The inside story on Lachlan’s fall from grace

Tuesday, 2 August, 2005

An anonymous News Corp tipper writes:

Lachlan Murdoch got done in by the inner senior News Corp executive circle which includes Peter Chernin, Anthea Disney, John Nallen and finance boss David De Voe.

One.Tel and the disastrous rugby league failure in Australia, both of which came under Lachlan’s watch, saw almost $1 billion go on to the wrong side of the famously tight News Corp ledger. Lachlan never recovered from those financial disasters despite claims to the contrary by his dad. Rupe has a prodigious memory and holds grudges, slights and wrongs long and hard. Lachlan’s power base inside News was severely damaged from that point on. He lost the respect of the corporate financial and management animals who saw to it that he could only spin his wheels. He couldn’t get anything done. He had become a figurehead. The inner circle acted under the treacherous KRM policy of benign non-interference. And he was out.

Rupert of course forgives himself for his own financial transgressions, like overpaying $3 billion for TV Guide and Triangle Publications which was a total failure. TV Guide, which they couldn’t sell, and which has dropped circulation ever since it was purchased, (from 22 million copies weekly to nine million) has changed format, dropped its listings content and will, in a matter of days, become a rabid fan mag. Expected circulation loss? 66%. That dwarfs Lachlan’s transgressions.

Mitch Stern, who successfully headed the Fox TV group for years and who had saved the Fox TV group numerous times, is an independent entity inside News. He is also a pain in the ass and was tolerated by KRM only because of his sheer ability. Stern would not have taken Lachlan on board or listened to him – let alone report to him. While he was at Fox TV Station Group, Stern seriously irritated Murdoch Snr, but now with the Roger Ailes angle floated that he take on Fox TV Stations, Stern’s successor Jack Abernathy may be out. Stern is now at Direct TV reporting to Chase Carey.

More changes are surely on the way. Lachlan’s New York Post appointees like Col Allan and Geoff Booth have got to be wondering about their futures. Col Allan in particular, who’s sink p*ssing antics and drinking habits were tolerated by Lachlan, just may discover that this behaviour is radically out of line with American business sensibilities. None of this is new nor news to News Corp insiders. It’s business as usual on the third floor at 1211 Avenue of the Americas in New York City. Finally, this New York Times article from 1 August is very instructive:

In one example of their deteriorating relationship, Lachlan told someone in close contact with the family that his father dressed him down in a meeting with other top company executives. And two people, one a family friend and the other a company executive, said that Lachlan expressed to them that the final straw was a series of meetings and discussions his father held, without including his son, with Jack Abernathy, the president of Fox Stations, the unit of 35 local TV stations that reported to Lachlan. Lachlan, whose office was next to his father’s, tried repeatedly to express his dissatisfaction to his father, according to the person in close contact with the family.

CRIKEY: You can read Lachlan’s farewell message to News Limited staff on the Crikey website here.