A Murdoch may helm Disney

Walt Disney Company is in talks to buy Fox assets and Mr James Murdoch may be offered the top job

Mr James Murdoch.
Mr James Murdoch.

LOS ANGELES • With Walt Disney Company and 21st Century Fox discussing a historic combination of their businesses, one question keeps coming up: Could a Murdoch end up running Disney?

Disney, the world's largest entertainment company, is in talks to buy Fox assets in a deal that could approach US$50 billion (S$67.5 billion) or more. The companies have held on-again, off-again negotiations for more than a month for properties including the FX cable channel, Sky pay-television service in Britain and Fox's film and television studio in Los Angeles.

Mr James Murdoch, the 44-year-old son of founder Rupert Murdoch and Fox's chief executive officer, could move to Disney if offered a senior role there after a deal. That possibility evokes strong responses from admirers and detractors of the Murdochs and their reign over the Fox media empire. 

Some investors and analysts say there are few executives with Mr James Murdoch's experience building and running an international media business.

Others question whether Disney ought to employ an executive who has led a company embroiled in scandal, including phone hacking in Britain and sexual harassment at the top of Fox News Channel.

"There are two ways to look at it," said Mr Richard Miller, a Disney shareholder at Gullane Capital Partners. "The Murdochs have been very adept at creating value for shareholders over the long term. On the other hand, some of the more tabloid things the Murdochs have done give one pause."

Fox, based in New York, declined to comment and said Mr James Murdoch would not comment either.

A deal with Burbank, California-based Disney is not certain. Fox, led by Mr Rupert Murdoch and his sons, James and Lachlan, is not talking exclusively to Disney. There is a chance Comcast Corp could sweep in with a better offer or that nothing happens at all.

But taking a role managing some of the assets sold to Disney, with a potential path to the top job at the movie, television and theme-park giant, would be an elegant exit for Mr James Murdoch.

He has had his hands full with the barrage of scandal at Fox News, an organisation he has technically overseen but has limited control over.

While his father has championed conservative causes, Mr James Murdoch and his wife Kathryn founded Quadrivium, a foundation focused on promoting science, equal opportunity and environmental causes. Politically, that aligns him more with Disney's CEO Bob Iger, who quit United States President Donald Trump's advisory panel over a climate policy dispute this year.

Entrepreneurial like his father, Mr James Murdoch dropped out of Harvard University in 1995 to back a record label that spawned hip-hop acts Mos Def and Talib Kweli. He was the youngest CEO of a Financial Times Stock Exchange 100 company after his father appointed him head of Sky and he was a rising star as head of international operations at News Corp, which owns The Wall Street Journal, The Times of London and The Sun.

Revelations that employees at the News of The World, a News Corp paper, had hacked into the voicemail of celebrities and other public figures cost Mr James Murdoch his job at News International in 2012 and his chairmanship of Sky. The Murdochs were not accused of wrongdoing and no charges were brought against them or their company.

But they were forced to abandon News Corp's effort to buy out other investors in Sky and Mr James Murdoch was criticised by British media regulator Ofcom, which said he had failed to take action.

Mr Murdoch spent the following years building himself back up, moving to New York and eventually rising to co-chief operating officer for 21st Century Fox, the media business split from News Corp in the wake of the hacking scandal.

He played a role in Sky's 2014 acquisition of Fox stakes in Sky Deutschland and Sky Italia, and led Fox's investment in Vice Media. In July 2015, he became CEO of Fox.

A year later, the Murdochs were engulfed in another scandal, with accusations of sexual harassment levelled against Fox News Channel's founder Roger Ailes and, later, its star Bill O'Reilly, the most-watched personality on cable news. 

The new scandal has complicated the Murdochs' second bid to gain full control of Sky, contributing to extensive reviews by British officials, this time including Fox's handling of the harassment cases. In determining Fox would be a fit and proper owner of Sky, Ofcom noted the Murdoch brothers had revised Fox's corporate governance to prevent future misconduct.

While a role for Mr James Murdoch at Disney is not part of the negotiations, according to people with knowledge of the matter, a deal could offer him a future there.

Potential successors to Mr Iger have left Disney over the past few years and the board has extended its CEO's retirement date four times, a sign no inside candidate has wowed the directors. There is "no one inside of Disney who is as qualified" to succeed Mr Iger as Mr Murdoch, said Mr Brian Wieser, an analyst with Pivotal Research Group.

Given a chance, Mr Murdoch could prove himself over time, particularly if Disney's board extends Mr Iger's contract again beyond the current July 2019 expiration. CNBC and The Wall Street Journal said the contract could be extended if Disney did a major deal with Fox.


A version of this article appeared in the print edition of The Straits Times on December 11, 2017, with the headline 'A Murdoch may helm Disney'. Print Edition | Subscribe