NEW YORK — To the surprise of no one, James Murdoch is now the CEO of BSkyB, a crown jewel of the conglom controlled by his dad. Either James or brother Lachlan, who also runs big chunks of News Corp., will ultimately inherit Rupert Murdoch’s throne.
James is bright and articulate but he’s 30 — at least 15 years younger than the average CEO of a big company.
The global “search” that designated him as the most qualified candidate lasted 30 days. Professional headhunters say the process for a group of BSkyB’s stature usually takes 90 to 120 days.
The close rapport between James’ genes and his career trajectory has critics in a tizzy. But the backlash against him has also unearthed a cautious defense of nepotism.
From giants like News Corp. to smaller fry like World Wrestling Entertainment, nepotism is especially common in media and entertainment. It’s so much sexier than other businesses that the kids want to stay in the picture — and “it can work out better than you might think,” says one News Corp. exec.
He thinks “the big age differential with Rupert” has been tough on Lachlan and James. “They’re just young. If they were in their early 40s and not 30, it would be very different.” Rupert Murdoch is 72.
Family members are “emotionally, psychologically and financially invested in the company” and have grown up breathing the business, says Walter Montgomery of Robinson Lerer & Montgomery.
True, some heirs are corrupt and incompetent — but so are greedy, take-the-money-and-run execs with golden parachutes.
For every pater familias like Adelphia’s John Rigas, there are dozens of Dennis Kozlowskis and Kenneth Lays, the disgraced hired guns at Tyco and Enron.
Edgar Bronfman Jr., the former Seagram CEO born with a silver spoon, and Gerald Levin, who clawed his way to the top of Time Warner, both engineered equally disastrous mergers.
“You just hope there aren’t any bad eggs,” says Vicky Goldman, who heads the West Coast media and entertainment practice for search firm Heidrick & Struggles.
“It doesn’t bother me in and of itself. There are just some children I’d rather not see running the operation,” says Dennis McAlpine of McAlpine & Associates.
New York-area Cablevision is one company that’s given nepotism a bad name. Founder Charles Dolan is well respected; his son James Dolan is not. “What does Chuck Dolan want out of Cablevision — a dynasty for his son or maximum value for shareholders? It’s becoming clear he can’t have both,” warned an article in Forbes earlier this year.
By contrast, Brian Roberts, son of Comcast founder Ralph Roberts, has grown his family biz into a national powerhouse. (Roberts’ second-in-command Steve Burke hails from a well-respected dynasty himself. Father Dan helped found broadcaster Capital Cities and ran CapCities/ABC. Brother Bill heads the Weather Channel. “Dan should have had more children and put them in the business,” jokes Goldberg.)
Many think Hugh Hefner’s daughter Christie has surpassed her father in savvy management of Playboy.
And Wall Streeters wonder if Viacom chief and controlling shareholder Sumner Redstone is quietly grooming his daughter Shari to take over. She’s a seasoned exec after years of running theater chain National Amusements and sitting on Viacom’s board.
Hereditary succession can create headaches for shareholders who would like more say in who runs the companies their portfolio depends on. It’s why regulators are cracking down on corporate boards. If reforms take hold, it may get harder for mom and pop to rubber-stamp junior.
Too much family can hurt morale inside a company as well.
“You can have somebody second-guessing you who may not be as smart as you are, and there’s no way to win that battle because it’s the boss’s son,” says one media exec.
If it has to happen, McAlpine notes, “You’d like to see a heavy dose of oversight and lots of direction by the father.”
That’s a heavy burden for offspring.