Will the Disney deal split the Murdoch men?

The final shape of the Murdoch family’s 21st Century Fox carve-up will be announced in the next 24 hours, but the real question is whether the news will confirm a much-rumoured split in the triumvirate of Murdoch men — dad Rupert and sons Lachlan and James. News reports and features have increasingly asserted that James Murdoch will not be sticking around at the slimmer 21st Century Fox after the Disney deal is done.

Instead, the stories have him as a possible senior Disney executive (possible CEO after incumbent Bob Iger) or running Star (the Indian satellite pay TV giant that James used to run decades ago), or leaving Fox and striking out on his own.

Media reports from the US this morning say the carve-up news will be out Thursday (US time) before Wall Street opens just after midnight our time. The Murdoch family (through the Murdoch family Trust) will only control less than 5% of Disney after the all-share US$60 billion deal is done (that puts paid to some claims that the Murdochs will be the real power at the enlarged Disney). The reports say the Murdochs will not have board representation as well, which will further reduce their influence.

The Murdoch Family Trust owns about 16% to 17% of 21st Century Fox but control the company through a 38% stake in the voting shares. With the deal all but done, interest now turns  to what will be done with the smaller 21st Century Fox — and what James Murdoch’s future will be. If he leaves it won’t be the strongest show of support for Dad and Lachie and the future of Fox and News Corp, no matter what statements are uttered and reporters briefed on background. You will have noticed that Frank Low and sons Peter and Stephen kept a united front in the sale of Westfield this week.

In many ways the departure of James Murdoch and his future would be “the story” from the Fox-Disney deal. It would recall the split in the Packer family when son Clyde went to live in Los Angeles and brother Kerry remained at home in Sydney, eventually controlling the family media empire.

If James Murdoch sees his future away from the empire — that would leave brother Lachie to be the main successor to Dad — and those readers are fully aware of what can only be described as a variable track record for Lachie. Of course, Lachie does have some runs on the board: his Australian radio empire is successful, and he did champion News Corp helping and financing REA Group (which News loved so much that it bought a US peer called Move to repeat the REA success in the biggest housing market in the world).

Does James Murdoch remain a member of the Murdoch Family Trust (which would raise a myriad conflicts of interest concerns)? If James cashes out his stake in the Murdoch Family Trust how does it raise the cash? By selling off the Disney shares and raising up to $10 billion? If James Murdoch remains a shareholder in the Murdoch Family Trust, then the family is still intact and the sons will eventually control the smaller Fox and News Corp (which look certain to be reunited in 2018 under one corporate (umbrella). The Disney shares can be cashed out to fund that deal, but a bid to reunite the empire is likely to involve non-voting shares so as to keep the family’s lock on their swag of voting shares in both companies and control the future.