Murdoch Brothers Assert Their Power With Bold Moves at Fox

James Lachlan and Rupert Murdoch
Joel Ryan/Invision/AP

In the first months after James and Lachlan Murdoch rose to the top of their family’s media empire, change was slow to come — so much so that some observers wondered if, and when, the brothers would step out from their father’s formidable shadow.

But a series of provocative moves at 20th Century Fox — reaching a crescendo last week with their first major management overhaul — underscore the fact that their moment has arrived.

First, in February, the duo engineered a voluntary buyout plan that saw 400 longtime employees leave the company as part of a mandate to slash $250 million of overhead. Then, last week, they orchestrated the ouster of veteran business executive Greg Gelfan. The week concluded with the revelation that the 40-something heirs would usher in new leadership at the movie studio, putting co-chairman Stacey Snider in place to succeed chairman and CEO Jim Gianopulos when his contract expires next June.

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Snider’s former bosses David Geffen and Jeffrey Katzenberg praised her June 11 — the day her impending promotion was leaked — saying she was a multi-faceted leader who was well prepared to take on every aspect of running a studio, not just reading scripts and schmoozing talent.

That said, Snider’s impending ascension brings with it a great deal of angst among the studio’s top division heads and Gianopulos loyalists, especially Emma Watts, the main studio’s production chief, and Elizabeth Gabler, who runs Fox 2000. Their futures at Fox have been thrown into question by the management shift. It is highly unlikely that Gianopulos will stay on as a “strategic consultant” to studio parent 21st Century Fox after the management transition, though he has been offered that position by the Murdochs.

Snider’s test will be forging ties with top managers, who also include division chiefs Steve Gilula and Nancy Utley, who oversee Fox Searchlight, and Vanessa Morrison, who guides animation. That hurdle appears to be greater because Snider was first lured to Fox by Rupert Murdoch and has now been ratified by his sons, against the objections of some on the Century City lot. Insiders fault the Murdochs for muddying the waters at the studio by not making Snider’s role clear when they tapped her in November 2014.

The facile view of the shift from both inside and outside the Century City studio is that the Murdoch brothers picked Snider in the hopes that her connections to directors, screenwriters, and stars will power a new generation of creativity at Fox. But the concern is that any strengthening of ties to the entertainment industry’s creative class could be undercut by the loss of savvy leadership in areas like production, distribution, marketing, international production, and, particularly, cost control.

The Murdochs are betting that Snider, 55, a veteran of Tri-Star Pictures, Universal Pictures, and DreamWorks Studios, will bring so much high-end talent into the Fox fold that the film studio’sprofile will soar — and that Fox’s tradition of tight budgets and hard-knuckle dealmaking with agents and talent, which has helped it finish many years as one of the most
profitable studios, will not be diminished.

“Jim is the kind of leader that you dream of as a filmmaker, and Stacey is cut from the same cloth.”
Paul Feig

At a recent investor conference, James Murdoch made clear the urgency for companies such as 21st Century Fox to amass a stable of hit makers in order to weather the era of media fragmentation. The thinking goes, the way people watch movies and television shows may change, but they will always pay a premium for the new, the fresh, and the revelatory.

“How do we have more hits?” James mused rhetorically. “That comes down to, how do we have a culture where we can attract the best creators to come and work with us?” An associate said that concept was “huge” for both James, 43, and Lachlan, 44.

Snider boasts relationships that reach from the investor class to board rooms and creative suites, starting with the trio of moguls who helped promote her career — Spielberg, Katzenberg, and Geffen. She has developed a reputation for being an advocate for filmmakers throughout her years at rival studios.

Her bona fides complement the work Gianopulos and production chief Watts have done in recent years to varnish the studio’s image, and make it more welcoming — sometimes indulgent — of top talent. Several allies inside Fox said none of the talent chops credited to Snider should diminish the strong creative ties Gianopulos has with top producers and directors, such as James Cameron and Ridley Scott.

Under former studio co-chairman Tom Rothman, Fox developed a reputation for being relentlessly focused on the bottom line — a thriftiness that alienated some filmmakers and talent. That’s partly the reason the Murdoch brothers moved to oust Gelfan, who oversaw business operations, and was tasked with negotiating deals. His habit of grinding down filmmakers’ asking prices alienated some top talent agents.

Paul Feig, who worked with Snider on “The Peanuts Movie” and directed “Spy” for the studio, said he recently renewed his deal to keep his Feigco Entertainment banner at Fox for another three years, because he appreciates the culture.

“It’s an embarrassment of riches, because they’re so concerned with both the quality of the films and happiness of the filmmakers,” Feig said. “Jim is the kind of leader that you dream of as a filmmaker, and Stacey is cut from the same cloth.”

Simon Kinberg, the “X-Men: Apocalypse” writer and producer, echoed Feig’s enthusiasm about Snider. “She’s supportive and trusting of filmmakers,” he said. “She approaches movies from the point of view of character and emotion.”

But some inside the studio hope that strengthened ties to some of the creative class will not be accompanied by an explosion in costs.

Succession Plan: Stacey Snider and Jim Gianopulos Eric Charbonneau/REX/Shutterstock

“She is very well-liked, and has great relationships with agents and with talent. There is no denying that,” said one Fox executive who asked not to be named. “But the other question is, is this a Trojan horse, for those people, that is going to destroy the economics of the studio?”

A Fox executive said the recent employee buyouts should dispel any notion that a spendthrift culture is taking root. “The company has a very strong management team which works very closely together,” the executive said. “And I don’t think there should be a concern at all about runaway costs.”

During her 19 months at the studio, Snider has struggled to find her footing and assert herself. Rupert Murdoch may have been smart to have a savvy manager in the wings to someday take the studio reins, but some insiders argue that he did Snider and Fox executives a huge disservice by hiring her at time she wasn’t needed — the studio was not only experiencing its best box office year ever, but had set an industry record in 2014.

“She was hired to fill a need that didn’t exist, and worked hard to find a spot for herself,” said one insider. “I think she was shocked that she was not embraced. Outsiders have a hard time integrating here. And the fact that she was forced on Jim and forced on Fox by the Murdochs was not appreciated.”

Considering Snider’s challenging first year and a half at Fox, a confidant credits her with maintaining a diplomatic stance and using a light hand with the studio’s management team.

“She tried to be a good soldier and not step on toes, even if people were dissing her and not paying attention to her,” said the source, who asked not to be named. Next year’s elevation to CEO “should kind of fix that,” she said.

Her fans predict that Snider will work hard to build relationships with Watts and the other Fox executives who are said to resent her. “Let’s face it,” added Snider’s ally, “it has been very confusing for everyone.”

Katzenberg, DreamWorks Animation’s CEO, is one of the people who rejects any notion that the Murdochs rocked a smooth-sailing ship.

“This is a really great testament to, frankly, good management,” he said. “It demonstrates the kind of long-term strategic thinking and planning that the company has done and provides for a smooth succession, which is the rarest of occurrences in the movie industry.”

A friend of both Gianopulos and Snider said the early announcement of her elevation could help clarify matters, but acknowledged that it’s uncertain when, and if, the roiling waters will settle. “It’s a valiant attempt to do that,” says the friend, adding with a chuckle, “We will see how that works out in the real world.”

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