What James and Lachlan Murdoch Can Learn From the Warner Brothers' Sibling Betrayal

Austin Hargrave
James (left) and Lachlan Murdoch

Harry Warner had the company stolen by brother Jack, claims his granddaughter: "My grandfather had a heart attack [almost immediately afterward], and he died a couple of years later. The whole family was completely torn apart."

This story first appeared in the June 26 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

On May 14, 1956, the three surviving Warner brothers gathered for a family reunion at Perino's restaurant to toast good news: Following decades of a troubled partnership, they had agreed to unload their shares in Warner Bros., the movie studio they had founded 33 years earlier. A group of investors had offered them $22 million, and Jack, 63, the youngest sibling, who had spurned a bid weeks earlier, said he was willing to go ahead on one condition: that the brothers sell at the same time. It would be one for all, and all for one.

Two weeks later, when the deal was done, oldest brother Harry discovered that Jack secretly had arranged to buy back the stock, effectively staging a coup. They never spoke again.

"My grandfather had a heart attack [almost immediately afterward], and he died a couple of years later," Cass Warner, Harry's granddaughter, tells THR today. "The whole family was completely torn apart."

The Warner rift stands as a cautionary tale for two media princelings poised to inherit their father's mantle: James, 42, and Lachlan Murdoch, 43, who have existed in an uneasy tandem while waiting for the Lear-like Rupert, 84, to give up his throne at 21st Century Fox and News Corp. (A third sibling, Elisabeth, 46, the Cordelia in this story, remains in the wings.)

Unlike the Warners or their contemporaries Walt and Roy Disney, the Murdoch brothers are inheriting their empire, with James to take the CEO mantle and Lachlan the title of co-executive chairman. But like them — and a host of other media families caught in the nexus of the personal and professional — they must learn how to juggle power as the fate of their $70 billion empire hangs in the balance.

From left: Lachlan, James, their mother, Anna, and Rupert in 1987.

Their relationship, while fraught with bickering that has spilled into the boardroom at times, is said to have improved. "They love each other," says one agent who has spent time with them. Parsers of tea leaves will wait to see if both accompany their father to Herb Allen's Sun Valley conference in July.

CBS Corp. president and CEO Leslie Moonves says the leadership plan will work. "James is an extremely competent guy. I like him and I'm impressed by him. He'll do great." Referring to the British hacking scandal that punctured James' reputation and led him to flee London for New York, he says: "That was a terrible thing. But Rupert gave him a chance to re-invent himself, and he did. He's very technologically literate and will do exciting things."

Before that, James must define his and Lachlan's responsibilities in ways less ambiguous than their new titles might indicate. Author Neal Gabler, who has studied moguls in An Empire of Their Own: How the Jews Invented Hollywood, says the brothers should observe three simple rules.

First, there ought to be a clear division of responsibility. "You always cede to your sibling his or her territory. You have to understand the divisions and not make incursions." Second, he says, they must remember their bond: "The family always has to be united against any outside force. This is something Roy and Walt [Disney] understood for a good deal of their relationship; when there were external forces besieging the studio, they learned that their communal interests were greater than any disagreements." And third, they should stay poles apart -- which seems doable, given that James will be based in New York and Lachlan in Los Angeles. "The New York/L.A. division is traditional," notes Gabler, "with L.A. being the creative, loosey-goosey place, and New York has to impose its will on California."

The Murdochs strode into the Sun Valley conference in 2011.

Bob (left) and Harvey Weinstein in their Miramax days in 1999.

Some observers are optimistic that the Murdochs will work as well as some other brothers, most notably Bob and Harvey Weinstein, who have made joint decisions in running The Weinstein Co. while clearly having separate skills. But their company is vastly smaller than the Fox-News Corp colossus; and they built it together rather than inheriting it. "We know our strengths and weaknesses," says Bob Weinstein. "My strengths are exem­plified in the movies that I make. They are much more popcorn and commercial. I don't even pretend to think I could make the movies that Harvey makes, which are much more prestigious."

Other media companies have been rocked by family rivalries. Columbia Pictures' Harry Cohn loathed his brother Jack and launched a failed takeover attempt. The Bronfman family was at arms over Edgar Jr.'s decision to buy Universal. And Viacom and CBS executive chairman Sumner Redstone has a strained relationship with his two children, neither of whom appeared at his recent 92nd birthday party.

Even the Disneys at one point did not speak to each other for more than two years, though both brothers had offices in the same building. "Roy just felt, 'Walt's the child, Walt doesn't get it, Walt doesn't understand the business mechanism, and I've got to teach him that,' " says Gabler. "Their [battle] was only resolved when Roy handed Walt a peace pipe."

Individual ability has not always been the sole prerequisite of success in a family company (though UCLA professor Jonathan Kuntz says ultimately that's what matters most). Louis B. Mayer hired his daughter's husband, David O. Selznick, to head production at MGM, only for colleagues to quip, "the son-in-law also rises." Selznick went on to produce Gone With the Wind, while another family member, Mayer's overlooked daughter, Irene, produced the original A Streetcar Named Desire on Broadway.

From left: Harry Warner, Darryl F. Zanuck, Jack L. Warner, actor Al Jolson and Sam Warner hobnobbed in 1927.

Roy Disney captured his brother Walt playing the ukulele on a Waikiki beach in 1939.

Fox chairman Darryl F. Zanuck had greater success in teaming with his son, Richard, whom he made head of production. But after such hits as The Sound of Music, Fox stumbled, and when Darryl's position looked perilous, he fired Richard to save his own skin — a move the younger Zanuck called "an execution."

Like Darryl, one of the greatest moguls — and the man who built the company that Rupert bought in the 1980s -- the older Murdoch may cling to power for years as the company's biggest shareholder. "He's not going anywhere," says Moonves. That could complicate things for his sons, but it also might allow him to step in should things start going the way of the Warners.

After their rupture, Jack and Harry remained alienated for the rest of their lives, only to meet one last time before Harry died in 1958. The latter was in a wheelchair and unable to speak when Jack showed up uninvited at his brother's 50th wedding anniversary. When Harry saw him, says Cass, "The only thing he could do was cry."

Marisa Guthrie contributed to this report.