Why Lachlan Flew the Coop: It Was Rupe

Dynasties have their own logic, but generally they’re supposed to go to youth. The Murdoch family succession is going in the opposite direction. Now that Lachlan Murdoch has resigned as deputy chief operating officer of News Corp., a Post spokesperson has told The Observer that he will be replaced as publisher of the New York Post by its former publisher, Rupert Murdoch.

The restoration of the 74-year-old Mr. Murdoch to the vehicle into which he has thrown so much capital and passion comes after a week of the kind that the Post itself would revel in, of public family turmoil and power Parcheesi that exacted an emotional cost from his son. Last Friday, July 29, shortly after his sudden abdication as the designated crown prince of News Corp., Lachlan Murdoch went to lunch at Da Silvano. The 33-year-old bluff and hardy publisher and News Corp. executive came in at around 1 p.m. with a group of about eight people, according to one eyewitness.

He stayed for five and a half hours.

“They started with—they all ordered Italian beers, Peroni Nastro Azzurro, the best line of Peroni,” the eyewitness said. Then came multiple bottles of Lupicaia wine, and cold cuts, truffled burrata cheese, stuffed zucchini blossoms, branzino, homemade pasta with more truffles. Lachlan Murdoch’s wife, bra and swimsuit model Sarah O’Hare, stopped by, bringing their infant son, Kalan.

By the last half hour of the meal, the bare-knuckled young publisher of the New York Post was in tears. “He was like, sort of crying on an elder gentleman at the table,” the eyewitness said. “It seemed to me like a very tender moment.”

Who could blame him? He was leaving the town where he seemed to have occasionally had a ball, where he and his wife made one home and were about to go to construction on a second, massive one at 11 Spring Street, where she served on the board of the Public Theater, where he had become a Soho House regular, a supporter of the arts, the driving force behind the figurehead of the News Corp. empire, the Post.

Why was he leaving? Reports of anger toward his father’s sometimes tyrannical rule were rife, and the elder Mr. Murdoch’s terse declaration that he was “particularly saddened” by his firstborn son’s decision to quit didn’t quiet them. Rupert Murdoch had assigned Lachlan—weaned professionally on newspaper ink in the pressrooms of Australia—to run his beloved Post in 2000, and he became an affectionately regarded advocate for the band of South Street renegades and reporters who populate the newspaper; he had a close working relationship with the trample-all-comers editor, Col Allan.

But even Mr. Allan said he was mystified. “I’m sure you guys have questions,” Mr. Allan had told his section editors on the morning of July 29, according to a person familiar with the meeting. “But I don’t have answers.”

Post staffers had received no warning before waking up to the news of their publisher’s resignation. In the newsroom, they reviewed the same wire stories and the same bare-bones News Corp. press release that the rest of the world was reviewing. “It came as a total shocker,” a Post staffer said.

Lachlan Murdoch reportedly chafed under the competitive power sphere of Peter Chernin, the News Corp. chief operating officer, to whom he had to report—a surrogate older brother to go with his real father. He had the administrative pleasure of supervising the company’s 35 television stations. He oversaw the company’s HarperCollins publishing group. When, last fall, News Corp. headquarters itself followed Lachlan, uprooting itself from Adelaide and the Australian Stock Exchange in favor of Manhattan and the NYSE, it looked as though the empire had moved for the young emperor-in-waiting.

But the only heir Rupert Murdoch has ever kept is Rupert Murdoch. And Mr. Murdoch had found new life with his third wife, Wendy Deng, and their two baby daughters, Chloe and Grace. He set up shop in New York, buying a massive $44 million apartment at 834 Fifth Avenue, and snuffed out succession talk “forever.”

Rupert Murdoch had resolved his own midlife crisis. At 74.

And strangely, as has often been reported, Mr. Murdoch’s life and drive continue to play themselves out in the one part of his media empire that may win markets, but doesn’t make money: his own longest battle, begun with his purchase, from Dorothy Schiff in 1976, of the formerly profitable New York Post.

It is his pleasure and his torture, all the more so because of this one fact: Rupert Murdoch’s ego, history and genius are tied up in the New York Post. But the beloved tabloid still loses a ton of money.

In Lachlan’s ostensible turf, The Post, his father was still the face of ultimate authority in the newsroom—cropping up visibly a few times a month, as he always had at his favorite possession, “hands-on,” in the words of one Post staffer. In Lachlan’s dealings with television stations, as he sought to implement the paper’s TV-plus-newspaper duopoly plans in various markets, rival executives answered to his father.

