The Secret Battle for the Future of the Murdoch Empire
Rupert Murdoch, the head of the family, is involved in a confidential legal dispute with three of his children regarding the future direction of the family’s media empire. He aims to secure the conservative nature of the business post his passing by altering the terms of the family trust, favoring his eldest son Lachlan as the successor. The other siblings, James, Elisabeth, and Prudence, are opposing this move as they were taken by surprise and have united against their father’s decision. The battle is being fought discreetly, with a trial scheduled for September to determine if Mr. Murdoch’s actions are in good faith. The outcome will impact the future of the influential media company. Legal representatives for both parties have been engaged for the upcoming trial.The succession battle over the Murdoch media empire has garnered significant attention due to its dramatic nature and the company’s substantial political influence. In 2018, Mr. Murdoch officially named Lachlan as his heir, ending years of speculation about his intentions for the business. However, this decision did not guarantee that Mr. Murdoch’s wishes would be upheld, as all four of his eldest children have an equal say in the company’s future through the existing trust.
The Murdoch family has experienced divisions in the past, with James, Elisabeth, and Lachlan vying for control at different times. James has since left the company to manage an investment fund, while Elisabeth runs a successful movie studio and maintains good relations with all family members. Prudence, the oldest child from Mr. Murdoch’s first marriage, has remained less involved in the family business and more private.
As Mr. Murdoch ages, the battle for control of his media conglomerates, including Fox News, The Wall Street Journal, and major outlets in Australia and Britain, is intensifying. Political differences within the family have added complexity to the situation, with diverging views on issues like Donald J. Trump’s presidency leading to tensions.
Mr. Murdoch’s attempt to amend the trust, known as Project Harmony, aimed to prevent a future family conflict but instead sparked anger among Elisabeth and Prudence. Despite efforts to gain their support, both expressed frustration with the proposed changes, indicating a deepening rift within the Murdoch family.Several days later, on December 6th, representatives of Mr. Murdoch proceeded with a motion to implement changes during a special meeting of the trust in Reno, Nevada. The three children’s representatives attempted to postpone the meeting and oppose the proposed changes but were unsuccessful, as per the court ruling.
This dispute has caused a rift between Mr. Murdoch and three of his children in his later years. None of them were present at his recent wedding to his fifth wife in California, except for Lachlan.
Although the trust is set in stone, there is a specific clause allowing modifications made in good faith for the benefit of all members. Mr. Murdoch’s legal team argues that he is safeguarding James, Elisabeth, and Prudence by preventing them from influencing Fox’s political stance or causing disruptions through leadership disputes.
The court decision highlights Mr. Murdoch’s concerns about potential disagreements among his children affecting the strategic direction of both companies, potentially leading to changes in editorial policies and content. His aim was to centralize decision-making authority in Lachlan’s hands, granting him permanent and exclusive control over the company.
It is evident from the document that Mr. Murdoch’s actions have united Elisabeth, Prudence, and James against him. They are collectively represented by legal counsel and are striving to maintain their influence in the company’s future, alleging that their father is attempting to marginalize them. They argue that Mr. Murdoch’s actions violate the original trust’s principle of equal governance and were not carried out in good faith.
This issue will be a focal point in the upcoming trial. The probate commissioner in Nevada, Edmund Gorman Jr., expressed in his ruling that a reasonable fact-finder could conclude that the decision to amend the trust was made with dishonesty or bad faith regarding the beneficiaries’ best interests.
The legal proceedings are taking place in a probate court in Reno, specialized in handling family trusts and estates. Nevada is a preferred state for family trusts due to its favorable probate laws and privacy safeguards. The court decision reviewed by The Times includes an assessment by a probate commissioner responsible for resolving such cases.The family trust holds the shares of Mr. Murdoch’s media empire, which is now split between two main companies: Fox, including Fox News and the Fox broadcast network, and News Corp, which owns his major newspapers.
All six of Mr. Murdoch’s children, including Chloe and Grace from his third marriage to Wendi Deng, have an equal share in the trust’s ownership, but the younger children do not have voting rights. Currently, the voting rights are held by representatives chosen by Mr. Murdoch and cannot outvote him. After his passing, Lachlan, James, Elisabeth, and Prudence will each have one vote.
Recent developments indicate that Mr. Murdoch is working to increase Lachlan’s voting power to ensure a majority and prevent challenges. This adjustment does not impact anyone’s ownership stake in the company.
In an effort to demonstrate that the change benefits all heirs, Mr. Murdoch has replaced long-time executives with more independent individuals as his representatives on the trust, including William P. Barr, a former attorney general under Presidents George H.W. Bush and Trump.
Mr. Barr is leading the efforts to amend the trust, stating at a special meeting that Mr. Murdoch believes Lachlan is best suited to continue the successful strategy of the companies due to his familiarity with them.
The foundation of the trust stems from Mr. Murdoch’s divorce from his second wife, Anna Murdoch Mann, who is the mother of James, Elisabeth, and Lachlan. He divorced her before marrying Ms. Deng in 1999.Ms. Mann was concerned about the potential harm of a family feud over succession, so she insisted on a divorce settlement that would give all four children equal control over the family empire, according to sources close to the family. To ensure this, Mr. Murdoch established an irrevocable trust to permanently secure this provision.
However, Mr. Murdoch later found this arrangement problematic after appointing Lachlan to lead Fox and News Corp in 2019, particularly due to tensions with his other son, James, who felt overlooked in favor of Lachlan. There have been discussions among people close to James and his wife Kathryn about potentially teaming up with Elisabeth and Prudence after Mr. Murdoch’s passing to challenge Lachlan’s control and influence over the companies’ conservative inclinations.
James and Lachlan had shared operational duties from 2015 to 2019, but their relationship deteriorated during the Trump administration due to disagreements over Fox’s favorable coverage of the former president. James eventually left the business when Lachlan took over as chairman and CEO in 2019, citing differences over editorial content. James and his wife, both vocal climate change activists, have occasionally criticized the family business publicly, expressing concerns over its coverage of climate change and the Capitol riots.
In 2019, Murdoch’s children, including those from his marriage to Ms. Deng, received substantial payouts from the sale of assets to Disney. They pledged to use part of this wealth for philanthropic causes like climate change and addressing technological authoritarianism.According to several of his colleagues, Mr. Murdoch has grown frustrated with James’ criticisms and complaints, as he feels that the family business, which he largely built himself, has made James and his siblings extremely wealthy. Court documents show that Mr. Murdoch’s representatives have labeled James as a problematic beneficiary in their own correspondence.
James had disagreements with his father and brother regarding Fox News, expressing concerns that its alignment with Mr. Trump for immediate ratings boosts could harm the overall long-term success of the parent company. Despite his efforts, James ultimately lost this battle before parting ways with them.
