In a scene that might have been portrayed in the fictional TV series, Succession, a district court in Nevada in the US has ruled against media mogul Rupert Murdoch’s bid to change his family trust and transfer control to his eldest son.
The move by the former chairman of Fox Corp and News Corp had set him at odds with three of his other five children, sparking a real-life power battle within the family, similar to the HBO series’ storyline, which focuses on how the family members of a global media conglomerate fight for control.
The Murdoch Family Trust was created in 1999 and includes Fox News and News Corp. It is currently set to be divided between four of 93-year-old Murdoch’s children – 66-year-old Prudence from his first marriage and 56-year-old Elisabeth, 53-year-old Lachlan and 51-year-old James from his second marriage – after his death. The business tycoon also has two other children named Grace and Chloe from his third marriage, but they do not have any voting rights in the trust.
So what has led to this legal fight and family drama?
What did the court decide?
According to a New York Times report on Monday, Nevada Probate Commissioner Edmund J Gorman Jr ruled that Rupert Murdoch and his eldest son, Lachlan, had acted “in bad faith” by trying to change the trust agreement.
In a 96-page opinion, the commissioner found that the pair’s plan to change the terms of the trust was a “carefully crafted charade” to “permanently cement Lachlan Murdoch’s executive roles” of the empire, without considering the implications it would have on the other three children’s ownership rights.
Adam Streisand, a lawyer for Rupert Murdoch’s side of the case, told the New York Times that while he and Lachlan are disappointed in the outcome, they intend to appeal the court’s ruling.
Commissioner Gorman’s finding is not a final court ruling. A district judge will now consider the case before a final ruling can be made – a process that could take months.
Murdoch’s other three affected children – James, Elisabeth and Prudence – welcomed the commissioner’s decision and, in a statement, said that they hoped that the family could “move beyond this litigation to focus on strengthening and rebuilding relationships among all family members”.
What led to the court case?
A lack of consensus about the trust’s future ownership among Murdoch’s four children led to the sealed court proceedings in Reno, Nevada, which began in September.
According to the New York Times, which has obtained a copy of the proceedings, it was in fact an episode of the HBO series Succession, which many claim is based on the Murdochs, that triggered the legal proceedings.
The Murdoch children had apparently watched the third episode of the final season of the series, in which Logan Roy, the patriarch of the family in the series, dies, leaving his family and business in chaos. This led them to start discussing the future of the Murdoch Family Trust’s ownership after their father’s death, according to court proceedings.
A lawyer representing Elisabeth Murdoch soon sent out a “succession memo” to prevent the fictional episode from the series from becoming a reality.
What do Rupert and Lachlan want?
Rupert Murdoch, who is known for his backing of right-wing stalwarts including US President-elect Donald Trump, hopes this stance will continue under Lachlan’s leadership.
After retiring last year, he named Lachlan – who was already the CEO of Fox Corporation, which owns the right-wing US network Fox News – as his sole heir to News Corp.
According to the Times report, the commissioner’s ruling said that when it came to the trust bid, it was Lachlan who initiated the plan to change the trust’s ownership last year, referring to it as “Project Family Harmony”. The ruling also stated that Rupert Murdoch and Lachlan considered James the “troublesome beneficiary” and believed that, through this project, they could take control of James’s shares in the trust.
Rupert Murdoch and Lachlan introduced their plan at a special meeting of the trust sometime late last year and, according to statements from that meeting and text messages between the siblings that have been seen by the court, Rupert Murdoch said: “I love each of my children, and my support of Lachlan is not intended to suggest otherwise. But these companies need a designated leader and Lachlan is that leader.”
A text message from Lachlan to Elisabeth on the morning of the meeting, which the court saw, read: “Today is about Dad’s wishes and confirming all of our support for him and for his wishes. It shouldn’t be difficult or controversial. Love you, Lachlan.”
What do the other three children want?
James and Elisabeth have long been a part of the Murdoch business, with James being trained alongside Lachlan to succeed his father in the past.
Prudence has kept her distance from the business and has, instead, built her own legacy as a philanthropist, supporting charitable work and environmental causes.
James, who was CEO of 21st Century Fox, the film and entertainment arm of the business that was acquired by Walt Disney in 2019, resigned from News Corp in 2020, stating “editorial differences” with the company. He now runs a private investment group, Lupa Systems, which is headquartered in New York City and has a branch in India.
Elisabeth is the founder and chair of Locksmith Animation and also is co-founder of SISTER, a global content company. Neither group has links to News Corp.
Media observers consider James and Elisabeth to be more liberal politically than Lachlan, which is what they believe has caused their father to pick Lachlan as his sole heir, with the hopes that his media empire’s right-wing stance will endure.
While the other children did not contest his naming of Lachlan as the sole heir of News Corp when he retired, his move to change the ownership of the trust appears to have angered them.
According to court proceedings, James, Elisabeth and Prudence argued that they were being cut off from their own family’s trust. According to the court decision, they had “disavowed any plan to oust their brother” Lachlan.
Commissioner Gorman sided with the siblings and said: “The effort was an attempt to stack the deck in Lachlan Murdoch’s favour after Rupert Murdoch’s passing so that his succession would be immutable. The play might have worked; but an evidentiary hearing, like a showdown in a game of poker, is where gamesmanship collides with the facts and at its conclusion, all the bluffs are called and the cards lie face up.”
Is this the first time there has been drama in the Murdoch family?
Disputes in family-owned businesses are common, and the Murdoch family is no exception.
Before the current legal case, in 2010 and 2011, a phone-hacking scandal rocked the family.
That began in 2009 when the United Kingdom’s Guardian newspaper revealed that journalists at the now-defunct News of the World, owned by Murdoch, had gained access to the messages of “two or three thousand” private mobile phones with the help of private investigators. A year later, the Guardian once again reported cases of phone hacking, triggering a public inquiry into the media group’s ethics in 2011.
James was the chairman of British newspaper publisher News International back then, and Elisabeth, who is now aligned with James, had asked her father to fire him over the scandal. The Murdoch family settled the phone hacking scandals in 2012 by paying damages to 36 high-profile phone-hacking targets.
