The Murdoch family succession drama enters a new phase in a Reno, Nevada, courtroom this week when patriarch Rupert Murdoch will probably argue that plans by three of his children to potentially change the business model of the news-communications empire will damage the interests of Fox Corp shareholders.
Sadly for followers of the intense and labyrinthine Murdoch family drama – one that partly inspired the fictional HBO series Succession and many of its plot lines – the arguments and testimony stemming from the bitter feud will not be in public view.
Last week, the Nevada judge David Hardy ruled against a petition by a coalition of media companies to unseal the case – obscurely named Doe 1 Trust, PR23-00813 – writing: “A family trust like the one at issue in this case, even when it is a stockholder in publicly traded companies, is essentially a private legal arrangement, as the applicable sealing statues recognize.”
Some details will probably leak, as they did in July when the New York Times obtained documents relating to Murdoch’s petition to change, or “decant”, an irrevocable trust set up to pass controlling stakes in the Fox Corp empire to the four children from his first two marriages – Prudence, James, Elizabeth and Lachlan – after his death.
Murdoch wants to give all voting power to his oldest son, Lachlan. If his plans are accepted, Murdoch’s other adult children will lose their voting power. The key thing for most observers is that Lachlan is the most politically aligned with his rightwing father while the other siblings have expressed reservations about the direction of the companies, especially during the rise and fall – and possible rise again – of Donald Trump.
Murdoch must convince the Nevada probate commissioner, Edmund Gorman, that empowering Fox Corporation’s executive chair and CEO, Lachlan, to run the company without interference from the other siblings and maintain the properties’ conservative tilt will maintain News Corp’s commercial value for all his heirs, including two daughters – Chloe and Grace – he shares with his third wife, Wendi Deng.
How the scope of those arguments, including the potential for argument on the relative merits of the siblings in terms of business acumen, are unknown.
Murdoch, 93, announced a year ago that he was stepping down as chairman of Fox Corp and the newspaper company News Corp, and handing the reins to Lachlan. That came three years after he got a $71bn top-dollar price from Disney for entertainment-focused 21st Century Fox, with the four mainline beneficiaries receiving $1bn each from the proceeds of the sale.
In terms of business savvy, Lachlan has in his corner the streaming service Tubi, which Fox purchased for $440m in 2020 and turned down an unsolicited $2bn offer three years later. Last week, Lachlan discussed a new sports bundler, Venu, a partnership with Disney, Warner Bros Discovery and Fox, that he said was “designed entirely for the cord-cutters and cord-nevers”.
James Murdoch, who has donated to progressive political groups, resigned in 2020 from the News Corp board, citing disagreements over editorial content. He has also criticized the US media for amplifying disinformation about the 2020 election results which Trump has repeatedly falsely claimed were “rigged” – a claim boosted by Fox News pundits.
The New York-based James is an angel investor, and holds board seats in three companies including Tesla, the AI-focused Rebellion Defense and the publishing firm AWA. He recently added his name to a letter of 88 business leaders endorsing Kamala Harris for president.
If the Nevada case turns on ensuring the future value of the family business then the supporting argument centers on the political direction of Fox and News Corp, which includes Fox News, Fox Nation, the Times of London, the Wall Street Journal, the Australian and the New York Post.
In the case of Fox News, a perennial bugbear of the political left, Murdoch’s argument would appear straightforward: its success and power relies on being rightwing.
According to its own estimates, Fox News delivers 1.3 million viewers across daytime programming , beating CNN by 176% and MSNBC by 58% with total viewers. During prime time, when cable news stations switch over to opinion broadcasting, Fox News averaged 2 million viewers, or a 267% advantage over CNN and a 77% advantage over MSNBC.
In terms of revenue, Fox News’ $3bn was double that of CNN and two-thirds more than MSNBC’s, with profits approximately mirroring that breakdown, in 2022. But all cable news networks are looking at the same threat to revenue from a declining linear TV market due to ageing audiences and a dwindling number of cable TV subscribers, the so-called cable cutters.
According to Robert Thompson, media professor emeritus at Syracuse University, Murdoch’s reason for amending the Murdoch family trust is to protect the value of Fox News and to argue that to change its political direction would be to compromise that value.
“It’s a clever argument,” Thompson says. “CNN had the pie to itself before the Fox News and MSNBC came in in the 1990s, and Fox figured out early in the game that they didn’t need even 4 million people watching and they’d be No 1 with a million and a half people watching each night.”
That meant figuring out how to get a certain slice of the population to watch not just breaking news, the CNN model, but to keep those numbers up by appealing to a small but dedicated base audience. MSNBC plays by the same rules, albeit from the other side of the political spectrum.
“The change would be giving away a successful model to one less successful,” Thompson says.
In seeking to have the case unsealed, a coalition of media organisations argued that the level of secrecy “does not pass constitutional muster” and should be open to the public because its outcome could affect thousands of jobs, media consumers and the political landscape.
Failing to persuade commissioner Gorman, news outlets have been left to pick at the legal effort, dubbed Project Harmony, via stray rulings. Those suggest that one thing unites the fractious Murdochs: blocking media access to the court hearing.
That, of course, is laden with ironies, not least that the newspaper side of the business has paid out millions to settle claims of press intrusion and that in any other case Murdoch media properties would be fighting to obtain access.
Certainly, the fight between a dominant, empire-building father and his divided offspring is a classic media trope. Just look at the success of Succession, a critical and audience smash hit that explored just such themes through its fictional Roy family.
It is also a classic case of an argument that could only happen to a billionaire family.
“Rupert Murdoch made enough money that his kids could comfortably revolt against him,” says Thompson. “If you are completely set up in terms of financial stability, you can have ideas other than simply protecting the empire, and you don’t need Dr Freud to tell you that other elements get put into play beyond bottom-line financial results.”
He adds: “It takes a lot of privilege to be able to tell Dad to go take a hike.”
