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00:08Welcome, one and all, ladies and gentlemen, to The Late Show.
00:10I'm your host, Stephen Colbert.
00:13About two hours ago, Fox News settled their defamation suit
00:18with Dominion Voting Systems.
00:20Damn it!
00:21I wanted to see Rupert Murdoch put his hand on the Bible
00:24and burst into flames!
00:312023 was one of the worst years in Rupert's entire career.
00:36Fox News settled a lawsuit with the Dominion Voting Machine Company
00:42for almost a billion dollars.
00:45Fox was already strapped for cash.
00:47Tucker Carlson can only afford one facial expression.
00:50Dominion had accused Fox News of knowingly pushing false conspiracy theories
00:54about what former President Trump had claimed were rigged voting machines.
00:57So Fox knew this was all BS, and yet they were hyping it to their viewers anyway.
01:04During the 2020 presidential race, Fox hosts gave airtime to conspiracy theories
01:09about a stolen election.
01:11These fraudulent ballots will just be counted again.
01:14Fox News is trying to tell their bullshit that Trump really won the election.
01:18The machine ran an algorithm that shaved votes from Trump and awarded them to Biden.
01:23The judge ruled that everything Fox aired about Dominion and its voting machines
01:28in the 2020 election was false.
01:32Their decision to buy into the big lie created a credibility problem for the company
01:37and for shareholders.
01:39So there are tensions within the Murdoch family.
01:42Liz, James, and Prue are concerned about the direction of the company under Lachlan
01:49because this Dominion Voting settlement happened under his leadership.
01:54At Fox News, there has always been a push to the right.
01:59But now, this is an existential matter for the family.
02:03An enormous amount is at stake.
02:05I mean, this is the most powerful media empire in the world.
02:10And it begins to provoke a conversation among the children about,
02:15well, what is going to happen when Rupert dies?
02:17Where do we go from here?
02:18What will happen with the companies?
02:23So James is passing through London, and he reaches out to Liz and Prue to meet with them.
02:30It's worth acknowledging Lachlan is not invited.
02:36James reserves a private room inside the Claridge Hotel in London.
02:41And that meeting becomes a source of a lot of debate and a lot of controversy.
02:49Because as this is all unspooling, there's this article in the Financial Times
02:54that really sets Lachlan off.
02:57There's a quote from a source close to James that says, basically,
03:00when Rupert dies, Lachlan's out.
03:04Of course, that fuels Lachlan's paranoia.
03:07Who is going to succeed waiting in the way?
03:09The chatter that James will affect a coup with his sisters was, in Lachlan's ears, deafening.
03:17The clear indication is, if James were to somehow affect a coup,
03:22he would change the direction of Fox and would take it to the left.
03:27And that's all very much in the air as this meeting happens.
03:33So at Claridge's, Liz, James, and Prue are definitely venting about Lachlan,
03:38but all say that they didn't talk about getting rid of him.
03:42The most memorable thing about it is Liz has a beer.
03:46But afterward, Prue gets an alarming text from Lachlan, asking her to call him.
03:54Prue is beside herself.
03:57Maybe he's found out about their meeting.
03:59She doesn't know what to say.
04:01And she writes to Liz,
04:04Lachlan trying to reach me.
04:06And she does a kind of exploding head emoji.
04:12But, as it turns out, he was reaching out to tell her about some changes at one of the company's
04:19boards.
04:20So it was actually pretty innocuous.
04:23But still, Lachlan's very unhappy.
04:26He's constantly reminding his dad or pointing out to his dad,
04:29look, look, look.
04:30They're planning a coup.
04:32Rupert spent his entire lifetime building Fox News and the rest of the conservative empire.
04:38So he sees it as his legacy.
04:42And there is only one of his children that Rupert trusts
04:47with the Murdoch media empire operating in the interests of conservative politics.
04:53He knows Lachlan will act as an instrument of his will, even posthumously.
04:58So Rupert and Lachlan decide, we've got to figure this out.
05:02And thus begins an aggressive plot to take control of the empire once and for all.
05:26Rupert always portrays himself as someone who came from nothing,
05:30who built his empire out of nothing.
05:33But he grew up in a house that had 30 rooms.
05:36It had a tower, four acres of gardens, a ballroom.
05:42They had ten servants.
05:44So Rupert wasn't just born with a silver spoon in his mouth.
05:47He had a whole set of gold cutlery.
