Rupert Murdoch steps down

This is an audio transcript of the FT News Briefing podcast episode: ‘Rupert Murdoch steps down’

Marc Filippino
Good morning from the Financial Times. Today is Friday, September 22nd, and this is your FT News Briefing.

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The Rupert Murdoch era is over. Well, kinda. And Russia is squeezing the oil market again. Plus, the Bank of England left interest rates alone yesterday. But I’ll tell you, it was a pretty close decision for a pause. I’m Marc Filippino and here’s the news you need to start your day.

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Rupert Murdoch is stepping down as chair of Fox and News Corp. His son Lachlan Murdoch will take over. This marks the end of an era for the powerful media billionaire, but he still promised to stay on as chair emeritus. The FT’s US business editor Andrew Edgecliffe-Johnson is here to unpack this. Hey, Edge.

Andrew Edgecliffe-Johnson
Hi, Marc.

Marc Filippino
So aside from this being the real-life version of the TV show Succession, why is Rupert Murdoch’s stepping down a big deal?

Andrew Edgecliffe-Johnson
Well, the big deal is simply that this is the most watched succession drama in not just media, but in pretty much any industry you can think of. Rupert Murdoch has run this company for the better part of 70 years. And more importantly than that, he has had an influence on three continents, the likes of which no media baron has had before him. So this is a singular figure in the worlds of media and, frankly, politics. And so who wields power in News Corp and which is the owner of titles from and properties from Fox News to The Sun in the UK, The Australian in Australia, his homeland, is a matter of huge importance for the politicians of those countries and for the culture of those countries as well as just the media industry.

Marc Filippino
Given that Rupert Murdoch said he was staying involved in the companies, I guess, how much is actually going to change?

Andrew Edgecliffe-Johnson
Over the years, Rupert Murdoch has had several different titles at the helm of his two companies now, Fox and News Corp. They were split some years ago, but he’s really been the sort of presiding genius over both of them, whether he was called CEO or chair. Now he’s gonna be chair emeritus and his son Lachlan will have, formally, the title running both of these companies. And so it is an acknowledgment that his older son, Lachlan, is the — not just the heir presumptive — but the heir. At the same time, he has told his employees in a communication to the whole company that they can still expect to see him popping up in the office on a Friday afternoon. They will still be giving them feedback on stories he likes, stories he doesn’t like and he’ll still be consuming everything they do. So I think Rupert Murdoch is not going away, as we’ve been told while calling around, you know, senior people who’ve worked with him over the years. As long as there is breath in Rupert Murdoch, everybody in those organisations will still be looking to him to try to interpret what he wants and which way he wants his properties to go. At the same time, this is a good day for Lachlan Murdoch.

Marc Filippino
Andrew Edgecliffe-Johnson is the FT’s US business editor. Thanks as always, Edge.

Andrew Edgecliffe-Johnson
Thank you, Marc.

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Marc Filippino
Russia instituted another energy export ban yesterday. Moscow is only sending diesel and gas out in rare exceptions like to its military bases overseas. The oil market was already under pressure before the announcement. Crude prices are getting close to $100 a barrel and the ban will squeeze supply even more. Diesel prices in Europe jumped almost 5 per cent after the announcement, and the cost of Brent crude oil rose 1 per cent. Investors are concerned that Moscow is taking a page out of its playbook from last winter when it weaponised oil in retaliation for western sanctions. The Kremlin said the ban is temporary and meant to fight rising energy prices in Russia. But Moscow also didn’t give a timeframe for when the ban would end.

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The suspense leading up to yesterday’s Bank of England meeting was intense, and even its decision to hold rates steady wasn’t boring. Here to talk to us about why this was the case is the FT’s economics editor Chris Giles. This is actually his last central bank meeting as economics editor before he moves on to commentating for the FT. Congrats, Chris.

Chris Giles
Thanks, Marc. I’ve been really looking forward to it. It’ll be quite different.

Marc Filippino
I’m sure. But we’re glad to have you here for this Bank of England meeting. So Chris, the vote, as I mentioned, was tight. It was a five-four split to hold rates at 5.25 per cent. Why was it so close?

Chris Giles
It was so close because we got some very good UK data on inflation on Wednesday. So that meant that a meeting that everyone had basically thought would be another quarter point and that might well be the last one or there might be one more to come after that, it suddenly threw the cat among the pigeons because it really showed that inflation was coming down faster than people thought, broader than people thought. And that clearly swayed members of the Monetary Policy Committee right at the last minute. So really tight, knife-edge stuff.

Marc Filippino
Does this signal to people that the UK has inflation under control? I mean, what is the BoE signalling with this move?

Chris Giles
I don’t think you can say inflation’s under control yet. It’s still 6.7 per cent, but it does signal that there’s definitively progress being made in a way you couldn’t have said just a couple of months ago. It feels not like a pause. This feels like the peak of rates in the UK and the Bank of England in the minutes wasn’t trying to steer people away from that judgment. They’re now saying we’re gonna keep rates sufficiently tight or sufficiently restrictive for a sufficiently long time, which is basically what the European Central Bank is saying and pretty much what the Fed is saying.

Marc Filippino
Yeah, so the Bank of England is now the latest major central bank to introduce a pause or I guess the concept of a pause in the past few weeks. The ECB indicated it will enter a pause. The Fed is already in one, but we’ve seen inflation in the US and in the eurozone drop more quickly than in the UK. So, Chris, when you look at those scenarios compared to this one, is the BoE’s pause merited?

Chris Giles
I think it probably is merited. I was thinking about what would I have done if I had been on the committee and before the inflation data, I would have definitively voted for a raise. And not to sound like a flip-flopper, I think when I saw that inflation data yesterday, I thought, wow, that really is something that you’d have to think carefully about. I probably would have flipped. And the reason it was so good was not because it was any one thing that was bringing down inflation, but it was across the board. So core inflation fell from 6.9 to 6.2 per cent. Services inflation has come down from 7.4 to 6.8 per cent. And although those numbers are still very high, it does signal that they’ve turned the corner and are coming down. But, you know, some of these things you can say this for a while and then it can change because it’s changed so much over the past two months.

Marc Filippino
That was Chris Giles, the economics editor for the FT. Thanks so much for your time, Chris.

Chris Giles
Thanks, Marc.

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Marc Filippino
You can read more on all of these stories at FT.com for free when you click the links in our show notes. This has been your daily FT News Briefing. Make sure you check back next week for the latest business news.

The FT News Briefing is produced by Kasia Broussalian, Sonja Hutson, Fiona Symon and me, Marc Filippino. Our engineer is Monica Lopez. We had help this week from Monique Mulima, Persis Love, Lucy Snell, David da Silva, Michael Lello, Peter Barber and Gavin Kallmann. Our executive producer is Topher Forhecz. Cheryl Brumley is the FT’s global head of audio and our theme song is by Metaphor Music.

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