York Times’ biggest rival, Rupert Murdoch, and his clan. Co-blogger and former FT media correspondent John Gapper – currently on holiday – has tweeted that Mr Thompson is “a good choice for the NYT – former hack, strategic, tough, down-to-earth. Used to opinionated employees and controversy” and “also experienced in running a media icon that thinks a lot of itself – mostly justifiably, sometimes not”. 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