Rupert Murdoch plan to give control to son Lachlan triggers family legal battle

Media titan seeks to amend trust through which he controls News Corp and Fox.

Rupert Murdoch flanked by his sons Lachlan, left, and James. Picture: Getty Images

Rupert Murdoch is engaged in a legal fight with some of his children, as he tries to hand control of his media empire to his eldest son, Lachlan, a battle with major ramifications for the future of the mogul’s two companies.

Murdoch, 93 years old, controls a trust that holds the family’s substantial stakes in News Corp, parent of The Wall Street Journal, and Fox News parent Fox Corp. Under its terms, when Murdoch dies, voting control would pass to four children – Lachlan, James, Elisabeth and Prudence.

Recently, the elder Murdoch sought to amend the trust to consolidate power in Lachlan Murdoch’s hands, according to people familiar with the situation. He encountered stiff resistance from the three other children who were slated to inherit some control of the trust.

That has sparked a legal battle that is playing out in a Nevada probate court, a person familiar with the case said. Murdoch has argued that the changes he is seeking to make to the trust are warranted because they will be in the interest of all stakeholders, some of the people familiar with the situation said.

The New York Times earlier reported on the legal battle within the Murdoch family.

Any restructuring of the trust would have significant implications for decision-making at the top of the Murdoch empire, including any major mergers or other strategic transactions News Corp and Fox pursue.

As it stands, the siblings would each have a say on how to exercise influence with the family’s roughly 40% voting stakes in each company. If Lachlan Murdoch consolidates control of the trust, he could move faster to push the company in his desired direction.

The family battle has been years in the making. Murdoch has always sought to keep his media enterprise in the family’s hands, and he brought several of his children into the business over the years. At one point he dubbed Lachlan “first among equals”, and as time went on that became apparent.

Rupert Murdoch at the Republican National Convention earlier this month. Picture: AFP

Lachlan began his career at News Corp in 1994 and rose through the ranks. He abruptly left in 2005 after clashing with other senior Fox executives and feeling undercut by his father, but returned years later, and continued his climb, eventually becoming the CEO of Fox.

James, Murdoch’s younger son, once seemed to be the heir apparent. But relations between him and his father deteriorated over the years, and after Lachlan returned and the elder Murdoch sold a chunk of Fox to Disney in 2019, James’s career hit a roadblock.

Recently, James had begun to tell associates that he could gain effective voting influence over the trust by operating in a bloc with his sisters, some people familiar with the situation said. Inside Rupert Murdoch’s orbit, there was scepticism about whether James could execute such a power play, but it was viewed warily.

James has been critical, at times, of Murdoch-owned media outlets. When he left the News Corp board in 2020, he said it was “due to disagreements over certain editorial content published by the company’s news outlets and certain other strategic decisions”. He and his wife, Kathryn, are ardent environmentalists who have designed their philanthropy and investing around fighting climate change and reshaping the democratic process to stop incentivising hyperpartisanship.

James and Kathryn Murdoch have been particularly concerned by what they see as an extreme turn Fox News took in the age of Donald Trump, according to people familiar with the matter.

Rupert Murdoch stepped down as chair of News Corp and Fox in November 2023, leaving Lachlan as sole chair of News Corp and executive chair and CEO of Fox.

Elisabeth Murdoch held various positions at News Corp, before launching a TV production company, Shine, that she sold to the family company in 2011. She later launched another production outfit, Sister. Prudence, Murdoch’s oldest child, has played a relatively quiet role inside News Corp and Fox.

Murdoch made a push in 2022 to reunite the two wings of his empire through a merger. But he backed away from the plan, which drew resistance from some major investors.

The Wall Street Journal