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Murdoch family drama plays out in court with fate of Fox News at stake
If #Rupert #Murdoch, 93, prevails in his legal effort to change voting rights of the #family #trust
to ensure that his chosen successor and conservative-leaning eldest son, #Lachlan Murdoch, 53, runs the company after his death, little may change.
The proceedings pit Murdoch, 93, and his chosen successor, Lachlan, against his three more liberal-leaning siblings, Prudence, Elizabeth and James,
over future control of Murdoch’s #Fox Corp and #News Corp through the family’s control of the global empire’s share structure via an irrevocable trust set up in 1999.
According to the Murdoch-owned Wall Street Journal, Murdoch is arguing that
“shifting voting control of the trust to Lachlan should be allowed because it is in the best interest of all the beneficiaries, including his other children”.
️But if the patriarch loses, the younger brother #James Murdoch, in concert with his sisters #Prudence and #Elizabeth, could force Fox News to move away from the conservative news alignments of their father and brother.
That would be an earthquake in American politics.
No other media power in the US has the impact that Fox News has had in the last two decades.
It has become a driving force of American conservatism, feared for its power by both Republicans and Democrats.
And condemned by many for its conservative bias and numerous show hosts who have become darlings of the US right and powerful players on their own.
Figures such as Sean #Hannity are hugely powerful within the Maga world, while the former host Tucker #Carlson
– now exiled from the station where he rose to power
– has withered outside it and been largely unable to recreate the influence he had while broadcasting to Fox’s viewers.
Gaming out the different scenarios at stake in Reno is water cooler talk at Fox News’s midtown New York headquarters,
with TV hosts discussing a reposition of their own personal brands if liberal-leaning James wins
and opening back-channel communications with him if his father and rival brother prevail.
But despite their immense importance the legal arguments over the Murdoch Family Trust presented within the impenetrable walls of a 1960’s annex court extension in Reno last week are known only to the judge and court staff, Rupert Murdoch, his first and second set of children and an army of lawyers, including Trump’s attorney general William Barr.
“A family trust like the one at issue in this case … is essentially a private legal arrangement,”
the Washoe county probate commissioner Edmund J Gorman Jr, wrote in an 18-page recommendation before the parties convened.
James, Elisabeth and Prudence, want the trust to be maintained and oppose Murdoch’s proposed change giving Lachlan control because they would stand to lose voting power.
Yet while Lachlan’s politics are comfortably rightwing and match his father’s,
the opposing other siblings have a different world view.
James Murdoch even hosted Joe #Biden in his home for a fundraiser in 2022 and
has endorsed #Kamala #Harris to beat Trump in 2024.
But it won’t be Fox politics under discussion so much in Reno.
Instead, much of that argument will be couched in an examination of US corporate governance conventions that allow for a family to control a business they do not majority own by a so-called #dual #class structure of shares
– in effect the family shares have more power than others.
https://www.theguardian.com/media/2024/sep/22/murdoch-family-fox-news-court?CMP=Share_iOSApp_Other
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For example, #Rupert #Murdoch owns 17% of equity in the media empire 
and 39% of the voting power.
“The fight for control of the Murdoch empire is only magnified by the #dual #class structure,” says Charles Elson, a leading authority on US corporate governance issues.
“The idea is I am the smartest person in the world and I should run the company as its king.
Other shareholders can say we believe you. If that’s a condition of investing, so be it.”
But critics of unequal dual-class voting say the structure weakens executive accountability.
“That’s the problem – it basically destroys #accountability,” says Elson.
Passing that power on generationally, he adds, only makes it worse.
“How do you know the talent is genetic?
Simply because they’re the children doesn’t mean they have the same business acumen as the father
and it’s not how you pick the leader of a company or a country.”
The Murdoch biographer and antagonist #Michael #Wolff wrote recently that the late Fox News chair and CEO #Roger #Ailes told him that the Murdoch sons,
Lachlan and James,
“are both wannabe little kings”.
But that was before open warfare broke out.
“I think they both really believe they were put on earth to show up their father, rather than the reality,
which is that they would be mid-level media executives making a quarter million a year and grateful for it, without their old man.”
Earlier this month, the hedge fund #Starboard #Value sent a letter to shareholders of News Corp, the parent company of the Wall Street Journal and New York Post, calling for the company to eliminate its dual-class share structure.
In the letter, the Starboard CEO, #Jeffrey #Smith, argued:
“This transition of power from Rupert Murdoch to his children has allowed for complicated family dynamics to potentially impact the stability and strategic direction of News Corp.”
Four Murdoch children with voting rights, Smith added,
“could be paralyzing to the strategic direction”
and, more importantly:
“We are not sure why their perspectives should carry greater weight than the views of other shareholders.”
News Corp said it believed its dual-class capital structure
“promotes stability and has facilitated the successful implementation of News Corp’s transformational strategy and long-term outperformance for all News Corp stockholders”.
The outcome of the Nevada court battle will not immediately affect the family’s control of the Murdoch empire
but could in the fullness of time if Murdoch dies or becomes incapacitated.
“If the stock is split up and the family doesn’t get along, the company could face real challenges and it becomes a very bumpy road for the other investors who are not part of the drama.”
But as the caravan of Black SUVs ferried warring Murdochs in and out of court last week, there was at least one certainty, Elson says.
While Rupert Murdoch still lives, the company remains firmly under his thumb.
“Rupert Murdoch calls the shots and when he’s gone he really doesn’t have that worry any more. -- He’s done.”
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As the Murdoch #succession battle plays out in a US court,
a separate fight is brewing over control of #News #Corp
Australian and US investment groups take aim at #dual #voting #rights system that 
gives family a dominant voice over how empire is run
Australian pension funds and governance groups have criticised the share voting powers that allow Rupert Murdoch to control News Corp,
-- as a secret legal case over the future control of the company is heard in the US state of Nevada.
The push to untangle News Corp’s structure,
which allocates different voting rights according to share type, ️is being driven by agitators trying to loosen the billionaire’s grip over the media empire 
and stop that influence being passed to his heirs.
Murdoch has been in Nevada for hearings this week,
after seeking to 
change the terms of a family trust to ensure that his eldest son,
Lachlan, remains in charge of the company’s stack of newspapers and television networks, including the Wall Street Journal and Fox News.
The proceedings prompted the US hedge fund Starboard Value to propose a resolution to eliminate News Corp’s dual class share structure,
-- arguing that the political disagreement in the family
“could be paralyzing to the strategic direction” of News Corp,
according to The New York Times.
Dual structures are commonly used by company founders to retain control of a business even when they have a minority shareholding,
with Murdoch holding 40% of voting rights via a 14% shareholding.
Debby Blakey, the chief executive of the A$86bn Hesta superannuation fund, told Guardian Australia that
“one share, one vote” was fundamental to good corporate governance.
She said the fund’s “engagement, voting and advocacy activities continue to reflect this belief”.
“Hesta remains committed to engaging with companies and using our shareholder votes to drive change that helps create long-term investment value for our members,” Blakey told Guardian Australia.
The Australian Council of Superannuation Investors said it also supported a “one share, one vote” capital structure.
“Voting is a fundamental shareholder right and one of the key ways for shareholders to ensure accountability at listed companies,” ACSI said.