Murdoch Family Trust: The real battle over succession has yet to begin

When Lachlan Murdoch, the eldest son of media titan Rupert Murdoch, was named the sole chairman of News Corp and Fox Corp on Thursday, the announcement put to rest immediate questions about who will run a sprawling media empire that includes some of the most powerful brands in the world.

The executive transition, however, does not settle another potential power play that could occur upon Rupert Murdoch’s death, as framed by a document called the Murdoch Family Trust.

The Reno, Nevada-based trust lays out a scenario through which a potential takeover could occur. It is the vehicle through which the elder Murdoch controls News Corp and Fox Corp, through a roughly 40% stake in voting shares of each company. Murdoch also holds a small amount of shares of the companies outside of the trust.

Upon Rupert’s death, News Corp and Fox Corp voting shares will be transferred from Murdoch to his four oldest children – Prudence, Elisabeth, Lachlan and James – creating a scenario in which three of the children could out-vote a fourth, potentially setting up a battle over the future of the companies, even as Lachlan Murdoch runs Fox Corp and is the sole chair of News Corp.

This tension would likely play out over the future of Fox News, one of the most polarizing properties in the Murdoch empire, and an influential force in U.S. politics, particularly among Republicans who prize Fox’s conservative-leaning audience.

While Lachlan Murdoch does not speak publicly about his political views, James Murdoch has been more forthright. In January 2020, he and his wife Kathryn took aim at both News Corp and Fox Corp for downplaying the impact of climate change, widely viewed as a contributing factor to the Australian bushfires, in a statement to The Daily Beast.

In a July 31, 2020 letter tendering his resignation from News Corp’s board of directors, which was disclosed in a News Corp filing, James Murdoch said he was resigning “due to disagreements over certain editorial content published by the Company’s news outlets and certain other strategic decisions.”

Multiple media outlets, including the New York Times, Vanity Fair and the Financial Times, have reported on tension between the brothers over the direction of Fox and other family-controlled media outlets.

In a 2021 FT interview, James Murdoch appeared to slam the channel without naming Fox News in comments about the Jan. 6 U.S. Capitol siege. “The sacking of the Capitol is proof positive that what we thought was dangerous is indeed very, very much so,” he said. “Those outlets that propagate lies to their audience have unleashed insidious and uncontrollable forces that will be with us for years.”

The Murdoch Family Trust has eight votes: four of which are controlled by Murdoch, and the remaining four controlled by the four children from his first two marriages. Murdoch’s youngest daughters Chloe and Grace, from his third wife Wendi Deng, do not have voting rights in the trust.

Upon succession, the four older children will equally inherit Murdoch’s voting shares in the trust, according to Alice Enders, head of research at Enders Analysis.

In addition to shares in News Corp and Fox, the trust also includes the Cruden family farm near Melbourne and Murdoch’s art collection, according to a January 2023 Financial Times report.

Fox and News Corp have a dual-share system, with non-voting Class A shares and voting Class B shares. The shares in Fox and News Corp owned by Murdoch’s children through the trust are a combination of both classes of shares.

“It’s not like a real succession scenario right now, this minute,” said Enders. “It’s more in the future I’d say.”