Isaiah Berlin famously divided thinkers into the foxes, who know many things, and the hedgehogs, who know just one. You could do the same with business leaders. Some stick to just one industry or sector for decades – in some cases for generations – while others chop and change, plot and scrabble their way through their careers. The past couple of years have proved that Rupert Murdoch is most certainly on the foxy side.
The value of shares in Murdoch’s companies has rocketed since the dark days of 2011. That was when he was hauled before the British parliament (and got a cream-pie in the face while being questioned) after it emerged that journalists at his tabloid the News of the World had hacked phones on an industrial scale, including a murdered schoolgirl’s.
Schadenfreude was all the rage and Murdoch’s decline was widely predicted. When he closed the paper, following a car-crash appearance by his son James in parliament, things looked even grimmer.
Ever since then, some shareholders have tried to force out the dirty digger (as Murdoch is not-entirely-affectionately known) on the grounds that his empire would be worth more broken up then it is in one piece.
Their complaints about the management of the Murdoch empire are tangled with a desire to oust the 83 year-old head himself. They say the dual-class share structure, which gives Murdoch de facto control of the business despite owning just 14% of the economic shares, is problematic and say that he prevents them realising their investment’s full value.
However, while it is true that the business is worth more broken up, it is false that Murdoch stands in the way of doing it. He has (admittedly under duress) split the newspaper and the filmmaking branches. The share-price of the latter has increased from under $15 in mid 2011 to almost $39 now, while News Corporation’s shares have stayed more or less flat.
According to research firm Sanford C Bernstein, shareholders are $2.6bn better off as a result. It has not been easy, clean or painless, but Murdoch can with some justification claim to be a good steward of the business, and tell activist shareholders to shut their mouths.
The good work has also shored up the positions of his sons James and Lachlan who not long ago were seen as weak and ineffectual. Now it is being suggested that one could take over the news side of the family business, and the other the entertainment side.
It’s all good proof of Murdoch’s foxy proclivities. That he has gone some way to bowing to shareholder demands, but in such a way that has actually strengthened his family’s position, is vulpine to the extreme.
However, the idea that his sons are a shoo-in for top jobs once Murdoch wanders off into the sunset is too clean. As we have argued before, Prince Alwaleed Bin Talal, the Saudi who controls a good chunk of the super-shares in News Corporation, stands in the way.
Two months ago the prince abstained during a shareholder vote to oust Murdoch, making the vote far closer than it needed to be. If Murdoch is to get the end-game he wants, he has to nudge Bin Talal back into line.
The old fox will stick around long enough to upset a few more hen-houses yet.