It was very much as in other empires where the patriarch took a stab at installing his son—Henry Ford with Edsel, Darryl F. Zanuck with Richard—and then took the power back, unable to relinquish it. At every turn, Rupert Murdoch remained in charge.

“This had been cooking for a while,” said a source close to News Corp. So now Lachlan was giving his father one month’s notice and fleeing the newly established center of things—even as the permits for scaffolding on his five-story house at 11 Spring Street were filed the next day, July 28. He sent an e-mail to his staff at the Post, calling the move “this next step forward in my life and my career,” then went off for that lunch at Da Silvano.

Lachlan Murdoch was known as a constellation of Brash Young Man markers—the spiky hairdo, tattoos, the defiant footballer’s posture. The press was insistent on tagging him: The famous spikes, for instance, were shaved off by last year, but continued to crop up in news accounts and even in The Wall Street Journal’s hedcut illustration when he resigned.

His profilers were fixated on, mesmerized by his body ink, but couldn’t even agree on where it was: “his upper arms” ( Daily News), “his left forearm” ( USA Today), “his arms” ( The Australian), “forearms” ( Vanity Fair), “both arms” ( New York Times). For the record: left forearm, right biceps.

(They had the same trouble with the wife’s body ink.)

Physically finding a home in Manhattan seemed to be a challenge for the couple. In 1999, Lachlan purchased a 3,290-square-foot loft in Soho for $3.56 million, an eighth-floor condo with four bedrooms, a master bath with steam shower, and a 1,855-square-foot terrace. But in February 2004, he sold the property—at a 100 percent profit. In the meantime, he’d bought a cavernous former stable at 11 Spring Street—a 14,500-square-foot Gothic structure previously occupied by a lighting plant, which had kept electric candles burning in each window.

According to permits filed with the city since December 2003, the estimated cost of renovating the building has been $1.095 million so far; permits have called for interior demolition, repair of the façade, replacement of all the floor joists, and sundry other work to turn the structure from a manufacturing facility into a one-family dwelling. Asfour Guzy Architects was hired for the job.

Despite the new scaffolding permits, on the morning of Aug. 2, there was no work in progress at the site. The bottom level was still covered with graffiti, flyers and wheat-pasted posters, including a four-foot image of a skull talking on a cell phone, near the front entrance. Several of the windows were boarded up.

Lachlan Murdoch and Sarah O’Hare were both involved in New York activities to some extent. “Unlike a lot of people in the social scene, they’re not eager to be in the social scene,” said New York Social Diary scribe David Patrick Columbia. “They weren’t real fixtures on the circuit,” said society publicist R. Couri Hay. “Which is too bad. People wanted them to be more active.”

Lachlan Murdoch is on the board of the Robin Hood Foundation; Ms. O’Hare is on the board of the Public Theater. She organized a presentation of the Tim Robbins play Embedded, a political satire about the coverage of the Iraq war. During a panel discussion afterward, Mr. Robbins complained to Fox News anchor David Asman about the Post’s treatment of him, while Lachlan Murdoch sat one row behind Moby, according to The New York Times, apparently unruffled.

Mr. Murdoch is a native of London, largely educated in New York with dual American and Australian citizenship; Ms. O’Hare is a London-born Australian citizen. They fed their homesickness at Soho House; at Public, a lounge-restaurant that imports ingredients from Australia and New Zealand; at Eight Mile Creek, a restaurant in Little Italy that grills kangaroo and serves Australian wines.

Mr. Murdoch embraces his father’s birthplace as his own land, even if Australia is what a source close to News Corp. calls something of an “adopted home.” Lachlan, the source said, “felt very much that an Australian character was the soul of his company … and that informs a lot of who he is. He sees himself, and enjoys being, very Australian.” So the couple made occasional appearances at events and benefits hosted by the American Australian Association, a group founded by Rupert Murdoch’s father, Sir Keith Murdoch, to foster friendship between Australia and New Zealand and the United States. One Australian called the couple “very down-to-earth …. Their social life in New York was very low-key, centered around people they really liked—their friends—rather than a need to bring the bigwigs in.”

Mr. Murdoch took repeated vacations and business trips to Australia; Ms. O’Hare headed south last year to give birth to Kalan. The couple was still planning to leave on Aug. 3 for a previously scheduled trip to the continent, prior to Lachlan’s final departure at month’s end.

