Third-generation media heirs, Packer and Murdoch have lived parallel however contrasting lives. However it's the bitter rivalry that made them each pals and foes

When billionaire James Packer agreed to do an interview about his good friend Lachlan Murdoch, my producer and I dropped all the pieces to fly to Las Vegas. Packer was on the town to look at the rugby league’s “Vegas Spherical” extravaganza from the Fox Sports activities field the place Lachlan was taking part in host.

We knew James might inform us rather a lot as a result of he is aware of Lachlan effectively and so they have a lot in widespread. They even share a birthday, September 8, though James is 4 years older.

Third-generation media heirs, Packer and Murdoch have lived parallel however contrasting lives – like twin strands of DNA, they’ve tracked the identical lows and highs, all of the whereas remaining very completely different characters. Lachlan stayed in his father’s enterprise, whereas James bought out. Lachlan stayed married; James has twice divorced.

But when we’re all stamped early on, the defining attribute of each males is that they grew up within the shadow of media moguls – in James’s case, the late Kerry Packer, lengthy Australia’s richest man; in Lachlan’s case, Rupert Murdoch, maybe probably the most influential Australian in historical past.

The lengthy shadow solid by their well-known fathers has formed each facet of their lives. In James’s case, it has pushed him out of the media, and finally out of Australia, the nation of his start. In Lachlan’s case, he’s solely now rising from Rupert’s shadow and will by no means go away it utterly, even after his father dies, irrespective of the place he chooses to dwell.

‘Lachlan is an amazingly good good friend to me’

Packer was comfortably ensconced within the presidential suite at Wynn casinos. In line with Packer’s adviser, he’d booked a extra modest room however Wynn’s administration recognised the Packer title (the doorman instructed me everybody had fond recollections of Kerry’s Sin Metropolis exploits) and instantly upgraded him to their finest lodging. It was a two-storey multi-room residence within the luxurious wing of the complicated, with its personal personal pool and backyard.

We arrange within the huge leisure space, with its personal bar. Exterior, palm timber bent and cushions flapped on banana chairs as 100kph desert winds howled via Vegas, inflicting airport chaos. Inside, it was quiet and comfortable.

Accompanied by his new girlfriend and his minders, James was heat and welcoming, if just a little awkward concerning the opulence of the suite. Although his battles with psychological well being have been effectively chronicled, James was calm and sharp below the glare of cameras via a protracted, 90-minute sit-down interview. He knew what he needed to say concerning the good friend he sees possibly half a dozen instances a 12 months.

“[Lachlan] is one in every of my favorite folks on the earth,” he mentioned. “I like him. He is been an amazingly good good friend to me via good instances and unhealthy instances.”

Packers v Murdochs: The rugby league conflict

The unhealthy instances got here first. James went out of his strategy to welcome Lachlan to Australia when he got here from New York in 1994, a fresh-faced 22-year-old, not lengthy out of school. James invited Lachlan out to a Sydney restaurant, the place they have been instantly recognised and written up within the gossip pages.

However not lengthy after, they have been pitched headlong into the Tremendous League wars, when Information Corp tried to privatise rugby league and use it as fodder for its new pay-TV enterprise Foxtel, a three way partnership with Telstra. The Packer-owned 9 Community, which held the printed rights to the rugby league and was aligned with a rival pay-TV enterprise, noticed Information Corp’s bid as an existential menace.

It was on for younger and outdated, and Lachlan and James have been on the entrance strains, signing profitable contracts with gamers in a race for one of the best expertise within the recreation. The hostility was intense — Packer describes it as “canine eat canine” and admits his relationship with Lachlan grew to become “strained” — and either side have been out and in of court docket.

In early 1997, on the top of the disaster, with rugby league now working as a cut up competitors, James invited Lachlan for a cruise on his father’s superyacht Arctic P — appropriately, given the circumstances, a transformed icebreaker. It was a prelude to peace between the 2 households.

Lachlan took his then finest good friend Joe Cross and his brother James. Additionally on the boat was Kathryn Hufschmid, who would later develop into James Murdoch’s spouse. “That is the place James and Kathryn met for the primary time,” Packer recollects. “I additionally keep in mind that Lachlan and I most likely drank an excessive amount of. And, you realize, Lachlan and I’ve loved through the years having a drink collectively.”

