Murdoch Succession Drama Ends with $3.3-Billion Settlement
The closely watched Murdoch succession drama has come to an end with a $3.3-billion settlement, granting Lachlan Murdoch control of the family’s influential media assets, including Fox News, the New York Post, and the Wall Street Journal. This resolution marks the conclusion of a lengthy and tumultuous period of legal wrangling that had cast a shadow over the future direction of the television company and the Murdoch-controlled publishing firm News Corp.
Fox Corp. announced the “mutual resolution” of the legal dispute on Monday, with the dollar figure confirmed by a person familiar with the matter. The settlement brings an end to the succession battle that erupted into public view last year when three of Murdoch’s children attempted to block proposed changes to his trust, aimed at cementing Lachlan’s grip on power.
Background and Motivations
The 94-year-old mogul, Rupert Murdoch, had sought to ensure the conservative leanings of his media empire would continue under Lachlan’s leadership, who serves as chairman and chief executive of Fox. According to Lightshed Partners analyst Richard Greenfield, “Rupert sought to change the family trust arguing that without Lachlan in control, the conservative political bent of Fox News would be endangered.” With this settlement, the future of Fox News is now secure, and Lachlan’s control over the media assets is solidified.
Rupert Murdoch’s motivations for changing the trust were driven by his concerns over the more liberal tilt of his second son, James, and his desire to prevent a messy family fight after his passing. The family’s fissures and factions were exposed during the wrangling, with James, Elisabeth, and Prudence sharply at odds with their father and Lachlan for much of the last year.
Terms of the Settlement
As part of the settlement, Prudence, Elisabeth, and James have agreed to relinquish their shares in the family trust and give up any roles going forward. The current trust will be dissolved, and two new trusts will be established. One trust will benefit Lachlan Murdoch and Rupert Murdoch’s two youngest daughters, Chloe and Grace Murdoch, while the second trust will benefit Prudence, Elisabeth, James, and their descendants.
Fox Corp. has announced a public offering of 16.9 million shares of Fox Corp. stock, currently held by the Murdoch Family Trust. The proceeds from this sale, along with the sale of 14.2 million shares of News Corp.’s Class B common stock, will help fund the new trust. Each of the three departing siblings will hold a share currently valued at $1.1 billion.
Implications and Future Directions
The settlement marks a significant turning point in the history of the Murdoch media empire. With Lachlan Murdoch firmly in control, the company is expected to continue its conservative leanings, and the future of Fox News is secure. The Fox board of directors has welcomed the developments, expressing confidence in Lachlan’s leadership and vision.
Rupert Murdoch will remain the company’s chairman emeritus, and the family will sell nonvoting Class B shares while holding on to their voting shares and control. During a six-month period following the stock sales, James, Prudence, and Elisabeth will be expected to sell their personal holdings in FOX and News Corp. to sever all ties with the companies.
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