“Sydney is a great place to raise kids,” an Australian involved in New York media circles said. “For every Australian couple I know who has kids, it’s a big deal whether you bring them up in New York or in Australia, because New York is perceived to not be as good a place to bring them up. It’s a real source of tension for Australian couples. New York is such an urban jungle, and the quality of life is so much lower here, even if you have tons of money.”

In retreating to Australia to raise a family, Lachlan would be following his own father’s advice. Biographer William Shawcross, in his 1992 Murdoch, quotes Rupert Murdoch on his own children in 1979: “If they want to lead a life in newspapers, if they choose that, they will grow up with better values in Australia than anywhere else I can think of.” Business-watchers took Lachlan’s departure as a cue to play stock-picker with the chances of other News Corp. figures and Murdoch family members: James Murdoch up 2 1¼ 4 … Roger Ailes up 2 7¼ 8 … Elisabeth Murdoch down 3¼ 8 …. Yet four years ago, Lachlan’s mother, Rupert Murdoch’s second wife, the novelist Anna Murdoch Mann, told the Australian Women’s Weekly that she didn’t want any of her three children with Mr. Murdoch to inherit control of News Corp., saying “there’s going to be a lot of heartbreak and hardship.”

In her 1988 novel Family Business, about the internal struggles of a media dynasty, she wrote: “Picking a successor would be like digging his own grave.” She was describing the fictional 55-year-old Colorado newspaper boss James McLean, but the point is hard to miss. Adultery, in Ms. Murdoch’s novel, is nothing more than true love’s way round the back gate; inheritance is the path to ruin. In the end, McLean’s daughter Yarrow—a reimagining of Rupert in skirts, the ruthless proprietor of The New York Telegraph—sells off the whole enterprise rather than choose among her disappointing, squabbling children.

There was a time when many observers viewed Anna Murdoch Mann as the likely successor. She was a former journalist who knew what her husband’s game was. Then came Mr. Murdoch’s romance with News Corp.’s Hong Kong business executive Wendi Deng, and his whirlwind divorce from his second wife. Pretty soon, Mr. Murdoch had become a newlywed and the jolly Soho father of two toddlers, Grace and Chloe.

But with Shakespearean swiftness, his new family configuration reportedly put new strains on the trust arrangement under which he and his four adult children from his previous two marriages jointly controlled the clan’s shares of News Corp.

The dueling accounts of the real-world Murdoch rift—the tyrannical Rupert suppressing his children vs. the business stratagem—all seem like so much overdetermination. In any giant billionaire clan, family tension is nothing new. And the media focus on the schemings of Ms. Deng regarding her children and the Murdoch trust is a non sequitur to the story of Lachlan Murdoch and his new life. In the sixth-floor gym at News Corp., only two people had permanent, numbered lockers: No. 1 for Rupert Murdoch, No. 2 for Lachlan.

Lachlan Murdoch had been a generally unseen manager in the Post’s 10th-floor newsroom. According to staffers, he rarely shuttled up from his eighth-floor offices when he was in the building. He appeared on major occasions: Sept. 11, the anthrax scare in 2001, the 2003 blackout, a tour of the building by Bill Clinton in 2004.

“But I wouldn’t expect to see him around,” one staffer said, “because he’s a top executive in a global company …. I wouldn’t expect to see Rupert around, either. But there’s just something about this place that he loves …. It’s his first honey. Despite the massive empire, this is his No. 1 love.”

At HarperCollins, which also fell under Lachlan’s authority, he was not overly involved in the company’s day-to-day operations, according to a source at the publishing house. Still, he was known for having a “harmonious relationship” with HarperCollins chief executive Jane Friedman, the source said.

“I think he took a lively interest,” the source said. “He really did love print media. I was impressed by his dignified, quiet demeanor.”

A Post source said that Lachlan’s involvement in the paper’s operations was filtered through Mr. Allan, the rip-snorting Australian newspaper veteran and family friend who embodied the Murdoch approach to journalism. Mr. Allen came on as editor soon after Lachlan was assigned to oversee the Post. “There was a lot of communication between the two,” the source said.

