Much ado has been made over the peaks, valleys and general drama associated with big business -- but what happens when the business is all in the family and corruption seeps through and threatens the very fiber of its ancestral heritage?
There's certainly no better example these days than everything Murdoch. I can't think of another family business in recent memory that more aptly encapsulates this mortal coil than the one in the middle of the recent News of the World maelstrom. We're all sitting rapt at our TVs, waiting to see what will happen next in Parliament. And Michael Wolff, who opines on Adweek's website about the "Murdochalypse," was on Today talking about not only how the end of a dynasty is on Rupert's mind but also how on earth to protect his son James, the heir apparent to the throne, grossly in danger of never having the chance to lead.
Murdoch is 80 now and looks a good deal worse for wear from recent events. To all of us who work with the media, the events surrounding the phone hacking scandal are beyond shocking. The dominoes are toppling one by one, and everyone is going down -- from Scotland Yard to fiery-haired editrixes to friends and family alike. I remember well the golden era of the Murdochs in New York in the '90s. It seemed as if they'd never lose their place at the highest echelon of power, but now I'm wondering if their tables at the Ivy, or any other media hot spot for lunch on the globe, will remain intact. And they've hardly begun investigating stateside... (And as the AP said, "Protecting News Corp.'s U.S. franchise is crucial because it includes the company's crown jewels -- the 20th Century Fox movie studio and television holdings that include highly profitable cable networks and 27 broadcast stations. Movies, broadcast television and cable television account for nearly 60 percent of News Corp.'s revenue and an even higher proportion of the company's earnings." Will advertisers jump ship, and will movie fans put Fox films on notice?)
To say this insanity has further fractured the newspaper business would be an understatement. If you look at family businesses through history -- there has always been the whiff (or tornado) of deceit and power gone awry -- think of the Guccis, the Kochs in New York and even the Borgias back in the 15th century as primers on how not to conduct business or personal affairs.
But what's really interesting to me, and what has always been interesting about the Murdochs, is power shift among his children Elisabeth, Lachlan and James. If you are like me, you have no doubt read the countless profiles on all three (although that doesn't mean we know what has really gone on). At one time, Lachlan was the heir apparent, then Elisabeth and now James, even though he's the youngest. But isn't it fascinating how Elisabeth, long out of the fray, has suddenly emerged as the strong one? It's interesting how in traditional family businesses, the boys are groomed to take the wheel; perhaps as we continue to redefine the role of women at work, we can look forward to seeing more women running the family business? (In fashion, it's common: Think Donatella Versace or the Fendi sisters.) And lest you think Elisabeth does not have the right stuff, think again -- she's got the entrepreneurial and big-business chops to run an empire. She ran BSkyB, then had the stones to go out on her own as a film and television producer, with great success. So it's a bit of a no-brainer when it comes to who should succeed Rupert, as James becomes less and less likely a successor. He's damaged goods, after all.
And, of course, there's data to back up the trend of women-run family businesses on the rise. On the National Association of Women Business Owners site, a report from MassMutual Financial Group and the Raymond Institute American Family Business Survey says woman-owned family businesses had increased by 37 percent from 1996 to 2001. "According to the study," the site says, "these are substantial businesses, with $26.9 million in average annual revenues, and some reporting as much as $1 billion in sales." The report added that women-owned businesses are "more likely to focus on succession planning, to have a 40 percent lower rate of family-member attrition, to be more fiscally conservative and to carry less debt than male-owned businesses."
So, fathers and business titans, take heed of your daughters and don't be dismissive of their ability to take the lead. And though we've already seen one woman go down by way of Murdochgate, look for all eyes to be on the 42-year-old Elisabeth, though it's going to take more than some good old-fashioned female know-how and smarts to save this flailing family business. (First daughter Prudence has not been identified as an option yet still works within the family business.) As John Mayer said, "Fathers, be good to your daughters." You never know when you might need them to save the day -- or, better yet, the empire.
At press time, Elisabeth Murdoch was out of town while her family pled their case before Parliament, and now Dad is heading across the pond to face shareholder lawsuits and try to survive the rumors of decreased ad spends and a downgrade by Standard & Poor's. Have a nice holiday, Elisabeth. You'll need it.