It's Prime Time For The Murdoch Kids

Which one will fill Dad's shoes at News Corp.?

When the Murdoch clan gathers round the table this Christmas at the family's oversize Aspen (Colo.) ski lodge, it may be hard to tell the holiday festivities from a business meeting. This year, as News Corp. Chairman Rupert Murdoch launches into his usual ultracompetitive game of after-dinner charades, the contestants will include three new members of his top management team.

After years of running his media giant, News Corp., like a fiefdom, the 65-year-old Murdoch is showing signs that he will one day turn over control to three of his four children. In recent months, each of the trio--Elisabeth, 28, Lachlan, 25, and James, 23--has been given a high-ranking job running a piece of News Corp.'s far-flung operations. Not that Papa Murdoch--who took control as a 22-year-old of a business then consisting of a couple of family-run newspapers in Australia--is retiring. "I really haven't given it much thought," he says. "I imagine I'll be around for a while."

Still, that hasn't stopped fellow media moguls from handicapping what might be a 10- or 20-year race. By most insider accounts, firstborn son Lachlan, who shares his father's conservative politics, is the heir apparent. Like his dad, he cut his teeth--albeit briefly--on newspapers. He was a cub reporter for The Times of London in the summer before his 1994 graduation from Princeton University. Just after graduating, he was appointed general manager of News Corp.'s two-paper Queensland Newspaper unit in Australia. In September, he moved up the corporate ladder to managing director of News Ltd. of Australia, and in rapid order also was named deputy chairman of its Asia-based Star Television Ltd. unit and a member of the parent company's board.

Like each of the Murdoch kids, Lachlan is studying under a veteran News Corp. executive--in his case, Australia head Kenneth E. Cowley. His first lesson: After bidding $300 million to start a new Australian rugby league for its pay-TV unit, News Corp. then had to wage an expensive and ultimately successful legal battle to carry the games. Lachlan also is the most outspoken of the siblings about wanting to run the company. "Yeah, of course I would," he said in an interview this summer. "Anyone would. It's probably the best job in the world."

If Lachlan has serious competition, it's half a world away, in London, where his sister Elisabeth is apprenticing under British Sky Broadcasting Ltd. Chairman Sam Chisholm, who runs the satellite delivery system, which is 40% controlled by News Corp. Elisabeth, general manager of broadcasting for BSkyB, began her career with rival media mogul Kerry Packer's Nine Network in Australia. The Vassar grad left that company in 1992 and worked her way up through various jobs at Fox Television Stations Inc.'s KSTU in Salt Lake City and at the company's FX cable network.

Considered the most aggressive of the three kids, Elisabeth proved her dealmaking skills last year after buying a pair of California TV stations with a $31 million loan guaranteed by her father. Elisabeth and her Ghanaian-born husband, Elkin Pianim, improved earnings 30% by slashing costs and bringing in racy new programming to attract younger viewers. The pair, who own a venture capital firm, sold the stations 16 months later for a $12 million profit.

CREATIVE. Little brother James, considered by some News Corp. insiders the quickest study of the three, revels in the creative aspects of the business. In the summer of 1994, while at Harvard University, he worked on the set of the Fox movie Rising Sun. Two years ago, against his father's wishes, he dropped out of college and started the Rawcus Entertainment music label. The company launched cutting-edge hip-hop and rap artists such as the Rose Family and Company Flow, and Plastique.

In early December, James was named News Corp.'s vice-president for music and new media, heading a joint venture with Japanese rock star Tetsuya Komuro to launch a major Asian record label. James also is expected to help Murdoch's American Sky Broadcasting satellite service create a competitor to MTV Networks.

With the company juggling high-risk undertakings on three continents and facing intense competitive pressure at every turn, none of the three siblings (their older half-sister, Prudence, is not involved with the company) would be likely to take the top job immediately if something unexpected happened to Rupert. In October, the News Corp. chairman, who controls 32% of the company, named a five-person office of the chairman that includes newly appointed co-Chief Operating Officers Peter Chernin and Chase Carey. Murdoch's novelist wife, Anna, who sits on the News Corp. board, would likely become chairman until one of her children could take over.

Whatever happens, the Murdoch brood no doubt hopes to avoid an ending like the one penned by Anna M. Murdoch in her book Family Business. In that fictional tale, a media empire comes undone and is sold when four greedy children fight for control because their father died without choosing a successor. That's probably one title that won't come up in the Murdochs' charades game this Christmas.

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