Rupert Murdoch’s Retirement Raises the Curtain on His Last Act

Rupert Murdoch’s announcement on Thursday that he was stepping back from day-to-day oversight of his media empire cleared the way for his eldest son, Lachlan, to claim sole oversight of the businesses.

The move made it clear that Rupert Murdoch would like to see Lachlan run the companies. But it didn’t answer the question of who will control the trust that votes the family’s shares after the elder Mr. Murdoch, 92, dies.

At that point, his four eldest children will have to work out his ultimate successor among themselves — and they appear to be divided.

Hours after Mr. Murdoch’s announcement on Thursday, some media executives who have worked with him argued that Mr. Murdoch would not have stepped down without some greater gambit in mind that further solidifies Lachlan’s control over the companies.

“Him stepping aside is the intermission,” said Ross Levinsohn, a former News Corp executive who is now chairman and chief executive officer of Arena Group, which publishes Sports Illustrated and Men’s Journal. “Wait until you see the final act.”

It is unclear what that act could be. Fox Corporation and News Corp declined to comment.

Last year, Rupert Murdoch made a move widely perceived within the empire as an effort to shore up Lachlan’s authority: Attempting to merge News Corp and Fox Corporation. He backed away in January, with both companies saying at the time the combination wasn’t optimal for shareholders.

Two people close to Mr. Murdoch, who spoke on condition of anonymity, believe that he will make another attempt to reunite the companies. The people cautioned that a full merger was unlikely in the short term.

Any new deal would likely be preceded by a sale of parts of News Corp, including its real estate business, in an effort to smooth over investor concerns that soured the merger last year, the two people predicted. Some shareholders believe the real estate assets — which include REA Group, an Australian real estate listings powerhouse — are more valuable than Wall Street is giving News Corp credit for, and they want to see it sold before any merger talks begin.

Unless those assets are sold off first, any attempt to reunite both companies could run into opposition from those News Corp shareholders, who are wary of circumstances that would allow Rupert Murdoch to sell to himself at a discount. Some Fox shareholders have also been skeptical of a deal with News Corp, arguing that the newspaper, sports and entertainment businesses are not complementary.

“We don’t see the merits of combining with News Corp, but rather think the company should pursue strategic alternatives on its own,” said Robert Fishman, an analyst at SVB MoffettNathanson. He added that a deal combining Fox News with the rest of News Corp could make sense.

Mr. Murdoch appears to be fully engaged at News Corp and Fox, despite his announcement on Thursday. He was in his office in Los Angeles this week, according to a person familiar with the matter, and continues to advise Lachlan on big-picture strategy for the company.

Indeed, in a letter announcing his decision to step aside, Mr. Murdoch told employees to “expect to see me in the office late on a Friday afternoon,” adding that he would be “reaching out to you with thoughts, ideas and advice.”

The real power behind the throne at Mr. Murdoch’s empire will continue to be the man who founded it, said Rich Greenfield, an analyst at LightShed Partners.

“As long as Rupert Murdoch is in control of these companies — whether he is C.E.O., chairman, executive chairman or chairman emeritus — he still owns the company and has since he started it,” Mr. Greenfield said.

Jon Miller, the chief executive of Integrated Media Company and a former News Corp executive, said that Mr. Murdoch has proved himself to be unsentimental about his businesses — with the exception of certain news publications — as evidenced by his decision to sell the 21st Century Fox movie studio and other entertainment assets to Disney in 2017 for $71.3 billion.

The tectonic shifts underway in the media industry, illustrated by Disney’s willingness to contemplate significant moves — including an outright sale of the ABC broadcast network — indicate that Mr. Murdoch might also consider a sale at the right price, Mr. Miller said.

“All cards are on the table at this point,” he said, “and the Murdochs have never been shy to come to that table.”