Rupert Murdoch, the Australian native who became an American citizen in the 1980s to build out his broadcast media empire in the United States, is stepping down as the co-executive chairman of Fox Corporation, the company announced on Thursday.
Murdoch, 92, will pass the reigns on to his son, Lachlan Murdoch, who already serves as the chief executive of Fox and will become the company's sole executive chairman when the transition is complete in November.
"On behalf of the Fox and News Corp boards of directors, leadership teams, and all the shareholders who have benefited from his hard work, I congratulate my father on his remarkable 70-year career," Lachlan Murdoch said in a statement distributed by Fox Corporation early Thursday morning. "We thank him for his vision, his pioneering spirit, his steadfast determination, and the enduring legacy he leaves to the companies he founded and countless people he has impacted. We are grateful that he will serve as Chairman Emeritus, and know he will continue to provide valued counsel to both companies."
At Fox, Murdoch's decision to step away as co-executive chairman is largely symbolic, as the business has been under the watch of his son since 2019. That year, Fox sold most of its film, television, studio and cable entertainment assets to the Walt Disney Company, with Fox transitioning to a company focused on its broadcast, cable news and premium sports business.
Since then, Lachlan Murdoch has been instrumental in pushing forward with key business deals that have brought Fox into the modern age. One year after the Disney deal, Murdoch orchestrated the acquisition of Tubi, a nascent streaming service based in San Francisco that has quickly become the crown jewel of the company's advertising business.
While its peers have focused largely on building out subscription-based streaming services that have yet to turn a profit on their own, Tubi concentrates its efforts on delivering television shows and movies that are free to access and subsidized by advertisements.
Shortly after acquiring Tubi, Fox's Chief Financial Officer Steve Tomsic told attendees of a tech conference that he predicted the streamer's revenue would eventually eclipse that of Fox's flagship broadcast network. A few months later, Tomsic revealed Tubi was on pace to earn around $300 million in revenue during Fox's 2020 fiscal year — returning nearly three-quarters of what Fox spent to acquire the service in the first place.
In earnings reports, Fox incorporates Tubi's revenue on the same line as its flagship broadcast business, which makes it somewhat difficult to track how much Tubi generates on its own (during the company’s most-recent quarter, revenue attributed to Tubi and its broadcast business was $1.587 billion). But comments made by Murdoch and Tomsic over the last few months suggest the streaming service is more than carrying its weight.
"We’re looking forward to Tubi being a central part of our Upfront negotiations," Murdoch said on a conference call with investors in May. "It’s clearly not only a strategic driver for us, but an important driver going forward...we just think it’s a tremendous opportunity."
The company doubled-down on its Tubi bet by reorienting much of its digital businesses around the service, forming the Tubi Media Group in April and appointing Paul Cheesbrough to serve as the group's CEO. A short time later, Fox said it was hiring former Vimeo CEO Anajli Sud to serve in the same role, overseeing Tubi's streaming business. Sud started at Fox earlier this month, and reports to Cheesbrough.
Rupert Murdoch's decision to step away from his chairman roles at Fox and News Corp will mean his son has to take on more responsibilities at the latter — a business that largely revolves around newspaper and book publishing. That opens the door for more executive reorganization at Fox, which could see additional leaders brought on to oversee the broadcast network and Tubi.
There are already signs that the Tubi business under Cheesbrough and Sud could see some changes in the coming months, with Tomsic saying at a recent investor conference that he would like to see more synergies between the ad sales teams at Fox and Tubi. (Both brands are run as separate businesses under the same common ownership.)
"We'd like to see more integration from a Tubi ad sales perspective with our national ad sales force, in order to bring a more-unified view of Tubi with key advertisers, and we're well on our way with that," Tomsic said.