In the last two weeks of the year, news emerged that Disney is set to buy the Murdoch family’s 21st Century Fox for more than $US50 billion, while the Lowy family was centre of a record-breaking real estate deal that will see its Westfield assets sold to European giant Unibail-Rodamco for $US32.7 billion. The deals cap off stellar business careers for two of Australia’s most prominent entrepreneurs, writes Adam Schwab.
Aged within one year of each other, Australia’s two most successful businesspeople chose the same week for their curtain call. But the lives of Frank Lowy and Rupert Murdoch could scarcely have started more differently.
Rupert, the son of legendary newspaperman, Keith Murdoch, grew up in relative luxury, attending elite Geelong Grammar, before inheriting (at 21) what was left of the family business when Keith passed away.
The only asset of any substance was the Adelaide Advertiser. Rupert turned that one regional paper into an empire now worth almost $19 billion. Murdoch is without peer Australia’s richest self-made person (while Gina Rinehart’s estimated net worth is similar, a far more significant proportion of Rinehart’s wealth was inherited).
Frank Lowy’s youth couldn’t have been more different — born in current day Slovakia, Lowy lived in a Hungarian ghetto during World War II. Aged 16, he fled, only to be caught and placed in a Cyprus detention camp. Lowy eventually landed in Israel before arriving in Australia, aged 22. Of all Lowy’s remarkable feats, that he was able (with fellow immigrant, John Saunders) to list a business on the Australian Stock Exchange within a mere seven years of arriving in Australia is the most astonishing.
Arguably Lowy has done more to show the benefits of immigration to Australian than probably any other single person, creating businesses worth more than $50 billion (the soon to be sold Westfield and the $22 billion Scentre Group).
In 2010, Frank Lowy was dubbed by BRW the richest Australian alive, while he has been overtaken since by Rinehart, Anthony Pratt and Harry Triguboff, both Pratt and Gina inherited much of their fortune – Lowy and Triguboff, both young immigrants, literally started from scratch.
There were certainly similarities to how Murdoch and Lowy grew their businesses through the 1960s to the 1980s. Both were highly acquisitive and masters of their craft — Lowy the property mall developer, Murdoch the newspaperman. Both were highly cost conscious (and both, to their rare discredit, paid themselves and their sons hundreds of millions of dollars in unnecessary salaries).
Lowy was able to survive his entire business career as a virtual cleanskin. Ironically, Lowy’s only real commercial folly was when he paid Murdoch $840 million for the three Channel 10 east coast stations (later adding Canberra, Adelaide and Perth). Murdoch was sold Channel 10 following changes in media laws and his acquisition of the Herald and Weekly Times.
The sale may have saved Murdoch’s empire, with the stations were sold to the Broadcom Consortium, led by Steve Cosser and Charles Curran for virtually nothing. Lowy’s Northern Star vehicle reported a loss of more than $500 million in 1989.
But when it came to developing shopping malls, there were few globally who could match Lowy. While Melvin Simon, who passed away in 2009, built a larger business, Lowy’s wealth eclipsed Simon’s. Lowy has also writ large in Australian philanthropy, specifically through his contribution to the arts and his stewardship of Australian soccer (albeit the latter was not without missteps).
Murdoch trod a far more controversial path than Lowy. From his brawls with colourful deceased rival, Robert Maxwell, to coming within literally a whisker of bankruptcy in 1990, to his significant influence on politics across the western world.
Few remember that in 1990, Murdoch was only saved from losing his entire empire after a tiny Pittsburgh bank changed its mind about calling in a $US10 million loan. The crisis was largely Murdoch’s own making, after his unilaterally paid $US3 billion for Gemstar-TV Guide, an asset that would be sold more than a decade later for $US950 million.
Murdoch would quickly rebound from the crisis and never looked back. His career was bookmarked by extraordinary risks and a brilliant ability to increase the profitability of acquired businesses.
In 1969, Murdoch exploded into London when he bought The Sun (the year before, he had purchased News of The World). The next big step was in 1985, when Murdoch ditched his Australian citizenship to purchase 20th Century Fox, and finally launching BSkyB in 1989. It was those three moves (and the later decision of his son, Lachlan, to back a then struggling realestate.com) which laid the foundations of Murdoch’s near $20 billion empire.
While much has been written of the Murdoch sale being more about personality, since the creation of the Fox TV network in the late 1980s and Fox News shortly after, it has been an ordinary few decades for Murdoch. From the overpriced Dow Jones acquisition to the MySpace disaster, the sale seems more like a recognition that it’s about time on the career of Australia’s best businessman.
But for all his business successes, Murdoch may well be remembered more for his Machiavellian political power. Many believe Murdoch’s support underwrote the disastrous 2003 Iraq invasion, while Murdoch’s Fox News can take at least some credit for the election of Donald Trump. It is no surprise that James Murdoch, who like Elizabeth, is far more left leaning than Rupert and Lachlan, is expected to leave the family business as part of the Disney sale.
It isn’t surprising that Lowy chose to sell the family jewels rather than hand the reins to one of his three, lower profile sons. Lowy was never an empire builder but a business creator and risk-taker. For Murdoch, who spent much of the last two decades pitting his two sons, James and Lachlan in a sort of nepotistic Hunger Games selling a significant chunk of his empire, the decision appears to be a rare moment of the financial taking precedence over the family.