Rupert Murdoch loses his legal battle, leaving future of media empire in the balance

In the seemingly never-ending psychodrama surrounding Rupert Murdoch and his family, life has imitated art. Again.

A report^[1] on December 9 in The New York Times revealed details of the recent secret hearing in a Nevada probate court that was literally prompted by the epic HBO drama Succession.

In April last year, immediately after the airing of the Succession episode in which family patriarch Logan Roy dies, leaving both family and media business in chaos, Elisabeth Murdoch asked her legal representative on the family trust to send what was called the “Succession memo”.

Her aim was to avoid another episode of life imitating art. Her father had moved to change an irrevocable family trust that had been created after the end of his second marriage to Anna Murdoch in the late 1990s. Rupert’s move was designed to weaken Elisabeth’s position and that of her siblings Prudence and James, while enabling the family patriarch to effectively rule from the grave through his eldest son, Lachlan.

Read more: Rupert Murdoch's real-life succession drama is underway in a Nevada courtroom. What might happen next?^[2]

The probate commissioner in Nevada who heard Rupert Murdoch’s application, Edmund Gorman “resoundingly” ruled against his attempt to change his family trust in a way that would have secured Lachlan’s position atop the global media empire.

Gorman was scathing in his ruling, saying father and son had acted in “bad faith” in their bid to change an “irrevocable” family trust that divides control of Fox News and News Corporation equally among Murdoch’s four eldest children from his first and second marriages: Prudence, Elisabeth, Lachlan and James.

In the 96-page ruling, Gorman described the plan to change the trust as a “carefully crafted charade” to permanently consolidate Lachlan’s executive roles inside News, “regardless of the impacts such control would have over the companies or the beneficiaries” of the family trust.

The implications of the ruling are seismic, and commentators are already tracking the potential aftershocks. Eric Beecher, a former Murdoch editor, now chair of Private Media and author of The Men Who Killed the News, wrote^[3] in Crikey:

The leadership of both Murdoch companies, News Corp and Fox (combined market capitalisation of around US$40 billion), is now deeply uncertain as a result of the commissioner’s ruling. The non-Murdoch shareholders — who own more than 80% of each company — have woken up to the news that their chairman is likely to lose his job when his father dies, the family that controls those companies’ voting shares is locked in a bitter legal fight, and control of those companies is precarious. And shareholders and markets hate uncertainty.

Gorman’s ruling is not the end of the matter, however. It’s technically a recommendation to the Probate Court, which a district judge will ratify or reject.

Whatever the judge decides is open to appeal, which a lawyer for Rupert and Lachlan has already said they plan to do. Meanwhile, the other three siblings have released a statement welcoming the decision and expressing hope that “we can move beyond this litigation to focus on strengthening and rebuilding relationships among all family members”.

Good luck with that. The strongly worded ruling seems likely only to drive the parties further apart.

The family business and the business of family

The New York Times has previously reported^[4] it was Lachlan who initiated the plan to change the trust in mid-2023, following Elisabeth’s “Succession memo”. In consultation with his father’s lawyers and advisers, Lachlan drafted a plan to change the provisions of the family trust, which they called “Project Harmony” – “perhaps too optimistically”, commissioner Gorman remarked wryly.

Gorman’s ruling quotes from a text message Lachlan sent to Elisabeth before the trust met late last year:

Today is about Dad’s wishes and confirming all of our support for him and for his wishes. It shouldn’t be difficult or controversial. Love you, Lachlan.

At the meeting, Rupert said he loved all his children but “these companies need a designated leader and Lachlan is that leader”. This sweetness-and-light sentiment from Rupert jarred with Lachlan’s description of James as the trust’s “troublesome beneficiary”.

By “troublesome” the plan was obliquely referring to the split in the family between Lachlan and Rupert – who are wedded to a media empire that is both right-wing and profitable – and James, who severed all ties with the company over its denialist coverage of climate change and its credulous reporting of baseless conspiracy theories about the result of the 2020 US presidential election.

Rupert, like his fictional counterpart Logan Roy, has always been conflicted about his family and his media business. The empire has been his single biggest driving force for more than 70 of his 93 years. He alone built it and ran it. He has always overseen it as a family business despite its complexity, scale and need to continually adapt to the changing media landscape.

