The Murdoch family’s legal battle over a media empire: What you need to know

The Murdoch family's legal battle over a media empire: What you need to know

As a seasoned film critic who has watched countless dramas unfold on both the silver screen and the political stage, I find myself captivated by this real-life soap opera playing out in the hallowed halls of the Nevada courtroom. The Murdoch family’s battle for control over their media empire is reminiscent of a Shakespearean tragedy, with its complex web of power, ambition, and familial strife.

The fight for the future of Rupert Murdoch’s media empire begins Monday in a Nevada courtroom.

Instead of directly altering the trust, which cannot be undone, the 93-year-old influential media figure is requesting to amend it so that upon his passing, his eldest son, Lachlan, will hold sole authority over News Corp. and Fox Corp., his media firms.

News Corporation controls significant media outlets including the Wall Street Journal, New York Post, Investor’s Business Daily, and Dow Jones. Fox Corporation, on the other hand, oversees Fox News and the Fox television network.

However, three other children of Rupert Murdoch are not content with the proposed modification and have joined forces in opposition to Rupert and his son Lachlan, as reported by documents obtained by The New York Times and reports from The Wall Street Journal. Originally, Lachlan and James, Elisabeth, and Prudence Murdoch were intended to share control of the businesses equally under the current trust arrangement.

This situation has paved the way for an intense, behind-the-scenes family power struggle, which has primarily unfolded in private.

Fox Corp. declined to comment. News Corp. did not respond to a request for comment.

Lloyd Greif, president and CEO of Greif & Co., stated that Lachlan is seen as Rupert Murdoch’s chosen successor, and he appears anxious about how things might evolve if Murdoch can no longer wield power. Essentially, it seems that Lachlan desires to maintain influence over his legacy even after Murdoch passes away.

Why does Rupert Murdoch want to make this change?

Rupert asserts that the alteration is crucial to uphold the businesses’ traditional editorial viewpoint, thereby safeguarding their monetary worth for all the Murdoch descendants.

Lachlan is recognized for upholding his father’s conservative political beliefs, and since the past year, he has been the lone chairman of News Corp., while also holding the position of Executive Chairman at Fox. In contrast, his other three siblings lean more towards political moderation.

Although the three parties may be working together to oppose the trust’s transformation, it doesn’t automatically imply that they all share a common vision regarding the companies’ future, as stated by Greif.

“All that means is that they want to be able to have a say,” he said. “At the last minute here, Rupert, age 93, is trying to change the rules of the game.”

Would changing the editorial bent affect business?

It’s very possible, particularly for Fox.

In the realm of cable television, I found myself last year witnessing Fox holding onto its throne as the most-viewed network for an astounding eight years in a row. However, it’s worth noting that the average viewership figures took a dip, especially after the high-profile departure of prime-time host Tucker Carlson from the network following some contentious events.

Anthony Adornato, chair of the broadcast and digital journalism department at Syracuse University’s Newhouse School of Public Communications, stated that a more moderate stance could influence Fox News coverage, affecting their financial status. He explained this by saying they thrive mainly due to their ability to draw an audience.

I’m uncertain if the three moderately inclined Murdoch relatives might strive to shape the network’s political leanings, but there’s a chance they could opt to preserve the conservative stance due to its financial viability, as Adornato suggested.

However, it’s important to note that the political biases within the trust aren’t the only factor at play; the voting structure itself can significantly impact a company’s profitability. If the management of a family business is concentrated among four individuals, potential conflicts could arise if they are not in agreement, as pointed out by Greif.

In today’s highly competitive media market, standing still could lead to losing market position and decreasing shareholder value,” he pointed out. “On the other hand, giving too much control to one individual can also be risky if their decisions steer the company towards disaster. I must admit, I wouldn’t want to be in the shoes of that probate judge making this difficult decision.

Why is this being settled in Nevada?

The privacy afforded by Nevada’s family trust regulations is such that many conflicts like this one remained unacknowledged until now.

Discourse surrounding this issue started during the summer months, as the New York Times gained access to a 48-page confidential court document detailing the trust dispute.

Various news organizations such as the Washington Post, CNN, and Associated Press had requested to make the hearing public and unveil related documents, stating that this was beneficial for the public. However, on Thursday, Nevada Probate Commissioner Edmund J. Gorman Jr., mostly denied this motion, and surprisingly, the Murdochs weren’t mentioned in it.

In his ruling, Gorman stated that a family trust, similar to the one under discussion in this particular case, functions much like a personal legal agreement, regardless of its ownership of shares in publicly traded companies. This is because it aligns with the sealing statutes that acknowledge such privacy.

He cited the original order that sealed the documents and closed court hearings, which stated that “the proceedings themselves will reveal confidential personal, financial, and business information of the Trust and its beneficiaries or other family members who the Trustee serves.”

Nonetheless, details about the trial’s sequence, with the trust identified as “Trust Doe 1,” can be found on the court’s official site. The scheduled evidence hearing will commence on Monday at 9 a.m., Pacific Time.

2024-09-16 13:31

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