Elisabeth Murdoch

Missing from Murdoch's family deals: News Corp. shareholders

February 24, 2011: 9:35 AM ET

All-in-the-family deal-making just isn't right for a public company.

Elisabeth and Rupert Murdoch, family dealmakers.

Elisabeth and Rupert Murdoch, family dealmakers.

The Murdoch family owns only about 12% of News Corp., but Rupert Murdoch sure runs the place like a wholly-owned family candy store. The company, blurring the distinction between public and family business, makes deals with family members, using shareholder money to get them into the corporate fold.

The most recent example is the $675 million deal for News to buy Shine Group, a London-based TV production company majority-owned by Murdoch's daughter, Elisabeth. As part of the deal, she'll go on News Corp.'s board. In other words, News is buying Elisabeth, not just her company.

Once at News Corp., she'll be competing with two board members, her brothers, James and Lachlan, to become the next leader of News Corp. (NWS), the world's biggest and most influential media company. Its properties include the Fox networks, the Wall Street Journal, BSkyB, and the New York Post.

James has been at News Corp. since 1996, when the company bought an 80% stake in his start-up Rawkus hip-hop record label for an undisclosed sum. Rawkus closed in 2004.

James set up his company after dropping out of Harvard. Elisabeth had worked in the News Corp. empire, then stalked out to start her own business. But now, they've both been brought -- and bought -- into the family fold. More

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