All in the Family: Rupert Murdoch Soon to Buy His Daughter’s Company

After years of cajoling, guilting and bribing, Rupert Murdoch is on the verge of accomplishing one of his oft-stated business goals: getting his daughter, Elisabeth, to work for him again.

News Corporation is reportedly in the final days of discussion about acquiring Shine Group, the independent television production company—now one of the largest in the world—42-year-old Elisabeth Murdoch founded after she left News Corp. during a spat with her father more than a decade ago.

Shine is both the producer and owner of a variety of hit shows in the U.K. and the U.S., as well as one of the most significant worldwide distributors of “formats.” Shine markets reality TV concepts that have played well in the U.K. and U.S. to television markets around the world—a Croatian version of the Biggest Losers, as it were, or a Serbian Jersey Shore. In 2008, Shine acquired Ben Silverman’s Reveille Productions, one of the leading format licensors, which produces Ugly Betty and The Office.

Shine’s business is, however, not its main attraction for News Corp. Rather, Murdoch has often described to friends and associates how vital he believes his children’s active participation is to the company. During his acquisition battle for Dow Jones, Murdoch continually contrasted the Bancroft family, which owned a controlling stake in Dow Jones, and, for generations, had had scant involvement with the company, with his own children.

Three of Murdoch’s four adult children—Elisabeth, Lachlan and James—have each had management roles within the News Corp. orbit. Indeed, each, at one point or another, was slated to be his successor.

James, who runs the European and Asian operations of the company, is now the designated heir. Lachlan, once the favored son, left the company after repeated clashes with his father. He now lives in Australia where his father expects him to eventually take over or even buy News Corp.’s vast newspaper operation. Murdoch has often speculated that the wealth that Elisabeth has built up in Shine might enable her to challenge James for the leadership position.

In some sense, the leadership role among the children hardly matters. The Murdoch Family Trust, which will ultimately control the company, has four voting members: Elisabeth, Lachlan, James and their half sister, Prudence—with no tie-breaking mechanism. In effect, the Murdoch children report to each other.

Murdoch’s two younger children, Grace and Chloe, by Wendi Deng, were admitted to economic but not political participation in the unbreakable trust after Murdoch paid several hundred million dollars to each of his older children—money Elisabeth used to grow Shine.

While the acquisition of Shine might be difficult for most public companies—with a perception of self-dealing—that is not expected to be a problem at News Corp., where Murdoch maintains firm control of his board and where shareholders are accustomed to treating the family as a special circumstance.