A few months ago, I wrote a blog titled “The Succession Plan of a Hermès Heir”, which delved deeper into the succession plan of Nicholas Puech, an 80-year-old billionaire.
Recently, another billionaire’s succession plan has been involved in the media, specifically Rupert Murdoch. This blog delves deeper into the court battle involving Mr. Murdoch’s plans for his media empire.
For those of you who do not know, Rupert Murdoch, now 93 years old, has two companies: (1) News Corporation, which owns newspapers in the UK (i.e. the Times and the Sun) and the US (i.e. the Wall Street Journal) and (2) Fox, which broadcasts Fox News.
In 1999, Mr. Murdoch established the irrevocable Murdoch Family Trust (the “Trust”), which owns the above-mentioned companies. Currently, the Trust is worth approximately 14.9 billion pounds.
The Trust was supposed to largely settle Mr. Murdoch’s succession plans; however, recently, disputes have arisen amongst the Murdoch Family.
To introduce the parties, Mr. Murdoch has six children, namely (in order of descending age): Prudence, Elisabeth, Lachlan, James, Grace and Chloe.
With respect to equity, the Trust gives all six of Mr. Murdoch’s children an equal share. However, with respect to voting rights, the Trust only gives the Murdoch Family 8 votes, which can be used to have a say on the boards of his companies. Mr. Murdoch controls 4 votes, with his four eldest children each controlling 1 vote. Upon Mr. Murdoch’s death, his votes are to be passed equally onto the same four children. Therefore, Prudence, Elisabeth, Lachlan and James will each hold 2 of 8 votes.
In late 2023, Mr. Murdoch stepped down as the chairman of Fox and News Corporation, in favour of Lachlan, who shares his similar political views. It was subsequently reported that Mr. Murdoch wanted to amend the Trust, so that upon his passing, Lachlan could take control without interference from Prudence, Elisabeth and James, who hold different political views. Prudence, Elisabeth and James have now united to fight against this change.
The court case originally gained attention due to the New York Times obtaining copies of sealed court documents. These documents revealed that the Nevada probate commissioner found that according to the Trust agreement, Mr. Murdoch could amend the Trust, if he was able to show he was acting in good faith and for the sole benefit of his heirs. Mr. Murdoch claims he is doing just that.
The private court case has since begun in Nevada. As media outlets have been barred from the proceedings, it will be interesting to see if any information about the testimony given by Mr. Murdoch and his children ends up being released, and if the public will ever find out how this dispute ends.
Thank you for reading and stay tuned!
Megan Zanette
Sources:
https://www.bbc.com/news/articles/cwyllp4rey9o
https://www.nytimes.com/2024/07/24/business/media/rupert-murdoch-succession-fox.html