05:52His father, Keith Murdoch, was the most powerful newspaper man in Australia
05:56with one of the top-selling tabloids in Melbourne.
06:00And Rupert grew up wanting to emulate his father.
06:04The way that his father made money was through a populist messaging apparatus.
06:11He pioneers this modern tabloid journalism in Australia.
06:14Snappy headlines, competitions, sport and crime.
06:19He was also a kingmaker in his day.
06:22He was able to seat and unseat prime ministers.
06:26Rupert's born in 1931.
06:29He's the second child.
06:30The first is a girl.
06:32Two more girls come after him.
06:33Rupert, as the boy, was naturally the one that his father looked to to succeed him.
06:38But he was not great at sports.
06:41He was not particularly focused in school.
06:44His headmaster said he was the most unpleasant, most difficult pupil he'd ever taught.
06:51He was rebellious, arrogant, didn't like authority.
06:56So he's a guy who's got a lot of privilege about him, and he behaves like that.
07:03Keith had sent him to Oxford to rub shoulders with future influences and make something of himself.
07:09And instead Rupert was driving fast, gambling, drinking, smoking, having a great time.
07:18So Keith Murdoch was not convinced that Rupert was a good representation of what the Murdoch family name should embody.
07:30I was sleeping in one Sunday morning in my flat box.
07:34But when my tutor came in and woke me up and told me that my father had died, any memory
07:39I really have of it is one of complete shock.
07:43Rupert's father died rather abruptly.
07:47In his will, Keith Murdoch said that he hoped for his only son, Keith Rupert Murdoch, to have a useful,
07:56altruistic, and full life in newspapering and broadcasting, which is quite a charge.
08:02I was burdened with this anxiety for Rupert, who was so very young, and I did long to be able
08:13to help Rupert to prove worthy of his father.
08:20From Elizabeth's perspective, she's got this 21-year-old son who's totally unproven when it comes to being a journalist,
08:27let alone running a media empire.
08:29And so after the funeral, Keith Murdoch's former colleagues take control.
08:34The executors of his estate talked to Dame Elizabeth into selling the bulk of the media business that Keith had
08:41built up.
08:42Rupert is outraged.
08:44He believes that the people that used to work for his father have now betrayed him, and his inheritance has
08:50been stolen out from under him.
08:52Rupert carried this with him for his entire life.
08:55Not a chip, but a boulder on his shoulder.
08:57And he spends the next 45 years getting even.
09:09People always ask, what drives Rupert?
09:12Everyone thinks that it's money, but it's really the game.
09:16By the mid-90s, Rupert was on a winning streak.
09:20The Murdoch empire is sprawling.
09:23It's in the US, UK and Australia.
09:26He has 20th Century Fox, movie studios, television.
09:32His enormous communications empire includes everything from satellite companies to some of the biggest newspapers in the world.
09:39Forbes magazine estimates his fortune to be worth $4 billion.
09:43Rupert Murdoch had already acquired a villainous reputation for his down-market tabloids and conservative politics.
09:53Our company is a reflection of my thinking, my character, and my values.
09:58His guiding light was poking whoever he viewed as the establishment.
10:04When it's going well, push it.
10:101996 is the most important year in Rupert Murdoch's career.
10:16And it's important for two words, Fox News.
10:20As you know, Fox has had a phenomenal growth in the last few years, and now we have to move
10:24to making ourselves the best in news programming.
10:29Rupert saw a real business opportunity.
10:32Good morning and welcome to MSNBC.
10:34He saw all of the news operations fighting for the same left-of-center audience, and there's no real conservative
10:41voice in the news.
10:43Murdoch is bowing to offer an alternative to what he claims is a liberal bias in the media.
10:48Recognizing an audience that isn't being catered to, and speaking to them directly, this is the model for the Murdoch
10:54media empire.
10:56So, Rupert launched Fox News.
10:58We've been very lucky in being able to obtain the services of Mr. Roger Ailes.
11:06I'd like to thank Mr. Murdoch for the kind words. Thank you all for coming this morning.
11:10Rupert Murdoch, Roger Ailes was deep into conservative politics.
11:14We'd like to restore objectivity where we find it lacking, and we just expect to do fine, balanced journalism.
11:24Roger Ailes is one of the smartest people I've met. Smartest, canny. It's like talking to Satan. Like, Satan's smart.
11:33Depends who you are, how you describe the relationship between Roger Ailes and Rupert Murdoch.
