Murdoch’s succession war is over, but family trust is gone

Peace has broken out in the Murdoch succession wars. It is not the ending that the writers of the TV series Succession would have contrived. It is one that owes more to commercial logic than dramatic licence.

Lachlan will inherit clear control of the Murdoch empire when Rupert dies, and his three siblings – Prudence, Elisabeth and James – will each receive an exit payment of $US1.1 billion, roughly 80 per cent of the current value of the stock, and they will no longer be part of the Murdoch Family Trust.

The “irrevocable” trust was drawn up in 1999 under the shadow of Rupert’s pending divorce from his second wife, Anna, and before his marriage to his third wife, Wendi Deng. Anna surrendered some of the money she could have commanded to secure control of the company for Rupert’s four existing children, safe from any future heirs.

The original trust had not envisaged acute conflict between the four siblings. In the face of ongoing conflict between Lachlan and James, in late 2023 Rupert moved to change the trust to ensure that Lachlan would succeed him and not be challenged by the other three. Without any hint of irony, they called it Project Family Harmony.

The trust arrangement could only be changed if it were to the benefit of all members. Rupert and Lachlan argued that his control of the company, in its conservative orientation, was necessary for ongoing success, and so it was in the interest of the three “objecting children”, as they were called in court, to surrender the power the trust gave them. They, not surprisingly, did not agree.

The secrecy surrounding the suit was sensationally broken the following July by The New York Times. As a result, when the family all attended what had been intended as a secret trial in September in Nevada, there was a crush of media waiting outside. The probate commissioner ruled decisively against Rupert and Lachlan, and this immediately became public.

Rupert and Lachlan’s action was hopelessly counterproductive. Given that any change had to be beneficial to all members and that three of the four affected members declared they were against it, it was an action that always had almost zero chance of success.

The conflict between Lachlan and James was prolonged and probably irreconcilable. Elisabeth’s and Prudence’s views seemed more fluid. But both were shocked, and both opposed Rupert’s action. “I felt so violated and forsaken,” Elisabeth said, according to The New York Times. “You are completely disenfranchising me and my siblings,” she told Rupert. “You’ve blown a hole in the family.”

The action further sharpened the lines of family conflict, with the other three siblings now far more solidly locked in against Lachlan, and the judgment made their bargaining position much stronger. Rupert and Lachlan immediately launched an appeal, which will now be shut down.

According to The New York Times, even after the trial, the three “objecting children” reached out at a personal level to Rupert: “Thanksgiving and Christmas are upon us and the three of us wanted to reach out to you personally to say that we miss you and love you,” they wrote. “Over and above any other feelings all of us may have – of upset and shock – our unifying emotion is sorrow and grief.”

Maybe they could try to talk things out without lawyers and probate commissioners – and reach a compromise they all agreed on: “We are asking you with love to find a way to put an end to this destructive judicial path so that we can have a chance to heal as a collaborative and loving family.”

A couple of days later, Rupert wrote back. He’d read his children’s testimony from the trial twice over. “Only to conclude that I was right,” he told them. He instructed them to have their lawyers contact his if they wanted to talk further. “Much love, Dad.”

A new trust has now been drawn up, lasting until 2050 instead of the original 2030, omitting three of the original four members, but including Murdoch’s two daughters from his third marriage, Grace and Chloe, with Lachlan to inherit control.

Beyond the family battles and the business arguments, Rupert tried to tie the outcome to a larger cause. He wrote to his former wife, Anna, that it would be a “disaster” for the country if Fox News were to fall into the wrong hands. He said that “Fox and our papers are the only faintly conservative voices against the monolithic liberal media. I believe maintaining this is vital to the future of the English-speaking world.”

The idea that the future of the English-speaking world depends on Fox News is not the most reassuring of scenarios.

So far, the perspectives on succession have been largely focused inside the family. But they are not the only relevant players in the Murdoch empire. The idea that corporate control in the 21st century should be decided by inheritance rather than ability and achievement is anachronistic.

Both Fox and News Corp have two divisions of shareholders. This allows Murdoch to have around 40 per cent of votes with less than half that in shareholder value. There have already been some attempts by shareholders to change this. The founder and builder of an empire enjoys a status and reputation which cannot be simply transmitted to his successor. It may be that at some time shareholders will force the Murdoch empire to complete the transition from feudalism to capitalism.

Rodney Tiffen is emeritus professor in government and international relations at the University of Sydney, who has written widely on political communication and the Murdoch media.

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