James Murdoch, Adrift From Fox and Disney, Plots an Independent Future
With a windfall from his family company’s $71.3 billion Disney deal, Rupert's entrepreneurial son is eyeing investments in India and may finally find freedom to take more political stances.
Even before Disney's $71.3 billion takeover of most of 21st Century Fox, James Murdoch, the now-unemployed former Fox CEO, seemed to be focused on life beyond the family business. It was clear months before the deal closing that there was no role for Murdoch at the merged company, and in March he founded investment firm Lupa Systems, leading longtime observers to ask: What does the 46-year-old son of Rupert intend to do next?
While flush with an additional $2.1 billion or so from the Disney transaction, James will undoubtedly raise funds from a few strategic partners before investing in next-generation media companies, many Wall Street observers say, though he is also expected to plow some money into environmental issues and innovations in other sectors.
"The focus in his life is building things," Enders Analysis founder Claire Enders tells THR. "He has built Sky, he has built a number of investments through to scale." And investing without any role at the family company means "he can do his own thing and express himself in his own way," she adds.
His new company's name may provide insight into his plans. Lupa is Latin for female wolf or the she-wolf that in Rome’s foundation myth sheltered and nurtured the twins Romulus and Remus after they were abandoned in the wild by a ruler. Romulus would later become the founder and first king of Rome. So, Lupa is likely to want to nurture early-stage companies.
Observers agree on what types of investments the mogul is likely to focus on. "Technology, shortform content and ad tech have been areas of interest," says a banker familiar with Murdoch's thinking. "He understands both the art and the science of the entertainment business," adds Ben Weiss, chief investment officer at 8th & Jackson Capital Management.
And "the example of Sky’s investment in Roku alone is a very good example of the fact that James is really conversant at the cutting-edge of technology," says Enders. "That’s where he is most comfortable." But it may not be all about media tech. "James is interested in pretty much any technologies. He is going to be trying to find the next Rokus, the next really successful technology businesses, including across health care, education, TV, a lot of different areas," she suggests.
"His investment focus will include digital media and perhaps emerging technologies, more broadly," echoes CFRA Research analyst Tuna Amobi. (James' onetime Harvard roommate, Jesse Angelo, a former top News Corp. executive who led the New York Post, is also familiar with the content and ad tech space and has yet to reveal his next move after exiting the company in January.)
Lupa has offices not only in Manhattan's Financial District, but also in Mumbai, India, and James Murdoch is listed on LinkedIn as founder and CEO. Former Fox deputy general counsel and deputy chief compliance officer Jeff Palker is listed as managing partner and general counsel. Nitin Kukreja, the former CEO of Star Sports, is heading the Mumbai office and told The Economic Times in March that the firm will look for opportunities where there is "an interesting interplay of content and technology going on." He added that Lupa "will be a bit diversified, for sure."
Lupa's eye on India comes as no surprise because James, when he was Fox CEO, seemed most invigorated when talking about TV giant Star India and the growing Indian market. His acumen for international businesses has long been evident; he served as CEO of Star in 2011, and as deputy COO and chairman and CEO, international, at News Corp., the precursor to 21st Century Fox. "He has been involved in India since the founding of Star. So I think the world is his oyster," says Enders.
While James has been mum on his plans, insiders say he was never interested in joining his father and brother, Lachlan, at Fox Corporation, which is made up of the assets Disney didn't buy. When word first emerged of the plans to buy much of Fox, there was talk that James could take a top position at Disney and possibly even end up in the running to succeed Disney chairman and CEO Bob Iger. On a Dec. 14, 2017, conference call, Iger even said, “James and I have had a lot of conversations about the future of these companies. … He and I will continue to discuss whether there is a role for him here or not.”
By early 2018, however, it was evident that there would be no Mickey Mouse ears for James, although people close to the situation say he lobbied hard for a top executive role. Some observers say Iger balked at the notion of any involvement at Disney from anyone named “Murdoch,” given the moniker is so closely associated with Fox News, a brand that is more polarizing in Hollywood than perhaps anywhere else in the world. “It wasn’t clear how, or where, he’d fit within the new organizational structure, absent a clear path to ultimately succeed Bob Iger — which seemed like a very remote possibility,” Amobi says.
James, a board member at Elon Musk's Tesla, never embraced the rightward tilt of Fox News, which will account for around 85 percent of the profit at Fox Corp. He also has Quadrivium, a civic foundation he runs with his wife, Kathryn. Being far from Fox Corp. could also allow him to take more political stances, such as when he criticized Trump's reaction to the August 2017 melee in Charlottesville, Virginia, that left one protester dead. Days later, he took his reaction a step further by pledging $1 million to the Anti-Defamation League.
"I would wager that he will become a skilled investor in emerging businesses that cross the worlds of Silicon Valley and Hollywood — much like Peter Chernin did," says Mary Ann Halford of OC&C Strategy Consultants, referring to the former Fox exec turned media investor. "As for James Murdoch's skills," adds Jimmy Schaeffler of the Carmel Group, "like his brother and sister, they are smart and have been schooled by the best, plus they care about the world their father has immersed them in."
Time will tell if, in his new chapter, James creates a legacy separate from his dad's. His past ventures include leaving Harvard to bankroll the launch of Rawkus Records, which signed such notable artists as Mos Def and Talib Kweli and was purchased by his father's News Corp. At least one former close associate, Walt Disney Television chairman Peter Rice, expects James to be happy as "the captain of his own ship," he told THR in 2018. "He'll get to choose what he wants to do."
A version of this story also appears in the April 11 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.