Rupert Murdoch weighs merging News Corp and Fox Corp.
AYESHA RASCOE, HOST:
Rupert Murdoch split his media empire up nearly a decade ago. Now he's considering unifying News Corp. and Fox Corp. once more. A possible deal is being evaluated by the boards of both companies. If they do merge, it would represent a dramatic and unexpected reversal. NPR media correspondent David Folkenflik has covered Rupert Murdoch for many years, and he joins us now. Welcome.
DAVID FOLKENFLIK, BYLINE: Hey.
RASCOE: So, David, back in 2013, Rupert Murdoch said the two companies were better off being split apart. What was the rationale back then?
FOLKENFLIK: Well, let's acknowledge the properties involved. On the print side, you got The Wall Street Journal, The New York Post, in the U.K. the Times of London, the Sun tabloid, and a bunch of things in Australia. And, of course, on the broadcast side, you have the most important element - Fox News, the TV stations, Fox Sports. And at the time they also had the Fox Hollywood holdings. They wanted to unlock the value of broadcast. And this became a trend in the industry. You saw Gannett splitting itself apart. You saw Tribune splitting itself on the print side, the newspaper side, and the TV side. And there was this effort to say, let's separate it. The TV sides are going to flourish. But there's also the unstated current of concern. There had been this huge scandal involving the British tabloids - the hacking into the voicemails and cell phones and emails and a lot of other things of just scores of people in the U.K. And there was still the concern that the Murdochs might be investigated in the U.S. for that - for bribery and Foreign Corrupt Practices Act violations. And by splitting it apart, it would have protected the TV properties, the most profitable part of it, from any investigations of what had gone awry on the newspaper side.
RASCOE: So is there a financial imperative to join these two back together now?
FOLKENFLIK: Well, I don't think there's any great financial imperative. Certainly the newspaper side has kind of stabilized a bit. You've seen some real hits being taken in the U.K., in Australia and on the New York Post side. But The Wall Street Journal, the most important title, has stabilized. And with digital subscriptions, they've done pretty well. You know, there's also this big-ticket cloud over the Murdochs with these multibillion dollar lawsuits filed by these two election software companies over these lies that were spread on Fox News immediately in the wake of the 2020 presidential elections. And we'll see how those defamation lawsuits play out. But I don't think that really affects one way or another whether or not financially this makes huge sense. They just say there's a lot of synergies to be gotten from these two halves that were split apart and could come back together.
RASCOE: Always looking for those synergies.
FOLKENFLIK: Right, right.
RASCOE: Rupert Murdoch's son Lachlan is the executive chairman of Fox Corp. and Rupert's designated successor. He said back in 2019 that Fox Corp. would not buy News Corp. So what changed?
FOLKENFLIK: Well, technically, this would be a stock swap, right? So it's structured a bit differently. They would argue the landscape's a little clearer. You know, Fox Corp. is stripped down. In 2018, you know, they had this great deal with Disney where they sold off most of their Hollywood holdings. They ended up selling a huge satellite property in the U.K. to Comcast. And Fox is now making money in streaming with Tubi, an advertising-driven property. But let's be honest, this is really kind of inevitable that Rupert Murdoch would want to unify these two halves of his empire if he could. Now it looks like he can.
RASCOE: So let's talk a bit more about succession. That's a word we hear a lot on TV and elsewhere. Murdoch is 91 years old. So how does this play out?
FOLKENFLIK: Well, assuming it goes through, you'd see Lachlan Murdoch, his elder son, consolidate control. Robert Thomson, who's the head of News Corp., a confidant, Australian newspaperman, longtime friend of Rupert Murdoch, would almost certainly step down in the near future. And then there's the question of when Rupert goes. Three of the other adult kids have equal votes with Lachlan in deciding on the family trust of what happens. But in the immediate future, what does it mean? It means you'd have Rupert Murdoch back in the saddle of a consolidated empire, undaunted, as though the scandal at the U.K. tabloids never happened. Perhaps, perhaps, you would see, you know, Murdoch once more at the head of his media empire as his final chapter in corporate life.
RASCOE: That's NPR media correspondent David Folkenflik. David, thank you so very much.
FOLKENFLIK: You bet. Transcript provided by NPR, Copyright NPR.