Rupert Murdoch is in a ‘succession’ court battle – behind the scenes

The battle in a nutshell: Rupert Murdoch’s fortune is tied to controlling stakes in his two companies — News Corp., which owns properties like the New York Post and The Wall Street Journal, and Fox Corp., which owns Fox News and Fox broadcasting. network. Control of these stakes should have been divided between four of his children – Lachlan, James, Elisabeth and Prudence – when he died. But Rupert Murdoch recently tried to change those plans and hand full control to Lachlan Murdoch, who now holds the CEO title of both News Corp and Fox.

And yes, this is a lot like “Succession,” with good reason: The HBO series was partially based on the lives of the Murdoch clan.

There’s a lot going on here and it can be hard to understand. So I spoke with David Folkenflik, NPR’s media correspondent and Murdoch family expert, to explain how we got here, what’s happening now and what could happen next. Here are edited excerpts from our conversation.

From an outsider’s perspective, it seems like handing over a media empire that a guy ran to four of his kids when he dies is a recipe for disaster. Or at least a very good HBO show. Will it always end in some kind of knife fight?

Looking back on it, this is the logical result of a patriarchal setup, a family setup where the patriarch never understood how to show his love, often cut off controls to ease hurt feelings, and actively pitted his children against each other for his affection and respect through essentially corporate warfare.

To be clear, this is about how to divide a $6 billion fortune? Or is it about power and control?

I think both are at play. I think the question is who controls this, what was instilled in them – the only thing worth doing is running a strong company, just like dad.

I also think that James, in particular, seeming to be somewhat joined by his two older sisters, has a substantial critique of the way the company was run.

Especially Fox News, which has propelled so much of their fortunes, but has become increasingly right-wing and misguided in the age of Trump. Fox News accepted things it knew were not true about unsubstantiated claims of fraud in the 2020 race. Emails and texts from the time show Fox executives and Murdoch themselves knew they were not true and knew it was not what what is needed

James says this has been corrosive to American society and is a short-term financial play in pursuit of an intense but aging audience that won’t serve Fox well in an era of cord-cutting and streaming. It is not a plan for the future. This is his argument.

He made these arguments after he left the company and also after he lost the latest round of knife fights within the company and was locked out of getting a job at Disney as he thought he would. could have after. Fox sold most of its assets to Disney. Is this moment a coincidence?

And, as people I spoke to with ties to Rupert and Lachlan would point out, after James and all five other Murdoch children essentially received a $2 billion payout as part of the sale to Disney.

So James’s fortunes had greatly expanded as a result of that transaction, which he had favored and Lachlan had opposed.

But James had made this argument (about the direction of Murdoch’s holdings) from the inside as well. And so you can say that it’s opportunism, but you can also say that the events that played out kept intensifying, right?

He spoke of his dismay at the coverage of bushfires and climate change issues in Rupert’s native Australia in the Murdoch newspapers there and on Sky News there. But I think the claims of election fraud and January 6th — there was a constant drumbeat on Fox before January 6th and then afterwards it tried to exonerate and sort of honor the besiegers. at the US Capitol to try to stop the certification of Biden’s victory. It was a real moment.

That hearing will conclude sometime this week. Will we know what happens after that? Will there be some sort of public explanation of what’s going on?

To be determined? The probation officer in the case denied efforts by NPR and a group of other major news outlets to open the case. Great deference has been shown to the parties in this case to say that these proceedings should be private. Although most court proceedings, civil and criminal, are supposed to be public, it did not even identify the litigants involved. I think through corporate filings, reporting, and eventually announcements, this will become public. But the probate official has not yet indicated exactly how he will handle it.

Do we expect any ruling that comes out to be the final word? Can this be contested?

There is a period of time, I think a few weeks, in which either party, or perhaps both, if it is a mixed decision, can attack elements or the entirety of the decision. And those decisions can go to a probate judge and I think they can then go to the Nevada Supreme Court. It could be a matter of weeks or months or maybe longer. It shouldn’t take that long, but it could take quite a while.

If Rupert and Lachlan win, what will happen to Fox and News Corp after Rupert dies?

There has long been speculation that once Rupert dies, the possessions are in doubt. I think Lachlan would hope to find ways to continue. Maybe do some strategic selling to help them generate more money.

It would be one less full-fledged empire. It wouldn’t be what his father amassed over the decades.

News Corp has actually performed well in the years since the spin-off and rebranding of the companies after the Disney deal. Fox Corp. itself had a bumpy ride. It was up and down. It should be the more valuable asset because Fox News is at the center of it.

But we live in an age of cord-cutting and we live in an age of aging audiences, and it’s not clear that more of the same will work.

Throughout his career, Rupert Murdoch has always been willing to sell the assets he spent time and money acquiring. It seems that the thing he fundamentally valued the most, even if it wasn’t the most valuable thing in his portfolio, was news and news operations and the proximity to power they gave him. Do you think Lachlan shares the same affection for the news parts of News Corp and Fox?

I don’t think Lachlan is as ordinary as his father. He’s an amiable presence, but I don’t think he’s a natural or intense political player. I think he consults with important political figures, kind of echoing his father, but he’s not his father. He looks a lot like him now – as his father did decades ago – but he’s not his father. It is hard to see him playing the same role of force in the political sphere as his father.

And if James and his sisters win, what do you imagine will happen to the empire?

If they prevail and the trust remains, they now have a president and an executive chairman of the two corporations who just went to court to, in their minds, strip them of what was rightfully theirs.

So you draw up a scenario where you have three kids lined up against one. So I take control from it and then what do I do with the properties – keep running them? Sell?

They probably eliminate a bunch of them. I guess why would you stick with newspapers that are not profitable?

He might even wonder if now would be the time to sell The Wall Street Journal. It’s doing great financially right now, which isn’t true for a lot of work. So you can imagine they’re selling at a premium — just like the Disney sale, where they sold assets even before streaming undercut the value of many of these traditional entertainment properties.

Can you imagine them saying, is there anyone who would take Fox off our hands? Or can we put it in the hands of professionals who have an independent position in a way that people like Fox News CEO Suzanne Scott, who came through the system, might not?

So is there a scenario where they keep Fox News but dial it back from the right and center?

Make it conservative and not disturbed.

Murdochland tends to be a gossipy place. This is a closed-door hearing, but apparently nothing leaked from the courtroom. Am I missing something?

If you had routine leaks every day at this point, I think someone would have a pretty good chance of pissing off the test official who decided to keep things behind closed doors at a time when they’re in the game billions of dollars. I think that’s a pretty good incentive to not publicly troll the other side.