News Corp's Family Feud

Today the Wall Street Journal featured a cover story on the sudden resignation of Lachlan Murdoch - Rupert Murdoch's son-in-waiting at News Corp.

The money on the table was Lachlan was likely to take over after his father leaves the earth sometime in the next 20 years. His resignation to "spend more time with his family" rings hollow to some who think that the real reason Lachlan is heading back Down Under is because there is a growing rift between the Old Man and his four eldest children.

Turns out that theory may be true. According to the Journal, there is a serious family feud brewing between Rupert's original family (4 grown children) and the new family (a thirtysomething wife with 2 young children). Apparently Rupert and his wife are changing around the family trust which is seriously diluting the inheritance (and power) the older children were said to be expecting to reap.

Apparently this spat and Rupert's constant meddling in Lachlan's affairs (he was COO of News Corp prior to his resignation) were to much for the lad. He chose to go the route of Rupert's two older daughters who have fled News Corp. Only Harvard drop-out and current bSkyb CEO James remains in the Empire. He is now the new leader in the clubhouse in the CEO sweepstakes.

Only don't be so sure. Another angle that has not been addressed is that Rupert's "publicly traded" company may end up in the hands of an outsider after he leaves. Specifically current president Peter Chernin. Rupert has said he wants his children to take over the company but only James remains (unless Rupert hangs around for another 20 years in time for either daughters Grace or Chloe - 2 and 3 respectively to take over). Another prospect - perish the thought - is that current wife Wendi Deng takes over (she was a former News Corp exec in Asia). Either way this promises to play out like one of Fox's insufferable reality shows.

Hawk's View: The Feud will be the stuff only the tabloids can love (maybe even one of Rupert's own rags will get the scoop) but investors should not fret the issue. At his heart the conservative Murdoch is a true capitalist. News Corp will not suffer a negative backlash from a family issue (unlike Cablevision). The Hawk believes in the bloke from Australia and will continue to ride his less-than-significant investment in News Corp. At $17 a share it's a bargain, family feud or not.