Lachlan Murdoch: ‘There’s No Certainty’ on Fox/News Corp Recombination

The Fox chief executive addresses the “why now” and how to use the balance sheets of both companies to fortify earnings

lachlan murdoch
Lachlan Murdoch in 2019 (Photo by Dia Dipasupil/Getty Images)

Rupert Murdoch is ready to get the band back together — nine years after he split his media empire’s news division from entertainment.

And the heir apparent? Lachlan Murdoch, who made no issue of calling out the elephant in the room when Fox Corp. reported better-than-expected earnings on Tuesday. This was also the first time a member of the Murdoch clan, which includes six heirs, has even brought up the topic of a recombination of right-leaning media giant News Corp. with the now television prowess of Fox.

“As has been made public, separate special committees have been set up at News Corp. and Fox,” Lachlan Murdoch said in a call with analysts. “We will need the approval of both committees and shareholders. The special committees have not made any determination at this time, and there’s no certainty the company will engage.”

The “reunited and it feels so good” plan would combine the parent of Fox News with that of The Wall Street Journal and New York Post. Rupert Murdoch and his family trust, which controls about 40% of the voting stock at both companies, proposed the combination to their respective boards about a month ago. A majority of the non-family shareholders would have to approve such a deal.

Wall Street wasn’t letting him get away with a prepared statement. Bank of America senior media analyst Jessica Reif-Ehrlic started the meeting with a “I know you don’t want to comment on this…” that launched an almost hour-long conversation. Fox’s board meets for their annual meeting on Thursday, where the topic of reunification will be front and center.

“I really can’t talk about it,” he said. “It’s a process and not up to me to discuss the conversations [the boards] are having or can I even talk about it.”

But Murdoch spoke like the next boss of a combined and strengthened Fox if the News Corp purchase goes through. It’s all about scale, he said, at a point when many of Fox’s rivals are getting bigger by the minute thanks to the latest Hollywood acquisition spree.

He was taking direct aim at Warner Bros. Discovery, whose CNN is a close second in ratings behind the Murdoch’s Fox News. Discovery Communications acquired the iconic Warner Bros. studios from AT&T in a $44 billion deal that closed in April.

“Scale, you have to be focused right,” he said. “Scale is important because what we’ve seen among our media peers is they are betting bigger. Scale lends flexibility in many ways, we continue to grow our business and look at M&A and be disciplined. Particularly in the next couple years.”