Investors ponder life after Rupert

Rupert Murdoch

After letting the press see round their lovely London flat, Rupert and Wendi Murdoch have now been showing off their pad in Manhattan - albeit the one they are selling to buy one with more wardrobe space.

In between trading flats and snapping up internet companies, it must feel like the late 1990s chez Murdoch. Favoured son James is said to be planning to get his BSkyB to buy One-Tel, a company where his now out-of-favour brother Lachlan lost a lot of money for investors, including daddy.

There's no doubt that Rupert is one of the greatest business leaders of our age - a fearless, visionary creator of opportunities and wealth. But concern is growing in the investment community about the future of his News Corp media empire.

Rupert will be 75 next birthday and, although he is still eight years younger than Viacom boss Sumner Redstone, talk inevitably turns to succession. Will it be James Murdoch? Will it be Peter Chernin? Will it even be Wendi Murdoch?

Whoever it is will have to deal with what is increasingly becoming a "Murdoch discount".

News Corp shares trade at around 15 per cent less than the likes of Time Warner or Walt Disney. BSkyB is one of the sustainable growth stories of British media but the market punishes it for the most minor indiscretion.

Investors and analysts have a menu of gripes about Rupert Murdoch's empire. The topic is the way in which the Murdoch family controls News Corp, and BSkyB, via large minority positions.

Another gripe is nepotism. James is a talented guy, but would he be where he is without his father's influence?

And does BSkyB have to award James a pay package at the top reaches of what executives receive in Britain?

And would Lachlan have risen to chief operating officer of News Corp without help from his dad? And did he deserve a multimillion-dollar payoff when he resigned for personal reasons?

The prospect of either son succeeding Rupert has had investors concerned for some time. This market is uncomfortable with companies run as family businesses.

A third issue is complexity. BSkyB and DirecTV are among a slew of businesses controlled through minority investments. Many subsidiaries are registered in offshore centres for tax reasons. News Corp accounts, to be fair, are scrupulously presented. But investors fear that when Rupert Murdoch dies, it will be hard to unpick the empire he created.

Predictions that we are in the twilight of the Rupert Murdoch era have been so often proved wrong it is difficult to call it again. This great mogul cannot go on for ever, though. But will his empire be worth more without him?

Rupert Murdoch

Age: 74

Born: Australia

Education: Oxford University, Masters in Economics 1953

Career: Chairman/CEO of News Corp. Chairman/CEO of Fox Entertainment. Chairman British Sky Broadcasting

- INDEPENDENT