The Economist: Rupert Murdoch named son Lachlan successor but the battle for power is not over yet

The Economist
The Rupert Murdoch succession saga continues in court.
The Rupert Murdoch succession saga continues in court. Credit: The Nightly /William Pearce

To a casual observer, the media industry’s most consequential succession battle looked to be over.

In September 2023 Rupert Murdoch stepped down as chairman of News Corporation and Fox Corporation, the two firms that make up his media empire and that together are worth $34bn.

News Corp holds Mr Murdoch’s newspapers in America, Britain and Australia; Fox Corp includes Fox News, a hard-right television network and, for more than two decades, America’s most-watched.

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At the same time, Mr Murdoch, then 92, named his elder son, Lachlan, as his successor.

FILE - Lachlan Murdoch, left, and Rupert Murdoch attend the TIME 100 Gala in New York on April 21, 2015. Media magnate Rupert Murdoch is stepping down as chairman of News Corp. and Fox Corp., the companies that he built into forces over the last 50 years. He will become chairman emeritus of both corporations, the company announced on Thursday. His son, Lachlan, will control both companies. (Photo by Evan Agostini/Invision/AP, File)
Lachlan and Rupert Murdoch in New York in 2015. Credit: Evan Agostini/Evan Agostini/Invision/AP

Yet unlike the television series that drew inspiration from the Murdoch family’s squabbling, the real-life saga is not, in fact, over.

This month Mr Murdoch, along with Lachlan, will face off against three of his adult children — James, Elisabeth and Prudence — in a courtroom in Nevada. Why are they fighting?

The dispute revolves around the family trust and, crucially, who will control it after Mr Murdoch dies.

The family has about 40 per cent of the voting shares in Fox Corp and News Corp.

The shares are worth nearly $15b and are held in a trust, which Mr Murdoch created in 1999 after he divorced Anna, his second wife.

She settled for $200m — a modest payoff, considering that she could have laid claim to half her ex-husband’s assets.

But a condition was that his four children, three of them hers, would assume equal control of the trust on Mr Murdoch’s death. Until then, he would have majority say. (Later, everyone agreed to give his two daughters by his third wife a share of the trust but no voting rights.)

Australian media mogul Rupert Murdoch with his second wife Anna Maria Torv and their 14-month old daughter Elisabeth at their home in Sussex Gardens, London, 4th October 1969. Murdoch has recently been interviewed by David Frost on his 'Frost On Friday' programme on the controversy surrounding the publication of Christine Keeler's memoirs in Murdoch's News Of The World newspaper. (Photo by Chris Ware/Keystone/Hulton Archive/Getty Images)
Rupert Murdoch with his second wife Anna Maria Torv and their 14-month old daughter Elisabeth in 1969. Credit: Chris Ware/Getty Images

It means that Lachlan’s position as successor could be in doubt after Murdoch senior dies.

Since James, Elisabeth and Prudence will each have equal voting rights with Lachlan, they could work together to depose their brother.

They could, indeed, demand that he steer the firms’ outlets in a more politically moderate direction.

James, who gives money to the Democratic Party, left the board of News Corp in 2020, citing “disagreements over certain editorial content”.

Following the Capitol riot in 2021 he criticised “those outlets that propagate lies to their audience” — a clear jab at Fox News, which last year paid nearly $800m to settle allegations that it had spread Donald Trump’s election conspiracies.

Given these possibilities, Mr Murdoch wants to amend the trust.

According to the New York Times he plans to give Lachlan “permanent, exclusive” control.

But the trust is “irrevocable”, ie, it cannot be dissolved or altered without the consent of all beneficiaries or without a court order.

Mr Murdoch does not have consent: his scheme — which he reportedly referred to as “Project Harmony”, because he hoped it would prevent a family feud on his death — has incensed the three children who would lose their voting rights.

They have hired lawyers to fight his plan. The case will be heard by a probate judge in Reno, Nevada, where the trust is located. All this would be secret if not for a leak to the New York Times. Proceedings in the case are sealed.

Convincing the court to allow a unilateral change will not be easy. (The term for it is “decanting”, as in moving assets from one vessel to another, as you would a bottle of wine.)

Mr Murdoch will need to show the judge that he is acting in good faith and doing so for the benefit of all of his children.

LONDON, ENGLAND - MARCH 05:  Rupert Murdoch arrives at St Bride's Church in London accompanied by his sons James (right) and Lachlan (left) for a ceremony of celebration a day after the media mogul officially married Jerry Hall on March 5, 2016 in London, England.  (Photo by Karwai Tang/WireImage)
Rupert Murdoch with his sons James (right) and Lachlan (left) after the media mogul officially married Jerry Hall in 2016. Credit: Karwai Tang/WireImage

James, Elisabeth and Prudence will probably claim that this is nothing more than a power grab.

Their father, meanwhile, will argue that fights among his children over management would harm his businesses, and that a shift in his outlets’ editorial stance would damage their popularity and thus shareholder value.

On that score he is probably right. Fox viewers want fawning coverage of Mr Trump; efforts to limit such fare after the 2020 election hurt ratings.

What is good for democracy is not necessarily good for Murdoch business — or Murdoch family harmony.

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