11:40They are either supervillains that came together to dominate the world, or they are mutual geniuses who recognize market value.
11:51Considering his choice of Ailes, and that his conservative fingerprints are smudged all over his newspapers,
11:57many analysts wonder if he will use the TV news channel to spread his gospel.
12:02How did it happen? How did television news become so predictable, and in some cases, so boring?
12:08Well, we're going to try to be different.
12:12We launched in the fall of 1996.
12:14The debut of the Fox News Channel.
12:15We were sort of outcasts, like pirates, and being part of that sort of outsider, anti-establishment crusade was fun.
12:23Chandra Levy was killed by an acquaintance who wanted to...
12:25But one of my fellow editors at CNN said,
12:27Be careful. Ailes does not have the best reputation.
12:31He has this pugnacious sort of style, so he was known as a ruthless character.
12:36The Fox News Channel was Roger's fiefdom. He had a lot of latitude and unilateral control.
12:45But he followed the playbook of the other Murdoch media properties.
12:49It was taking the ethos of the New York Post and bringing it to a vibrant television screen.
12:55Whether it was an American flag or splashy graphics, there's something to look at.
13:01Ding! Fox News alert. Ding! Over and over and over.
13:08They believed that you had to grab the audience, the viewer, visually first.
13:15Fox hired people who were good-looking.
13:18More makeup, more hairspray, shorter skirts, and higher heels.
13:24Roger Ailes came up with the idea of a translucent desk, because he wanted the audience to be able to
13:29see the legs of his female anchors.
13:31Ailes got rid of valedictorians.
13:33Ailes wanted an image that you would stop on. And, you know, I don't think he was wrong.
13:41They realized that what the American public wanted almost more than anything else was an attractive young woman with the
13:49opinions of an old man.
13:52And just as Ailes and Rupert Murdoch are launching Fox, a story on the national stage breaks through.
14:01The president's on trial.
14:03The impeachment trial of President Clinton.
14:05Bill Clinton strung us all along.
14:07It's Bill Clinton's alleged affair with Monica Lewinsky. And it's catnip for Fox News' viewers.
14:15CBS News has uncovered new pictures.
14:17Now, everybody was covering that story, but no one was covering it with the same kind of glee that Fox
14:24was.
14:24This is a very good day for a number of lawyers involved in the Monica Lewinsky investigation.
14:28We're hitting a sitting president. We're hitting him hard.
14:31He definitely lied.
14:33We were encouraged to play by a different set of rules, to go all in on a scandalous tabloid kind
14:39of story.
14:39Monica Lewinsky's chance to turn the table down to a trip.
14:41Without the kind of careful journalistic balance that had proceeded years before.
14:45The Lewinsky case challenges all of us. You and I, the American people, will have to render the final verdict.
14:53That's really when Fox News Channel found its voice and the ratings spiked.
15:00Tonight, it's worth pointing out that the Fox News Channel has succeeded against all odds.
15:05It's hard to imagine that they could have launched with as much of a bang if they didn't have that
15:10story to chew on every single night.
15:13Fox News established that you can make a ton of money and get a huge audience, not by doing straight
15:18news, but by giving people what they want to hear.
15:21For all you kids watching at home, Santa just is white. You know, I mean, Jesus was a white man,
15:27too.
15:28They took this populist tendency and put it on steroids.
15:32Mexico has announced it will provide up to 200,000 survival kits to those planning to illegally cross the border
15:40into the U.S.
15:41Rupert said it was like picking money off the street.
15:45He was shameless about it, proud of it, and with good reason.
15:50It made him phenomenally wealthy and powerful.
15:56Rupert made very clear early on that he wanted this huge multinational conglomerate, publicly traded, wildly successful media company to
16:08be a family business.
16:10We always talk as a family together about business.
16:13And, of course, that today is still the case.
16:16So I talk with my sister and my brother and my dad about business on almost a daily basis.
16:24We are all given wonderful opportunities.
16:27We've also been very much aware of the fact that there's pretty serious expectation if you're given that kind of
16:34opportunity that you better prove what you're doing.
16:35As they talk about it within the family, he wasn't raising children.
16:39He was raising possible successors.
16:42And it created this rivalry among the kids.
16:45It's like he's throwing blood into the water and letting them fight it out.
16:50I think my drive comes from the same place that my dad's does.
