In danger of becoming the forgotten man of the Murdoch family after stepping down as a senior News Corp (NYSE: NWS) executive in 2005, Lachlan Murdoch is keen to tell the world he’s still there and still interested in media investments. Once third-in-charge at NWS and thought of as heir-apparent to father Rupert’s empire, he’s since been overtaken in that regard by younger brother James, who last year was promoted to chairman and CEO of News in Europe and Asia. But he’s full of fighting talk in an interview with News Corp.’s The Australian, a paper he once ran, to celebrate 10 years of its media section, which he launched.
–Paid-content models: He thinks Aussie papers are among the best in the world, but Lachlan doesn’t quite know how to solve the problem of classified advertising dropping 50 percent to 60 percent this year — or how to make online pay. For him, perhaps not surprisingly, the best online model is the News Corp-owned Wall Street Journal — “all newspapers have struggled aside from that.” Echoing what many newspaper executives think about the rise of free news, he worries that “consumers have now got used to that, so it’s difficult to get people to pay, and that’s what we have to — as an industry — correct.” More after the jump…
— Family values: Lachlan says that while she’s not a board member, Elisabeth is now an “observer” on the board. Reports had suggested that, after the departure of global COO Peter Chernin, she had turned down the chance to join the board. Lachlan is still a non-exec director at News, so what about a full-time return to the company at some stage? “I won’t comment. I just want to wish the Media section a happy birthday. And I wish there was more advertising in it!”
— New investments: Lachlan’s investment company Illyria has wide-ranging bets, including stakes in an Indian Premier League cricket team and online DVD business Quickflix, but he spends most of his time looking for potential media acquisitions: “From a strategic investment view, we only look at media. We have some portfolio investments that we separate out, but what we spend 99 per cent of our time on is media,” he says. In 2007, Rupert distributed non-voting shares worth $100 million to each of his children, but Lachlan’s not convinced it’s a good time to invest — especially in Australian media, where prices are relatively high — and he is “watching the valuations come down”.
— 2009 Outlook: Lachlan predicts an “interesting” 2009 for media groups, not least because “a lot of companies will be pushed close to, if not through, their banking covenants.” That has already happened here with Daily Sport publisher Sport Media Group and B2B publisher Incisive Media; Lachlan says he is enjoying watching from the sidelines, without his own restrictive profits-to-debt ratio to manage.
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