Rupert Murdoch’s Retirement Has Fox Insiders Stunned: “I Never Thought He’d Do It”
From the beginning, Rupert Murdoch ran his media empire like a king who planned to die on the throne. Even death itself seemed up for debate; “I’m now convinced of my own immortality,” Murdoch famously declared in 1999 after beating prostate cancer at the age of 69. Which is why it was shocking Thursday morning that Murdoch announced he would be stepping down as chairman of Fox Corporation and News Corp, the global media conglomerates he built out of a small Australian newspaper company he inherited from his father in 1952. In November, Murdoch will take the title of chairman emeritus and hand the reins to his oldest son, Lachlan, the current CEO of Fox Corp. I was leaving a coffee shop in Lower Manhattan when my cell phone lit up with calls and texts from current and former Fox staffers searching for an explanation. “I never thought he’d do it,” a former executive said.
Murdoch’s memo to employees sent contradictory signals about the 92-year-old mogul’s decision to retire. On the one hand, Murdoch wrote that “the time is right for me to take on different roles, knowing that we have truly talented teams.” But he also indicated he wasn’t really going away: “I will be watching our broadcasts with a critical eye, reading our newspapers and websites and books with much interest, and reaching out to you with thoughts, ideas, and advice. When I visit your countries and companies, you can expect to see me in the office late on a Friday afternoon.”
The announcement’s ambiguity, along with its unexpected timing, raises significant questions, chief among them: What really made Murdoch decide to retire now after having resisted succession for decades?
Current and former Fox executives are debating different theories today. One is that Murdoch, who turns 93 in March, had an unreported health crisis, which could be considered a material event for a publicly traded company. Murdoch’s memo shot down this line of speculation. “Our companies are in robust health, as am I,” he wrote. But my May Vanity Fair cover story reported that Murdoch had been secretly hospitalized in recent years for a broken back, seizures, two bouts of pneumonia, atrial fibrillation, a torn Achilles tendon, and COVID-19. Murdoch wanted these incidents out of the press. According to a source close to Murdoch, he used the pseudonym “Mr. Black” when being admitted to a hospital in order to avoid the media. So, given this history of hiding health scares, it’s entirely possible that illness forced Murdoch into retirement.
The second theory is that Murdoch’s retirement is related to Smartmatic’s $2.7 billion defamation lawsuit against Fox News. Smartmatic is suing Fox over the network’s false claims that its voting machines were used to steal the 2020 election from Donald Trump. Sources speculated that Murdoch is retiring to avoid having to testify in the Smartmatic proceedings. “This takes him out of the line of fire,” a prominent media executive said.
In April, I reported that Fox settled with Dominion Voting Systems for $787.5 million on the eve of the trial at least in part because Fox lawyers didn’t want Murdoch to testify in open court. “They were hoping and praying to settle for months, but they didn’t want to pay up,” a source told me. The source said the lawyers told Fox execs that once the trial began, Murdoch would be “disgraced on the stand, run out of the boardroom, and his testimony [would] expose him as a lunatic sliding into senility.” (A person close to Murdoch disputed this: “Rupert was very well prepared to testify.”)
On Wednesday, Fox lawyers made it clear they don’t want Murdoch to testify in the Smartmatic case, asking a New York State judge to dismiss Fox Corp. from the suit because Murdoch wasn’t involved in day-to-day editorial decisions.” In response, a Smartmatic lawyer, Erik Connolly, compared Murdoch to “a Mafia boss ordering one of his lieutenants, ‘Take out Johnny Two Bones.’” “Unquestionably, we would all say the Mafia boss participated in the hit when the hit happened,” Connolly said. “The exact same thing happened here. Rupert and Lachlan Murdoch ordered a hit.”
Another theory is that the company is facing some unknown scandal. “They are trying to get ahead of something,” a person close to the Murdochs told me.
One thing is certain: Murdoch’s formal retirement will deepen Fox’s leadership void. The company will be solely run by Lachlan, who lives in Sydney, and is seen by many to be less engaged than his father. “Lachlan goes to the rock climbing gym every day. I think he has kind of lost interest since James left, but he is still trying to impress his dad,” a person close to Lachlan told me for my May cover story. Lachlan has largely relied on Viet Dinh, Fox’s chief legal officer, to run the company day-to-day from Los Angeles. But it was announced in August that Dinh will be stepping down at the end of the year, seemingly in part over his handling of Fox’s Dominion defense strategy. How Lachlan handles the pressures of being the new king will determine the future of a media empire that shapes conservative politics on three continents.