16:56There's obviously a sense of competitive drive, and there's a sense of real ambition.
17:04In the late 1990s, Elizabeth goes to work for her father at Sky, the major British satellite TV conglomerate.
17:14Rupert really installed very tough people there.
17:18It was, like, macho and nasty and belligerent.
17:24What I heard from people who worked with Liz is that she's like her dad.
17:29She's a very ideas-oriented person.
17:33Elizabeth has a creative eye that neither of her brothers really possess.
17:38If we were talking about what her big contribution to the company is, it's that she spotted, I think it
17:43was called Pop Idol in the UK,
17:45and said to dad, I think that we need this show.
17:49America has made their decision.
17:51And they renamed it American Idol.
17:53Kelly Clarkson.
17:56It was transformative for Fox.
18:00People, they're impressed by her.
18:02She has shown that she can build and run TV stations.
18:06I think she thought that one day she might be the CEO of Sky.
18:10I think dad thought otherwise.
18:12Perhaps because she was a woman, it wasn't enough.
18:15He treats her as disrespectfully and as sexist a manner as you could expect that a person of his generation
18:22might do.
18:23She's a young mother with two kids.
18:25And Rupert makes these sexist, undermining comments about her having children and how she needs to figure out what she
18:32wants to do with her life.
18:35She feels she's not been given a chance.
18:38And so she faxes a resignation letter to her father.
18:43It's a classic Murdoch move.
18:46And her father respects that.
18:48I think he was a little surprised that I decided to leave.
18:52But I think also great pride.
18:54I think he got it.
18:57She starts her own production company called Shine.
19:00She's not given up her ambitions by any means to play a part in the company.
19:05But we'll have to see how things settle down in her own career.
19:10There were always rumors in the company that Liz was the dark horse candidate to become Rupert's successor.
19:19And she was playing the long game that by building her own successful company outside of the Murdoch umbrella, that
19:27one day she would come back and kill her brothers.
19:32Good morning everybody.
19:3525-year-old Lachlan Murdoch is taking over control of his father's Australian operations.
19:41By the mid to late 90s, Lachlan is in charge of the whole of the Australian empire.
19:46He's a bit of a rock star.
19:48But he's not a journalist.
19:50He's not a businessman.
19:51He's not got an MBA.
19:52There seems to be a lot of focus on who will be Rupert Murdoch's successor.
19:57Do you think that could be you of the four children?
19:59Oh, I can't think that far ahead.
20:02I'll do the best job I can and we'll see what happens.
20:05I'm very pleased about it.
20:06It'll be a test.
20:08He's not incredibly highly regarded, but he's got good people around him.
20:13And those good people know that if they want to get in the organization, they need to help Lachlan because
20:18Rupert is looking.
20:20They're Australia's glamorous golden couple.
20:23Lachlan Murdoch, heir to a media fortune, and Sarah, a successful model, TV presenter, and all-round great Aussie girl.
20:35Fit enough to marry a supermodel, Lachlan Murdoch started his wedding day with a morning run.
20:41Murdoch, looking forward to the day?
20:42Absolutely.
20:45The Murdoch clan has gathered at the family's property near Yess for what's been labelled the wedding of the year.
20:52He's married the supermodel Sarah O'Hare, and he started a family.
20:57He's fabulously rich.
21:00They are like royalty.
21:02He loves it there. He loves the lifestyle.
21:06He feels like he is at home.
21:09But if he's to be the successor, it's clear that Lachlan has to come where the center of gravity is
21:16for News Corporation.
21:17And that's in America.
21:19Goodbye, Network 10 Australia, and hello, New York.
21:24Lachlan and his family moves to New York, and he becomes an executive at News Corporation.
21:32He was clearly the favourite.
21:3425 cents for the New York Post.
21:37He was learning the ways of the New York Post and the newspaper business, which was what Rupert cared about
21:44most.
21:45And he was the oldest son.
21:47Lachlan, from the very beginning, really, is the one who's being groomed and the one who's being given the easiest
21:53run.
21:54And Rupert is describing Lachlan as the first among equals.
21:59That doesn't go down too well with James.
22:03James was running an independent hip-hop label called Ruckus Records with his friends.
22:09They actually discovered some of the emerging hip-hop talent in Brooklyn.
22:14Moe's deaf.
22:16And they worked with Eminem at one point.
22:20I think James wanted to think of himself as someone who was going to chart his own course.