The bottom was laid for a reunification of the sport to kind immediately’s Nationwide Rugby League and to divide the pay TV spoils. Foxtel would develop into a three way partnership between Information Corp, 9 and Telstra. James and Lachlan’s fathers subsequently did a handshake deal on their yachts off New Zealand.

“When it grew to become apparent to everybody that it made sense for the codes to recombine, I feel Lachlan and I most likely performed a constructive position in getting our respective fathers to the desk to do this,” Packer recollects.

Each side misplaced a fortune through the Tremendous League wars and hopes for a global competitors by no means eventuated however the rapprochement initiated by James and Lachlan set the stage for nearer collaboration between the 2 households. “What Tremendous League demonstrated is that if the households labored collectively, we might make issues occur,” Packer says. 

The following collaboration, nonetheless, would check the connection.

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‘One.Tel was 99 per cent my fault’: Packer

“I keep in mind going to Lachlan someday,” Packer recollects, “and saying, ‘As an alternative of this small pie that is free-to-air tv, why do not we truly take into consideration taking over the massive pie?'”

That ‘huge pie’ was telecommunications. These have been the heady days of the early dotcom increase and all of the speak was concerning the convergence of media, know-how and finance. James Packer persuaded Lachlan Murdoch that Information Corp ought to make investments half a billion {dollars} in an upstart cell phone firm known as One.Tel.

When the dotcom bubble burst and One.Tel ran out of cash in mid-2001, the Packer and Murdoch’s firms misplaced nearly a billion {dollars} mixed. It was a really public humiliation for each males and an enormous hit to shareholders.

To this present day Packer takes the blame for the failure of One.Tel, and for convincing Information to speculate. Lachlan Murdoch had relied on Packer, who was shut pals with founder Jodee Wealthy, and testified throughout later court docket hearings that James had burst into tears when he apologised for the catastrophe in his kitchen in Sydney’s japanese suburbs.

“One.Tel was 99 per cent my fault,” says Packer, who admits he had a breakdown within the aftermath. “Lachlan was extremely loyal to me. He noticed that I used to be hurting. I feel he took the view that I did not do it on function … and that is one thing that I will always remember.”

Considerably surprisingly, the humiliation the 2 junior moguls suffered after One.Tel’s collapse solely strengthened the friendship between them.

“One.Tel went broke on the finish of Might 2001 and September eighth, our birthday, was Lachlan’s thirtieth birthday,” Packer recollects. “So out of nowhere, I get this invitation. If I used to be Lachlan, I feel I might most likely by no means converse to me once more. So Lachlan is giving a speech and within the center he stops and says that I am there and it is my birthday and he desires to want me completely happy birthday. And it was one of the crucial shifting issues that is ever occurred to me in my life.

“It is simple to be loyal when issues are going effectively,” Packer says. “It is when instances are unhealthy that you just actually see who’s real and who’s not real.”

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A masterstroke results in Australia’s ‘finest ever media deal’

There was one silver lining to the One.Tel debacle, for Lachlan Murdoch a minimum of. Within the aftermath of the tech wreck, which had contributed to the breakdown of investor confidence in One.Tel, Murdoch was persuaded to put money into the web site realestate.com.au, which was going broke. Information Corp invested a bit over $10 million — about $3 million in money and the remaining in contra promoting — to amass a minority stake within the firm.

It will show to be a very canny funding. That struggling web site went on to develop into REA Group, a digital actual property large that Information Corp finally took management of and which is now price round $US25 billion ($37.4 billion).

“REA is, you realize, one of the best media deal ever completed in Australia,” Packer says. “After I say that I am saying Lachlan’s deal to take management of REA was a greater media deal than any deal Rupert ever did in Australia. I am saying Lachlan’s deal to take management of REA was a greater media deal than my father ever did in Australia.”

When Lachlan Murdoch sought to get full management of REA he approached Packer about shopping for his 10 per cent stake. Packer, nonetheless feeling unhealthy about One.Tel, agreed, promoting it to Lachlan for a bargain-basement $10 million.

“I needed to be useful as a result of One.Tel had been so unhealthy,” Packer recollects. “However let me be very, very clear about one factor – I by no means thought that 10 per cent stake that he purchased from me for $10 million can be price $2.5 billion. And,” he continues with fun,  “I do really feel much less responsible about One.Tel due to what occurred with REA.”

