In a seismic development in the decades-long media dynasty presided over by Rupert Murdoch, a settlement has been reached in the Nevada legal fight over his family trust.
The settlement will see James and Elisabeth Murdoch and Prudence MacLeod formally cut ties with the family business and surrender all their equity in News Corp and Fox Corp. They had objected to several aspects of the strategic path taken by Rupert Murdoch, now 94, and appeared to be in position to exercise majority control toward that end after the death of the eldest Murdoch. In part, James and Elizabeth Murdoch, who blazed their own separate trails in the media business, had concerns about Fox News and the close affiliation of the news network with the family.
Instead, now Lachlan Murdoch, who currently runs Fox Corp. as CEO, has been reaffirmed as the heir apparent. Grace Murdoch and Chloe Murdoch, who are the daughters of Rupert Murdoch and his ex-wife, Wendi, are joining Lachlan as members of a new trust. Lachlan Murdoch’s victory over his siblings will, of course, draw Succession comparisons galore.
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However, with leaking of sealed proceedings material deepening family divisions, indicative of the murky Murdoch machinations is how the family trust matter was already on appeal after a setback for Rupert Murdoch last December. A protracted battle in and out of the Nevada courts appeared likely, meaning it appears that a resolution was orchestrated via some of the family’s supporting players.
“People forget how many children Rupert Murdoch actually has and how those children have mothers,” a source close to events told Deadline today after news of the new trust broke. Murdoch’s youngest daughters Chole and Grace from his marriage to Wendi Deng, which lasted from 1999 to 2013, never had voting rights under the previous family trust structure. Yet, from what sources tell Deadline, their economic interests played a vital role in the resolution of the family dispute and the buyout of James, Elizabeth and Prudence.
According to a statement from Rupert Murdoch’s News Corp and Fox Corp., the settlement entails the “termination” of all litigation. James and Elizabeth Murdoch and Prudence MacLeod will receive cash funded by the sale of 14.2 million shares of News Corp Class B common stock and about 16.9 million shares of Fox Corp. shares. The settlement has been valued in the billions of dollars by Deadline sources and press reports.
Shares in both Fox and News Corp drifted down Monday after the close of trading on news of the settlement.
The views of the Murdochs came to light earlier this year in a New York Times exposé based on transcripts and personal messages obtained by the outlet as the legal saga played out in Nevada. The Atlantic also landed a rare interview with James Murdoch and published a piece shedding new light on his thinking about his family.
It always seemed a little hard to imagine the ultimate chess master, Rupert Murdoch, to be outmaneuvered in court on a matter as consequential as the future of his empire. Yet the reports in recent months about him trying to redo a supposedly “irrevocable” trust struck many observers as a possible overplaying of his hand. The scenario of James Murdoch banding together with his siblings to use their leverage as heirs with majority control seemed like a plausible outcome of the trial. Even the upside-down notion of Fox News turning into a progressive network or other legacy Murdoch assets being transformed seemed to be scenarios worth contemplating.
New trusts will be established for Lachlan, Grace and Chloe Murdoch. LGC Holdco, an entity set up for the remaining beneficiaries, will own all of the remaining shares previously held by the Murdoch Family Trust. The new entity will control about 33.1% of News Corp’s Class B common stock and less than 0.1% of News Corp’s Class A common stock. It will control 36.2% of Fox Corp.’s Class B common stock and less than 0.1% of Fox Corp.’s Class A common stock.
A term of 2050 will be established for the Remaining Beneficiary Trusts. Voting control of the News Corp and Fox Corp, shares owned by LGC Holdco will rest solely with Lachlan Murdoch through his appointed managing director, the companies said.