Move fuels speculation on succession at Murdoch empire
The return of Elisabeth Murdoch to News Corp. after a decade away promises to heighten the scrutiny she and her brother James will face both in and outside the company as Rupert Murdoch ponders a succession plan for his media empire.On Monday, News Corp. confirmed the deal that has been rumored for weeks — and has been in the works since last summer — in announcing it’s reached an agreement in principal to purchase Elisabeth Murdoch’s Shine Group in a pact that values the production company at $674 million. The Shine deal has ignited a storm of speculation about Rupert Murdoch’s next chess moves with his children. In the short term, News Corp. and Shine insiders insist that Elisabeth Murdoch’s focus will be solely on running Shine as an autonomous entity within News Corp. As chair- CEO of Shine Group, Elisabeth Murdoch will report to News Corp. prexy and chief operating officer Chase Carey. Specific terms of the deal are still being ironed out, and the transaction must win approval from regulators and the boards of News Corp. and Shine. Elisabeth Murdoch controls 53% of Shine. Sony owns another 20% and BSkyB owns 13%, with the rest held by top Shine execs. The Shine deal comes as News Corp. is in the thick of a tough fight with British regulators to acquire the remaining 61% of BSkyB that it does not already own. “In a rapidly consolidating global TV industry, this alliance uniquely provides the conditions in which Shine Group can continue to lead and prosper,” Elisabeth Murdoch said in a statement. “News Corp. is the partner that enables us to maintain our aspiration to be best in class across all our sectors and prepares and equips us for future growth. Shine shares News Corp.’s long-standing belief in creative excellence and ambitious expansion. I could not be happier or more proud that from such modest beginnings Shine will join such an extraordinary group of companies.” One of Elisabeth’s major motivations to sell the company she has built during the past decade stems from the dramatic consolidation among indie production entities in the U.K. and Euro TV market during the past two years. Even Hollywood’s majors have swooped in for opportunistic purchases, including Time Warner’s acquisition of Shed Media last year. The deal with News Corp. gives her a well-heeled partner with global reach — and it affords her a kind of freedom to continue calling her own shots that she might not be able to secure from another buyer. Shine will continue to operate out of its existing London offices. “This deal is about opportunity for Shine,” said one company insider. On top of the succession considerations in play, Shine’s operations make for mostly a good fit with News Corp., which has been focused on expanding its international TV production capabilities. During the past two years, Shine has spread its wings outside the U.K. with the launch of Shine France, Shine Australia and Shine Germany. “Shine is a leader in the global television production business with a proven track record of developing hit shows and new formats worldwide,” Carey said in announcing the deal. “We have every confidence that Shine will be an important part of the expansion strategy for our worldwide TV operations.” Shine’s major U.S. outpost, the Reveille production banner, does overlap with existing News Corp. entities such as 20th Century Fox TV and Fox TV Studios. But Reveille will remain a stand-alone entity. The company, home to NBC’s “The Office” and “The Biggest Loser,” has struggled to field a successful scripted series in recent years. At present it has two high-profile pilots in contention, the zombie drama “Awakening” at CW and Jack Black-produced laffer “My Life as an Experiment” at NBC. Rupert Murdoch emphasized the strength of Shine’s management team and its track record of fielding popular franchises such as the cooking show “Master Chef,” which has been successfully exported to several major territories. “Shine has an outstanding creative team that has built a significant independent production company in major markets in very few years, and I look forward to them becoming an important part of our varied and large content creation activities,” Rupert Murdoch said. Elisabeth Murdoch worked in programming for FX in the mid-1990s and at BSkyB later in the decade before leaving to launch Shine in 2001 — after well-publicized clashes with then-BSkyB topper Sam Chisholm. It’s been an open secret in the media biz that Rupert Murdoch has long wanted her to return to the fold, signaling his desire for her to help him chart the future of the company. An observer of the company said Monday: “Somebody is giving James a run for his money now. If she proves to be as formidable a presence inside the company as she has outside, then she is clearly in the running. She is really the only one of the kids who has truly proven herself, building a big business of her own from scratch.” In a rare interview last year with British newspaper the Guardian, Elisabeth described the incessant chatter about News Corp. succession as “inappropriate,” adding that “we’ll all work closely together, but whether that means in executive roles, I don’t know. That’s the best I can answer without answering that.” (Steve Clarke contributed to this report.)
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