The hidden message in Rupert Murdoch’s latest maneuver

Rupert Murdoch has a long history of tricking his rivals with unexpected business maneuvers. With some notable exceptions (he famously blew billions on the embryonic social media platform MySpace), the 91-year-old entrepreneur is a master business tactician with a track record of deftly timing the markets.

That’s why his latest unexpected move – to look more closely at the reunion of News Corp and Fox Corp, the two companies he tore apart less than a decade ago.

Though it’s been talked about for years, the announcement late last week that News Corp and Fox Corp are exploring a partnership raised more than a few eyebrows on Wall Street.

“This isn’t exactly how we envisioned Fox’s endgame,” analysts at research firm Moffett Nathanson wrote. “[W]I don’t think Fox investors will be happy with this outcome as currently announced.”

Rupert Murdoch with Lachlan;  after an argument with his father in 2005, Lachlan - Rupert's eldest son and heir apparent - returned to the family business 10 years later.

Rupert Murdoch with Lachlan; after an argument with his father in 2005, Lachlan – Rupert’s eldest son and heir apparent – returned to the family business 10 years later.Credit:Getty Images

In 2013, when Murdoch decided to split his multi-billion dollar corporate empire, News Corp was reeling from a phone hacking scandal at its British tabloids and the print media business worldwide was being severely challenged. News Corp’s exposure to print lowered the overall valuation and weighed on fast-growing US film and television assets.

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Much has changed for both the Murdochs and the wider media business since then. Newspaper companies that have transformed their operations through digital subscriptions are no longer unloved by the market. And the Murdoch line of succession has been settled with eldest son Lachlan now firmly in charge, following the bitter departure of younger brother James.

The two Murdoch companies that emerged during the warranty period are also very different from nine years ago. News Corp still owns a wide variety of global and local newspapers (including the Wall Street Journal, The Times and The Australian), but now makes most of its money from digital real estate ads.

Meanwhile, Fox Corp is also another beast. Murdoch sold his entertainment assets to Disney for $80 billion, a top deal that is now considered a masterstroke. It was timed just before Netflix and streaming shattered Hollywood’s economy. Fox Corp is now focused on live news – it owns the top-rated US cable channel Fox News – and live sports (and the adjacent thriving business of US sports betting).

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