22:26And he resisted Rupert's efforts to put him to work in the family business.
22:31But there was this gravitational pull from Rupert to get James back into his orbit.
22:41Rupert decided to buy Ruckus Records.
22:45I don't think Rupert particularly cared for the emerging hip-hop scene.
22:51But buying the label was an easy way for him to force his son's hand and get him into the
22:58company.
22:59Also, James had grown up believing that the Murdoch media empire was the center of the universe.
23:08So, when his dad said, I want you to come work for me, son.
23:12I'm gonna trust you with this.
23:14It meant a lot.
23:18Rupert manages to put him in a suit and a tie and get his hair cut and, you know, bring
23:22him into line.
23:25James goes over to work for Star TV in Asia.
23:31James is 27 years old at this point.
23:34He's had really no meaningful corporate experience.
23:37People at News Corp thought it was a suicide mission.
23:41There was no reason to believe that a green 27-year-old could go to Hong Kong
23:48and turn around a company that had lost, I think, in recent years $100 million.
23:54But James, I think, was excited by the challenge, excited that his dad seemed to trust him
24:00and earnestly went out there believing that he could do big things there.
24:08James was going to have to show that he could play his father's game.
24:11He needed to prove it to his father, but also to the world.
24:14That meant compromising on some things.
24:16There were political protests today on the issue of human rights.
24:20James is very willing to look the other way when it comes to human rights abuses in China.
24:28Murdoch pulled out of publishing the memoirs of Chris Patton, the former governor of Hong Kong,
24:32and critic of the Chinese government.
24:36They made him eat shit.
24:38They made him give speeches about how you had to respect other countries' ways of doing things,
24:43and democracy wasn't always the answer.
24:47The press doesn't need to talk down to people.
24:49The press doesn't need to educate.
24:51The press is just a tool.
24:52He wants to own the identity of being a Murdoch and being a kind of ruthless businessman.
24:59In his early assignments, he was really eager to prove himself to his dad
25:05and to be seen as a good soldier.
25:09So James spearheaded these efforts.
25:13And for a while, it looks like it will work.
25:17But China is a graveyard for a lot of Western businesses.
25:23The Chinese Communist Party, they just played him along.
25:27It all wound up not doing anything for him other than wasting time and money.
25:35He is unsuccessful in opening up China to the degree that they had hoped.
25:42But James has always had a pretty high opinion of himself.
25:44And I think he was incredibly competitive with Lachlan, and so I don't think he ever gave up.
25:49James, welcome to Mark the Talk.
25:51Thank you so much, Shaker. It's great to be here.
25:52He pivots the growth strategy to India, where he develops a big new slate of programming, including an Indian version
26:02of Who Wants to Be a Millionaire, which becomes a national sensation.
26:05And best of luck to you, Naveel.
26:06He also sees a lot of organizational mismanagement and chaos.
26:13James had to instill a professional corporate culture.
26:18And he, by all accounts, succeeded.
26:21Within, I think, two years of his time, Starr turned a profit in Asia.
26:27James actually remembers coming back for a board meeting one day and having one of the directors pull him aside
26:34and say, I didn't think you had it in you. Congrats.
26:41At the time, both James and Lachlan were on the board for News Corp.
26:45And when they would get in the room at these board meetings, it was an opportunity for both of them
26:51to perform for their father.
26:54And I think maybe implicitly to compete with each other in front of their father.
27:01James would come in challenging every point that Lachlan made.
27:06They were bickering a lot.
27:09And some people who remember those moments will say that they felt bad for Lachlan and that it was awkward
27:16for everyone involved.
27:18But the fact that James was succeeding started a lot of speculation inside the News Corp headquarters about whether James
27:27would actually overtake his older brother to become the successor.
27:34Lachlan, meanwhile, has been laboring in the claustrophobic confines of the New York News Corp headquarters working at Fox News.
27:47He's thought of as quite lazy by some people, as quite arrogant by some people, as quite pleased at himself
27:53by some people.
27:54Now, that may be unfair, but it's a recurrent story that you get.
28:01But his words carried a certain amount of weight, maybe a disproportionate amount of weight, because he was the boss's
28:08son.
28:09And there were certain people in the company, like Roger Ailes, who really resented how much respect Lachlan commanded.
28:19The impression at Fox at the time was that they were babysitting, and they did not like that.
28:29So Lachlan knew that he had to prove himself at a pretty significant moment for Fox News.