“On a story I worked on,” the source continued, “every time I talked to Col, I got the sense Col had talked to Lachlan. It’s fair to say they had been in contact fairly often.” Lachlan Murdoch had worked with Mr. Allan in the Southern Hemisphere, and “putting Col in was his decision,” said a source at News Corp. Yet Lachlan Murdoch largely escaped the blame, or credit, for the transitional dust-ups at the Post: It was Rupert Murdoch whose irate dissections of the paper were reported when editor Xana Antunes resigned in 2001; the “Friday Morning Massacre” soon after—in which a half-dozen editors and columnist Jack Newfield were axed—was chalked up to Mr. Allan and Rupert Murdoch.

Lachlan Murdoch’s influence was more noted at the printing plant, where he crusaded for improving a notoriously smudgy newspaper, building impressive new presses by bringing in staff he’d worked with in Australia. In 2003, he told The Observer that he’d “hit the roof” at a company retreat when executives told him that their goal was to equal the quality of the Daily News. Heads rolled.

Lachlan Murdoch was most clearly intent on winning his spurs against Mort Zuckerman’s Daily News. Unable to make a profit with the Post’s eternal-discount 25-cent price, he and Mr. Allan focused on cutting into the Daily News’ circulation advantage—and taunting the rival paper with every gain. The West Side sign at the Daily News’ headquarters, rubbing the rival paper’s nose in The Post’s rising circulation, was a Lachlan Murdoch stunt.

“He loved the battle with the Daily News,” said a source familiar with News Corp. “He really brought to bear his experience in Australia here.”

But the young publisher’s approach brought genuine ill will to a tabloid war that could sometimes resemble two bickering sixth-graders. The July 30 Daily News greeted his resignation with a story declaring that he was leaving “after failing to fix the money-losing New York tabloid.”

The Post’s staff didn’t view his departure as a crippling setback. “I think as long as Rupert is in charge, we’re in tip-top shape,” a staffer said. “I think our great prince is Rupert Murdoch. He’s the Post’s heart and soul, as long as he’s at the helm.”

And by Aug. 3, he was.

—Additional reporting by Michael Calderone, Sheelah Kolhatkar, Lizzy Ratner, Gabriel Sherman and Choire Sicha

It’s official: On Aug. 3, British celebrity weekly OK! launches in New York.

The timing would appear to be fortuitous, as London scandal takes the lead in the city’s other glossy gossips.

We’re talking, of course, about Jude Law. The British cad’s face has appeared on covers of Us Weekly, Star and People in the past two weeks. The New York Post ran a string of Jude Law covers over three consecutive days in July.

But in the magazine business, appearances aren’t everything. Preliminary scan data recorded at retailers including Barnes and Noble, Wal-Mart and major supermarket chains show that Us Weekly, Star and People all posted below-average sales with Jude Law on the cover.

Each lost between 100,000 and 200,000 sales—representing anywhere from 10 to 20 percent of total newsstand sales, on average, for each of them. People deputy managing editor Larry Hackett defended his cover star.

“It’s a good news story,” Mr. Hackett said in a phone interview on Aug. 1. “We had good reporting, and this story had legs. In terms of the story of last week, it’s the story to go with.”

Mr. Hackett added that People’s November 2004 cover, with Jude Law topping the magazine’s “Sexiest Man Alive” list, was a top seller for the magazine with 1.7 million sales.

Us editor in chief Janice Min attributed her magazine’s poor performance with the Law cover to American preference for domestic stars—think Jessica Simpson in a stars-and-stripes bikini—over foreign ones (and their domestics).

“National dramas like Brad and Angelina have a lot more heat than a British actor who has a fiancée who fewer people have even heard of.” —G.S.

New York Times pundit standings, July 26–Aug. 1 1. Paul Krugman, score 16.5 [rank last week: 2nd] 2. Thomas L. Friedman, 12.5 [tie—3rd] 3. (tie) Bob Herbert, 11.5 [6th] Nicholas D. Kristof, 11.5 [tie—7th] 5. (tie) David Brooks, 0.0 [5th] John Tierney, 0.0 [tie—7th]

The highest score among all pundits this week belonged to Maureen Dowd, whose July 24 obituary for her mother remained on the Most E-Mailed stories list for a second week, while Ms. Dowd remained on book leave and wrote no new pieces. Following the precedent for leftover columns set while Frank Rich was vacationing back in April, the pundit standings set aside Ms. Dowd’s score of infinity. Paul Krugman, with the highest score of any columnist who actually wrote anything, takes first place. —T.S.