What Wall Street thinks about retirement, Lachlan – The Hollywood Reporter

When a company leader retires from leadership roles at age 92, it’s usually not much of a surprise – unless the person stepping down is a media mogul named Rupert Murdoch.

After Fox Corp. and News Corp. announced on Thursday that Murdoch would step down as chief executive of both companies effective at both companies’ annual meetings in November, Wall Street analysts began analyzing the move, its timing and its impact. Son Lachlan Murdoch will continue to run both companies, which only adds fuel Succession-like speculation about how the transition will really work.

“While Rupert Murdoch is a unique global visionary, Lachlan Murdoch has led the company for five to 10 years,” said Jessica Reif Ehrlich, an analyst at Bank of America The Hollywood Reporter about the impact on Fox. “The company is uniquely positioned with a great balance sheet and a very interesting portfolio of assets. It is unlikely that the strategic direction will change any time soon.”

The BofA analyst adds: “Longer term there are a lot of options because Fox has such a strong balance sheet – so it can get bigger,” but it also has “small assets that can be easily sold.” Could Fox and News Corp merge again? Reif Ehrlich doesn’t see any real justification: “I don’t think it makes sense to merge the companies.”

Not everyone was shocked by the news, given the media giant’s age and his son’s experience at Fox and News Corp. “That’s not a big surprise,” said Siye Desta, an analyst at CFRA Research. “However, as we approach the 2024 election, we will be closely monitoring whether this leadership change impacts the value of News Corp shares. Additionally, we believe that a merger between News Corp and Fox Corp. is now more likely, which may explain why Fox Corp shares are currently trading higher than News Corp.”

Analysts outside the major Wall Street banks also assessed the impact of the move on Murdoch’s empire. “Rupert Murdoch has seemed pretty reserved in recent years,” argued Scott Robson, senior research analyst at S&P Global Market Intelligence. “Before stepping down, Rupert strategically positioned the company to compete in a challenging media landscape by selling its entertainment cable networks to Disney and focusing on news and sports. This included exiting the regional sports network business at its peak.”

The expert also noted that since March 2019, when Lachlan Murdoch became Fox’s chairman and CEO, Lachlan Murdoch has grown the company “from $10.98 billion in revenue in 2018 to $14.29 billion in 2022.” has. Much of this growth during a difficult time can be attributed to the steps Rupert took before his resignation in 2019.”

Meanwhile, Third Bridge analyst Jamie Lumley added that Rupert Murdoch’s exit “could further reduce the likelihood of Fox’s eventual reunification with News Corp,” suggesting: “We’ve heard from experts that the synergies “As evident as in previous years, and without Rupert’s commitment to it, it is difficult to see a renewed push for such a merger in the foreseeable future.”

Lumley also addressed the timing of Murdoch’s transition into a new role. “This leadership transition comes at a challenging time for Fox. After settling with Dominion Voting Systems earlier this year, the potential liability from the Smartmatic lawsuit still weighs on the company,” the analyst wrote. “Questions also remain about how Fox will approach its programming and coverage of the 2024 election cycle, a year in which there will be plenty of money for political advertising.”

Rupert Murdoch’s move “seems a bit out of the blue as he has shown no willingness to throw in the towel,” said Paolo Pescatore, analyst at PP Foresight, in an initial reaction, while emphasizing: “Undoubtedly he always will.” still be involved and does not want to withdraw completely given the media empire he has created.”

What does the change mean for his son as he takes the reins of the Murdoch empire? “Lachlan’s first task will be to make this transition as smooth and seamless as possible to ensure no instability,” the expert said. “Doesn’t matter, [Murdoch’s are] There are big shoes to fill, and that is never easy given the empire that has been created. However, [it is] Having Rupert by your side is still of the utmost importance.”

Could the mogul’s transition to chairman emeritus lead to major changes at Fox? “It is too early to tell what the future holds and it is unclear what direction the company will take under Lachlan’s leadership,” argued Pescatore. “There shouldn’t be any drastic changes in the short term as he has been heavily involved for some time. However, he will want to consolidate his own position and create his own legacy.”