28:40An incredible plane crash into the World Trade Center here at the lower tip of Manhattan.
28:46Another plane just flew into the second tower.
28:519-11 and a terrorist attack on the United States was a perfect moment for Fox.
28:57They were taking advantage of a broad fear in the American public and harnessing it and running with it.
29:07Roger Ailes personally had an anti-Muslim bias, and that attitude showed up quite vividly on air.
29:16Palestinians dancing in the street. How did that make you feel?
29:19That was the drum that we beat every day, all day.
29:24In the days after 9-11, there was a panic about anthrax being sent around to various government offices and
29:33media businesses.
29:34As all Americans know, recent weeks have brought a second wave of terrorist attacks upon our country.
29:40Deadly anthrax spores sent through the US mail.
29:43In just a week's time, we have had four confirmed cases of anthrax, all with media connections.
29:51America has always stood for human freedom.
29:54So amid this environment where everyone is on high alert, the yearly Al Smith dinner hosts Roger Ailes.
30:04That also happens to be the night when they learn that an envelope full of white powder has been sent
30:11to the Fox office.
30:13The FBI comes in. They identify that it is anthrax. They close off the newsroom.
30:21Lachlan is managing it under advisement from the FBI as a kind of workplace incident.
30:28Ailes is losing his mind. He's, we're under attack. We're under attack. He's freaking out.
30:33Ailes wants to go nuclear.
30:35He's thinking this is big news. And directly against the advice of the FBI, he goes public.
30:43Fox News is under attack.
30:45Anthrax spores mailed to this building where Fox News Channel sits.
30:51Lachlan finds out about this, storms downstairs to confront Ailes directly. What are you doing?
30:58Lachlan tries to calm Ailes down, but they end up verbally fighting in front of a huge number of people
31:07in the office.
31:08This is not done to Roger Ailes.
31:11He was probably the only person inside News Corporation that even Rupert was scared of.
31:17Roger Ailes lets Rupert have it.
31:20I am not going to be lectured by your children. He's furious.
31:24And in the end, Rupert backs Roger over Lachlan.
31:31Ultimately, he'll give Ailes a brand new contract.
31:36So Rupert basically sent the message to Lachlan that you're not to cross Ailes.
31:42Your second fiddle here.
31:45Lachlan is incredibly frustrated, incredibly insulted by all of it.
31:51And also is starting to realize that even though he's supposed to be the heir apparent, that his dad has
31:57no interest in retiring anytime soon.
32:07How does having a young family again affect your views on retirement? Your own retirement, that is.
32:14Oh, it delays it forever.
32:17At this point, Rupert and his third wife, Wendy Dang Murdock, have two daughters, Grace and Chloe.
32:25The other children were never big fans of Wendy Dang. They were skeptical of her.
32:33And James and Lachlan saw Wendy as being tough on their dad, but Wendy wanted him to keep up with
32:43her.
32:46Wendy has him under a sort of regimen.
32:50He is on a strict diet of green juice and he's not allowed to have dessert.
32:56He undergoes his makeover. He dyes his hair red. He starts wearing a leather jacket.
33:03Rupert goes from the Upper East Side established stodginess to downtown hip.
33:09It's like the fountain of youth for Rupert.
33:11And unlike Anna, who didn't want anything to do with the business, Wendy wanted to know what was going on
33:18in the company and was very interested in it.
33:21Wendy went everywhere with him and she's becoming also an advisor to the company.
33:27She was very ambitious and she had a lot of hopes for her two daughters.
33:33She says that she wants her own children to have the same standing as Rupert's other children.
33:40Where does that stand today? Succession.
33:43Well, the two little girls are too young to consider this at the moment.
33:46Do you consider them, you know, you have said they're all my children.
33:49They'll get treated equally financially.
33:51He goes on Charlie Rose and that is how his own children learn that he is slicing up the trust
34:00and giving his two youngest children an equal stake in the inheritance.
34:06Each of the four elder children got paid $150 million for agreeing to include Grace and Chloe on the Murder
34:14Family Trust.
34:15So Rupert's six kids have an equal financial stake, but only their four eldest kids have a vote.
34:21You ran into some buzzsaw within the family because of that decision?
34:25We've resolved everything very happily.
34:28In fact, it sets off a bomb with the other kids.
34:32But he doesn't apologize for this and runs roughshod over their feelings and their desires.
34:40We've seen this his entire life.