‘Underestimating Lachlan is a mistake’

James and Lachlan’s third and last joint enterprise enterprise got here on the finish of 2009, after they took over the ailing TV community Channel Ten. It will grow to be a catastrophe. The community’s fortunes plummeted, and the corporate lastly went broke in 2017, costing Packer and Murdoch a whole lot of thousands and thousands of {dollars} mixed.

Though the preliminary funding was Packer’s concept, he refuses to shoulder all of the blame for the failure of Channel Ten. “I blame myself for One.Tel,” he says. “However Ten, you realize, I feel we have been equally at fault. We each ought to have been smarter than we have been. What we must always have each completed is simply purchase extra REA shares.”

Whereas the “misses” of Lachlan Murdoch’s enterprise profession — particularly One.Tel, Ten — have acquired huge consideration, a few of his “hits” have been comparatively neglected. By means of his personal firm Illyria, he purchased the Australian industrial radio community Nova, which has turned out to be a money cow.

He has additionally completed a sequence of good offers since he took over as Fox Corp chief government in 2019, together with shopping for a invaluable stake in sports-betting large Flutter, and buying the ad-supported free streaming service Tubi, which has loved explosive progress within the US and has expanded to the UK and Australia.

Whereas Fox Corp’s share value has remained flat since Lachlan took over in 2019, the share costs of comparable media firms reminiscent of Warner and Paramount have dropped dramatically.

“I feel some folks have underestimated Lachlan,” Packer says. “I feel underestimating Lachlan is a mistake.”

What subsequent for the Murdoch dynasty?

The respective histories of the Murdoch and Packer household dynasties might provide a clue to Lachlan’s subsequent main transfer.

James Packer, born in 1967, was the one son of Kerry, who had fought and gained his personal succession battle in opposition to brother Clyde. James by no means needed to compete together with his older sister Gretel, who took no real interest in the household’s media enterprise.

When Kerry Packer died in 2005, James was 38, about the identical age as Kerry when his personal father died. Inside a 12 months, James Packer had begun the sell-down of the household’s media belongings, culminating in his 2013 exit from the trade altogether to focus solely on the Crown on line casino enterprise. The $9 billion sale of Crown to Blackstone two years in the past has left Packer free to speculate wherever he chooses.

Lachlan Murdoch, against this, labored for his father on and off for 30 years earlier than taking on the household enterprise. And even now his father, at 93, takes a eager curiosity within the firms’ affairs. Packer shared a meal with Rupert and Lachlan a couple of weeks earlier than our interview and I requested if Rupert gave the impression to be having fun with retirement. “He had a swimsuit on,” Packer noticed with a smile.

In contrast to Packer’s sister Gretel, Lachlan’s two siblings – older sister Elisabeth and youthful brother James – have been actively concerned within the household enterprise and at instances jockeyed for place.

Lachlan and James Murdoch shared energy within the firm till 2019, when most of the belongings have been offered off to Disney. After that sale, James left the household enterprise. Lachlan and Rupert have been answerable for the businesses that remained – Fox Company, which owns Fox Information, and Information Corp., which incorporates the worldwide newspaper belongings.

Since James Murdoch’s departure, the connection between the brothers has deteriorated.

Packer acknowledges the deep political variations between Lachlan and his brother James. “I feel Lachlan is fairly conservative. I feel James — and I hope I do not say the mistaken factor right here — typically is embarrassed by Fox Information. I do not suppose Lachlan is embarrassed by Fox Information; I feel Lachlan’s pleased with Fox Information. That is most likely one of many the explanation why Lachlan is the place he’s, and James is not.”

Beneath the phrases of the Murdoch Household Belief, as soon as Rupert dies Lachlan will share management of the media empire equally with Elisabeth, James and his older half-sister Prudence, the product of Rupert Murdoch’s first marriage. That association, nonetheless, is presently being challenged by Lachlan and Rupert, who’re trying to ensure Lachlan’s management of the household’s media belongings after Rupert’s dying.

It is an explosive improvement in a succession battle that has bubbled away for many years and there isn’t any doubting what aspect James Packer is on.

“I’ve met James a few instances, I’ve met Liz a couple of instances and I’ve met Lachlan 100 instances. I bought on Crew Lachlan a very long time in the past. I am Crew Lachlan.”

Half two of the Australian Story sequence – Making Lachlan Murdoch: Cash – airs tonight at 8 on ABCTV and  ABC iview.

Stream half 1 now on YouTube and ABC iview