Lachlan got his prize, but like everything in Murdoch world, money was the real winner

When Rupert Murdoch inherited his news empire from his father in 1952, it comprised a scrappy Adelaide afternoon tabloid paper, a pile of debt and the raw ambitions of a 21-year-old neophyte who had never run anything.

When, on Monday, Lachlan Murdoch inherited his news empire from his father – on his 54th birthday – it comprised tens of billions of dollars of assets, including Fox News – the world’s most profitable media business – big daily papers in the US, Britain and Australia, sports broadcasting, book publishing and lucrative online property websites.

Both inheritances, 73 years apart, were messy affairs. When Keith Murdoch died suddenly, his widow, Dame Elisabeth, was forced into bitter negotiations with her late husband’s colleagues to extract a single newspaper that became the launch pad for her son’s eventual media empire.

This week’s Murdoch baton pass was much more acrimonious – and public – because the stakes were vastly greater, financially and ideologically. Lachlan wrenched control of the two Murdoch companies, Fox Corporation and News Corp, after a venomous year-long family legal feud that ended on Monday when his three siblings, James, Elisabeth and Prudence, agreed to sell their stakes in the companies for $1.7 billion apiece.

Instead of the four siblings deciding who would take control of the empire after their 94-year-old father eventually dies, Monday’s deal hands control to Lachlan until at least 2050 (assuming Rupert dies before then). Under the arrangement, he will pay a high price – an estimated $3.4 billion, largely secured by debt – to become the world’s third Murdoch media mogul.

In the end, the money won, as it nearly always does in Rupert Murdoch’s stratosphere. That was despite James Murdoch, the other presumptive heir, publicly positioning himself as the ethical defender of journalism in the face of the right-wing extremism of Fox News and his family’s newspapers.

“There’s this tabloid culture that’s contrarian for the sake of it, and delights in poking people in the eye,” James told The Atlantic magazine this year, in what sounded like a pitch to succeed his father. “At its worst, it metastasises into something nasty and scary and manipulative … I underestimated the ability of a profit motive to make people do terrible things – to make companies do terrible things.”

What he was talking about, of course, was the tabloid culture that has delivered the billions that financed the Murdochs’ self-indulgence this week, and for the past century. Fox News, on its own, rakes in profits of more than $1.5 billion a year, almost certainly more than any media enterprise in history. It has done this, like many of the Murdoch tabloids and Sky News in Australia, by twisting much of its journalism into right-wing entertainment, outrage and resentment.

Lachlan Murdoch’s deal to remove his three siblings from the family businesses, brokered by his father, is designed to ensure the right-wing entertainment and outrage will continue for decades. Or as Rupert Murdoch told his ex-wife Anna during last year’s family contretemps, as reported in court documents: “Fox and our papers are the only faintly conservative voices against the monolithic liberal media. I believe maintaining this is vital to the future of the English-speaking world.”

But unlike the relatively uncomplicated world his father inherited in 1952, Lachlan Murdoch finds himself confronted with immense structural, social, technological and economic challenges that are already threatening the business model that has made him (and his siblings) so rich.

The biggest of these is AI. Almost everyone in media and journalism is watching the rapid evolution of artificial intelligence with nervousness or trepidation or deep concern. None of us knows how this will play out, but we know it will play out.

For Murdoch, who holds his position because of his genes, not natural skills, this could be a testing time to be handed the reins of a global media empire. Take, for example, the most profitable part of News Corp’s business, the online property portal realestate.com.au, valued at $31 billion on the Australian stock exchange. Its main business is presenting properties for sale, funded by vendors who pay many hundreds of millions of dollars to REA to list their properties. But couldn’t that model be replicated by any entrepreneurial interloper, utilising all the powers of AI, for a tiny fraction of those millions?

Even the outrage business model, the feature that has fuelled the Murdoch money-making machine for decades, is vulnerable to transformative technology, AI and social media, which effectively empowers anyone, anywhere, to become a seemingly professional publisher or broadcaster.

There’s one Murdoch asset that has so far been unaffected by AI and the tech revolution: the family’s prodigious political power. Politicians, especially in Australia, where Lachlan lives, continue to deliver for the family that has dictated political terms ever since prime minister Joe Lyons used to turn up regularly at Keith Murdoch’s Melbourne office, almost a century ago.

I observed the Murdoch political potency at work in 2022 when my company’s news website, Crikey, was sued by Lachlan for defamation (he later dropped the lawsuit and paid Crikey’s legal costs). On the day after the writ was issued in the federal court, a large Commonwealth car arrived at the front entrance of News Corp’s Sydney office, disgorging three people who had come to visit Lachlan in his office: Australia’s prime minister, deputy prime minister and foreign minister.

After a century of political servility, as Lachlan Murdoch knows well, some things never change.

Eric Beecher is a journalist and publisher. He is chairman of Private Media, publisher of Crikey, The Mandarin and Smart Company and a former editor of The Sydney Morning Herald. An updated edition of his book The Men Who Killed The News (Simon & Schuster) was published in August.

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