34:42When Rupert wants something, he will stop at nothing to get it.
34:49Often the Murdoch family, they would come together for Christmas or Thanksgiving on Rupert's super yacht called Morning Glory.
35:00James had been married to his wife, Catherine, for a while.
35:04And Catherine remembers these legendary games of family monopoly that the Murdochs would play.
35:12Once she caught Rupert cheating and called him out on it and he just kind of smirked and shrugged.
35:21Apparently this was a common feature of their family monopoly games.
35:26And that sort of tells you everything you need to know about him.
35:31So after the changes to the trust, the family is divided.
35:36There's a lot of tension.
35:38And especially with Rupert's favorite successor, Lachlan.
35:44I think there are a lot of things going on in Lachlan's head at that point.
35:47And he was still feuding with Roger Ailes.
35:51Ailes wants to get Fox Television to back a new series called Crime Line, hosted by Geraldo Rivera.
36:00Lachlan says it's too expensive and he blocks it.
36:05Roger goes directly to Rupert.
36:07Rupert reassures him and says, don't worry about the boy.
36:13Don't worry about the boy. Do the show.
36:15It was a classic Murdoch moment. Business over family.
36:20Lachlan was in the air on his way back to America from Australia.
36:24And found out about it when he landed.
36:29He felt betrayed.
36:32Rupert had backed Roger over him. Again.
36:38Lachlan had tried to be the good son and the loyal deputy.
36:43But every time he tried to make a decision that one of the other executives didn't like,
36:49they would just go over his head to Rupert.
36:51And Rupert would often overrule Lachlan.
36:53So I think for Lachlan, the proximity to his dad ended up being bad for his place in the succession
37:02race.
37:03There was some surprise news out of Rupert Murdoch's News Corp overnight, with his eldest son Lachlan quitting his job
37:09as an executive.
37:10Lachlan Murdoch will remain on the News Corporation board, but plans to return home to Australia and pursue an independent
37:17career.
37:17So now, Liz and Prudence were out of the running to be heir apparent.
37:23And after Lachlan resigns in a huff, moves back to Australia,
37:30James is the only viable successor left.
37:37James Murdoch has been given a much larger role overseeing all of News Corp's European and Asian operations.
37:4330-year-old James Murdoch was appointed the new CEO of Sky two weeks ago.
37:48Everyone wants to see the value of the company grow, and that's what we're going to work to do.
37:51James' promotion was pretty controversial.
37:56There were howls of nepotism and outrage that Rupert's relatively young son was going to be entrusted with this crown
38:04jewel of British broadcasting.
38:08On top of the fact that this was the job that Liz had been after.
38:15I'll tell you that James, I met with him in London, he was so arrogant.
38:20Master of the universe kind of vibe.
38:23At this point, even though he hasn't gone to business school, he starts talking like he went to business school.
38:29The abolition of media boundaries is a trumpet call to expansion, to do more.
38:38James starts to affect a public persona that a lot of people around him suspected was modeled after Rupert.
38:46He encourages all of his employees to call themselves pirates.
38:50So in his London office, he has a life-size statue of Darth Vader and talks about them running the
38:59Death Star.
39:01He is a good ambassador for his father, and he's also making the case that I can be the brash
39:07disruptor.
39:07I can be the bold new force, just as you once were.
39:13The irony is that the more he seemed to act like Rupert, the more Rupert felt alienated by James.
39:23But also we look forward to the government's input.
39:26James begins to cultivate his own inner circle.
39:29He starts dining with prime ministers and cozying up to the liberal, respectable establishment.
39:36He wanted to modernize and run this company by what he considered to be the best practices and standards.
39:44So he was going to fire the more toxic executives and employees and emphasize human resources and start to listen
39:53to the lawyers more.
39:54All of this really rubbed Rupert the wrong way.
39:59He was really suspicious of James trying to cozy up to the establishment.
40:05It kind of makes Rupert regret that he doesn't have Lachlan around.
40:14After being forced out by Roger Ailes, Lachlan is in Australia with his tail between his legs.
40:21He was still on the news corporation board.
40:24The profit motive is not only fundamental to our ability to reward shareholders.
40:27But he was doing his own thing, looking to make big investments for the company.
40:31He was kind of humiliated, but he still wants to emulate his father.
40:36The question is, how good a businessman is Lachlan?
40:40One of the things that's powering newspapers at the time is classified ads.
