This week, Rupert Murdoch will take his own children to court in scenes reminiscent of the hit HBO drama Succession. Reminiscent, perhaps, because the show was based on the Murdoch family itself (ironically, the show is only available to watch in Australia on the Murdoch-owned streaming service Binge). Much like the television saga, the family drama engulfing the world’s most powerful media conglomerate has taken many a twist and turn.
As the court case begins this week in the provincial gambling haven of Reno, Nevada, the future of the Murdoch empire hangs in the balance.
Who are the Murdoch children and what is the Murdoch Family Trust?
Rupert Murdoch has six children.
- Prudence, born 1958 to Rupert’s first wife Patricia Booker
- Elisabeth, born 1968 to second wife Anna Maria dePeyster
- Lachlan, born 1971 to dePeyster
- James, born 1972 to dePeyster
- Grace, born 2001 to third wife Wendi Deng
- Chloe, born 2003 to Deng
Rupert, who stepped down last September as chair of News Corporation and Fox, named as his successor his eldest son, Lachlan, who became the sole chair of News Corp while continuing to lead Fox. Four of Rupert’s six children have voting shares in the Murdoch Family Trust, which holds roughly a 40% stake in the voting shares of News Corp and Fox, collectively worth US$32.7 billion.
The Trust, created after Rupert’s divorce from Anna Maria DePeyster in 1999, currently has eight votes. Four are controlled by Rupert himself, and the remaining four by the four children from his first two marriages: Prudence, Elisabeth, Lachlan and James. The youngest two children from Rupert’s third marriage, Grace and Chloe, don’t have voting rights.
On Rupert’s death, the trust currently states that the four votes controlled by Rupert will be equally distributed to the four other vote-holders.
What are they fighting over?
The vote distribution is what Rupert is trying to change. The children have diverging views on a number of things, including how they feel the Murdoch media empire should be run. Lachlan, the eldest son, is the most conservative of the four children, and has been seen as heir apparent for many years.
James, in contrast, has been publicly critical of News Corp’s editorial direction on several issues. After the 2020 Black Summer bushfires, for example, a spokesperson for James and his wife Kathryn told The Daily Beast their “views on climate are well established and their frustration with some of the News Corp and Fox coverage of the topic is also well known”.
James left the News Corp board of directors in July 2020 over “disagreements over certain editorial content published by the company’s news outlets and certain other strategic decisions”, according to his resignation letter.
He contrasts with older brother Lachlan, who at the age of just 22 — having been born in London, raised in New York City and freshly graduated from Princeton — was appointed to general manager of Queensland Newspapers, the publisher of Brisbane’s Courier-Mail, and after a year was the publisher of the national broadsheet The Australian. By 29, he was deputy COO of News Corporation.
Why are they in court?
Rupert has been secretly trying to change the terms of the family trust in order to give Lachlan sole control of the trust. According to court documents obtained by The New York Times, Rupert argues that Lachlan should have control of the family’s investments in a number of assets including Fox News, The Wall Street Journal, the New York Post, The Australian, the Sun and the Times.
Rupert argues that Lachlan’s conservative views are essential to the business success of the media empire, according to the documents. The probate commissioner in charge of the case, Edmund Gorman, has determined that Rupert is entitled to change the trust on one key condition — that the alterations are solely made for the benefit of all of his heirs.
Who’s in with a chance?
The hearing this week will hear evidence in relation to Rupert’s motive, but the argument being made is new, according to trust law expert and lecturer at Sydney Law School, Dr Derwent Coshott.
“It’s a very novel argument, because the idea that you would have to favour one of the beneficiaries over the others in order to ensure the benefits of all the beneficiaries is very odd,” Coshott told Crikey.
“It’s a very weak argument that somehow the trust can be rewritten to cut down the interests of beneficiaries in favour of one (person).”
