Rupert Murdoch is breaking up his empire for the sake of his family

It is better to break up the business, take the family money out, and keep the bits you – and the rest of the family – would like. That way, you ensure your family remains wealthy for generations to come

While he has assembled a huge global empire, it is a quirky, sprawling, ramshackle one (Getty)

For most Britons and indeed Americans too, the group of media companies assembled by Rupert Murdoch is one of the world’s great global commercial empires, to be feared, loved or hated depending on your political inclinations throughout the Anglophone world.

That is true in a way. It is extraordinarily important, and insofar as media groups do influence the views of electorates, there is indeed political power as well as commercial power embedded in it. But there is another way of looking at it, which runs like this.

Murdoch wanted to create a media business that would disrupt the status quo, be that the newspaper establishment of Britain in the 1960s, or the US television networks of the 1980s. He did that stunningly well – if you are interested in the motivation, get to see Ink, the tale of his purchase of the Sun, now playing at the Duke of York’s theatre in London with Bertie Carvel as Rupert.

But while he has assembled a huge global empire, it is a quirky, sprawling, ramshackle one. There is the old newspaper business, on both sides of the Atlantic and in Australia. There is a television business, with Fox News in the US and a large minority stake in BSkyB in the UK. There is the entertainment arm, 21^st Century Fox, and a lot more besides: the book publisher HarperCollins, the National Geographic Channel, and so on.

This quirky element raises a question. He is 86. He has put together the business by using other people’s money, with the result that there are lots of other shareholders owning chunks of it. He can run that empire, because he is a genius, but could his sons, Lachlan and James? It is a bit unfair to say so, but the general assumption is that they couldn’t. (His daughter Elizabeth might be able to for she has his flair, but she has turned her back on it, at least for the time being.) These are not easy times for legacy media.

So maybe it is better to break up the business, take the family money out, and keep the bits you – and the rest of the family – would like. That way, you ensure your family remains wealthy for generations to come.

So in the past few days New York has swirled with rumours that most of it might be sold to Disney, leaving Fox to focus on news and sport. CNBC reported that talks had taken place, and shares in both companies, especially Fox, have shot up in this week. This particular deal may not go ahead, but Murdoch is a clear seller. Once something is known to be for sale, it is a question of price, and the rise in the share price of Fox suggests that there are other bidders in the wings.

From a British perspective this seems odd, because 21^st Century Fox has been trying to take full control of BSkyB, and is currently being blocked by the government. So why try and take something over if you are planning to sell the company that was going to make the bid? Indeed there are stories that the Murdoch stake in BSkyB is itself for sale.

I cannot pretend to know Rupert Murdoch’s mind. I have never met him, though inevitably in this trade I know many who have. But I can see how he might be thinking. He has to plan for his family’s future and that is complicated for obvious reasons. By most standards he is hugely wealthy – Forbes estimates his family’s net assets at $12.2bn – but in the global billionaires’ league table that is only just in the top 100. More than this, he does not want to feel that everything will fall to bits when he dies. The media business has been utterly transformed, and legacy media are not the greatest place to be. Moreover it is dangerous to rely on friendly shareholders to maintain control of your business.

If this is right, it would make sense to de-risk. You would cut the business down to a size that your children can manage, and take full control of it. In other words you would turn what you have not sold into a series of private companies. You would diversify your wealth so that children and grandchildren would remain wealthy for generations to come. And you would do this while you still had control, rather than having your children and your executors do it for you.

I think this is what is going on. It sort of makes sense, doesn’t it?