40:44But it's quite clear that the newspapers are fading and the internet is going to take all the advertising revenue
40:49and real estate ads in particular.
40:53So Lachlan says we need to get a share of that.
40:57And so when realestate.com comes along, he buys it.
41:01This is clearly a great deal.
41:04And it's a great deal for everyone involved.
41:06It's win-win-win.
41:08The decision to invest in realestate.com.au makes the family billions of dollars.
41:14And it becomes the most valuable property in the News Corp business in Australia.
41:19I think they only paid $10 million. It's now worth more than a billion.
41:24By taking himself out of the running and moving back to Australia to set up his own shop and start
41:29building his own little media empire,
41:33Lachlan becomes more desirable to his father as a successor.
41:38I think that his dad kind of wants what he can't have.
41:42Mr. Murdoch, the market's wondering about your succession.
41:45You said this week that virtually you'll die in the saddle, but you obviously have to think of it.
41:50It would be very nice. It's every father's natural desire to see, I think, his children follow him if they're
41:56up to it.
41:57And we'll have to see how they work it out. I hope not fight it out, but I hope he'll
42:02be around for a few more years.
42:07Rupert is not a person who likes to talk about his death.
42:12But now he's 94 years old, and he's clearly preparing for one day when he eventually passes.
42:21At this point, Liz, James, and Prue share concerns about the direction of the company.
42:28Good morning, Mr. Murdoch!
42:30Rupert sees Fox as his legacy.
42:33And he's convinced that Lachlan is the only one that will carry on what he built.
42:39At the same time, Lachlan's looking over his shoulder, worried that after his father dies, there could be a coup
42:46and he could be pushed aside.
42:49So Rupert and Lachlan start looking into the Murdoch family trust.
42:53If Rupert doesn't get the trust built around Lachlan, it's over.
42:58They want to figure out, is there a way to poke a hole in this trust?
43:04And what they find is there actually is a way, as long as it was solely for the benefit of
43:10all of the heirs.
43:11The simplest way to understand it is the trust had eight votes, four controlled by Rupert, one controlled by each
43:21child.
43:22So Rupert could never be outvoted, but no child could be in control when Rupert died.
43:27So Rupert and Lachlan want to create two new entities that will control the trust.
43:34And those entities will be able to override the one that exists currently.
43:39They're keeping it secret from all the other children.
43:43And they are going to do it under a crazy code name, Project Family Harmony.
43:49You have named your plan to take the voting rights of three children away from them, Project Family Harmony.
43:57I mean, just mind blowing.
44:02There was a period of a few weeks and then James got an invitation to join a Zoom call for
44:10a special meeting on the family trust.
44:14He did not know what this meeting would be about.
44:17He had no reason to believe there was any need to meet about the family trust.
44:23James was completely blindsided by this.
44:27Then his managing director received an agenda.
44:31He called James and said, you need to look at this.
44:37Your dad is making a move for the entire empire.
44:41About a week after that, the Murdoch family get on the Zoom.
44:48There's a lot of tension in the room.
44:50You have James and his two sisters, Prudence and Liz,
44:54and his older brother, Lachlan.
44:57And you have Rupert surrounded by a hundred lawyers.
45:03He starts just kind of robotically reading from this script.
45:07He tells them, I'm going to change the family trust.
45:10You'll still have your shares, but you'll have no voting power.
45:14You'll have no ability to make decisions.
45:21It's just going to be Lachlan who has control.
45:25So the meeting does not go particularly well.
45:27There's shouting. There's yelling.
45:30It became very emotional.
45:32James can't believe his father is saying this.
45:35That he was willing to do something so provocative and so harmful.
45:41This is what had become of his family.
45:45Rupert says, you would come in.
45:47You would change this company.
45:49You would take it to the left.
45:51That's the golden goose you're playing with.
45:53You need to go along with this.
45:55It's good for all of you in spite of yourselves.
45:57What's notable is that Lachlan is silent.
46:01When of course he had helped architect the whole thing.
46:05Liz can't contain herself.
46:07She says, how are you going to get consensus with a gun to our heads?
46:11It was brutal.
46:14It's total war.
46:37It was brutal.
46:40It was brutal.
46:41It's brutal.
46:42It's brutal.
46:43It's brutal.
46:46It's brutal.
46:51There you are.
46:51It was brutal.
46:52It was brutal.
46:55You ochre is pretty low.
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