A common thread through the eight biographies of Murdoch published over the past four decades is that he loves his children. But as Jim Rutenberg, one of the two New York Times journalists who broke the Nevada stories, has pointed out, Lachlan, James and Elisabeth “are desperate to show their father that they can succeed and the only way they can do that is by succeeding in his business – the media”.

Commenting in the seven-part 2022 documentary series, The Murdochs: Empire of Influence, Rutenberg said: “By making his family the business and the business his family, Rupert left his family just as broken up as his company was when he sold [in 2018] to Disney”.

Where will the final season end?

The Murdoch family drama, then, has a few episodes left in it. If it is hard to see how it can end any more happily than Succession’s fourth and final season, we should also be allowed to imagine what New Corp could look like post-Rupert.

Let’s look at what the global media company could become without either the chairman emeritus looking over the chief executive’s shoulder, or even his ghostly spectre looming large, as would have been the case if the litigation in Nevada had succeeded.

If Prudence, Elisabeth and James can assert control, sideline Lachlan, and settle on a unified path forward, they can potentially reshape the company and redefine its journalism.

If they have already war-gamed it, and surely by now they have, the three siblings would know their greatest risk is alienating their current audiences, subscribers and advertisers.

In Australia, News operates in a virtual monopoly, so it can shapeshift with fewer consequences. But the US market is awash with emerging right-wing alternatives, each of which is eager to steal a share of the Fox audience. These viewers are the people who make Fox such a valuable commodity, and they’re the reason why it’s been so hard to stand up to Trump and his anti-democratic tactics, even on the odd occasions when Rupert and Lachlan wanted to.

The challenge is to somehow bring those audiences along for whatever transition the siblings envisage for the company. Can it be done, and if so, how?

The company’s own history suggests editorial change can happen quickly and audiences do tend to retain some loyalty. Murdoch’s takeover of The New York Post in the 1970s shows it is possible to radically change a masthead’s editorial position while expanding its audience, in that case from a mostly Democrat-leaning readership to a larger and more conservative one. But that was a moribund newspaper due for a radical makeover. There’s no guarantee it would work in reverse.

Fox News is arguably at the peak of its powers. The incentive to impose change has everything to do with journalistic standards and nothing to do with finances. In 2023–24 the Fox Corporation’s net income^[5] was US$1.5 billion (A$2.35 billion).

Even so, it must be possible to introduce incremental changes that reacquaint Fox viewers with more considered and ethical journalism without scaring them off. This wouldn’t work universally. Some of the demagogues who couldn’t cope would have to go – Sean Hannity springs to mind, as does former Fox firebrand Tucker Carlson.

Under new management, News could reintroduce some of the elements lost to Talk-TV in the mid-1980s, when the US scrapped the fairness doctrine that guaranteed balance and greater civility on the airwaves. It could ensure programs canvas different views, ask devil’s-advocate questions, and investigate issues without fear or favour.

Change of this nature wouldn’t be easy. News Corp has an echelon of editors across its global mastheads, most of whom are culture warriors and battle-hardened loyalists. They can and probably would work together to undermine progressive change.

During his tenure as the Australian head of News Corp, well before he became chair of the ABC, Kim Williams saw how the editors sneeringly white-anted his efforts to introduce reform. Even Lachlan Murdoch discovered that senior staff could undercut him. Paddy Manning recounts in his 2022 biography of Lachlan Murdoch, The Successor^[6], that the infamous Roger Ailes did just this as Lachlan was learning the ropes at Fox in the early 2000s.

The three siblings will need resolve to dispense with those who get in their way, and they’ll need to introduce firm but gradual changes that don’t unduly scare their audiences or the market. But if Prudence, James and Elizabeth do share such a vision and are up for a fight, the world could soon be in for a fascinating media transition.

References

1. ^{^} report (www.nytimes.com)
2. ^{^} Rupert Murdoch's real-life succession drama is underway in a Nevada courtroom. What might happen next? (theconversation.com)
3. ^{^} wrote (www.crikey.com.au)
4. ^{^} previously reported (www.nytimes.com)
5. ^{^} Fox Corporation’s net income (www.statista.com)
6. ^{^} The Successor (www.blackincbooks.com.au)