As a long-time observer and critic of media bias, I find myself captivated by the ongoing succession battle at Fox News and News Corp., orchestrated by the Murdoch dynasty. The saga is reminiscent of a Shakespearean drama, with its complex characters, high stakes, and familial strife that threatens to upend an empire built on conservative values.
Back in January 2021, Fox News parted ways with their politics editor, Chris Stirewalt. This move came two months after he had predicted Arizona for Joe Biden in the 2020 election. The media magnate Rupert Murdoch and numerous network viewers were displeased with this decision, as they felt it was incorrect. After Donald Trump criticized Fox News for being disloyal, many viewers switched to Newsmax and One America News. It was during this period that the ratings of Fox News significantly declined.
On November 7th, Murdoch expressed strong displeasure towards the team at the Decision Desk in a message he wrote.” (The original statement implies anger or dislike, while this version aims to be more neutral and professional.)
In an attempt to regain its audience, Fox News began spreading claims that the election had been manipulated. Notably, ratings improved as a result.
If Murdoch’s children who have shown concern about Fox News moving too far to the right were in charge, the decision to echo Trump’s election conspiracy theories might have been different. They could potentially take control if they manage to outmaneuver their father, currently 93, and brother Lachlan, the designated heir, in a power struggle that rivals the intrigue of a popular TV show. This battle may shape the editorial direction of Fox News and The Wall Street Journal.
Starting on Monday, a two-week long court case will begin in Nevada’s probate court concerning Murdoch’s petition to alter the conditions of his irrevocable family trust – the means by which he manages News Corp. and Fox – so that Lachlan remains in control after Murdoch passes away, as suggested by documents obtained by The New York Times. As it stands now, the trust equally distributes voting rights among his four eldest children. However, despite being the current chair of News Corp., Lachlan’s position could be challenged by his siblings, who are generally seen as more politically moderate and have united against any proposed modifications to the trust.
To ensure Lachlan becomes his successor, Murdoch needs to demonstrate that the changes he’s making are sincere, aimed at benefiting all trust members, as stated in a report by The Times, which referenced a probate judge’s directive. Essentially, Murdoch is building his case in court (under seal) by arguing for Fox Corporation to remain a strong conservative political media presence, thereby preventing Lachlan’s siblings from taking control and potentially shifting the coverage to a more moderate stance.
Robert Strauss, a specialist lawyer focusing on business succession for affluent families, underscores the significance of determining if the revisions work in the best interest of all beneficiaries. “It’s challenging to envision how stripping control from an individual can be advantageous for them,” he points out.
According to Rupert Murdoch’s viewpoint, Lachlan seems most suited to maintain the existing editorial approach at Fox, which has witnessed a ratings increase despite a significant drop in pay TV subscribers recently. Historically, Fox has aligned with the Republican majority, and as the party leaned toward far-right ideologies during the Trump administration, so too did many Fox hosts reflect this shift. In his farewell message to employees upon stepping down from the boards of Fox and News Corp., Murdoch suggested that Lachlan shares his political views and will continue to uphold the networks’ conservative perspective.
In his writing, he emphasized that the struggle for open expression and independent thinking has never been more critical. He shared a strong conviction about liberty, which his son Lachlan wholeheartedly supports.
Contrarily, James, who was once considered as the likely successor to his father’s media empire but lost a power struggle with his brother, has targeted his family’s influential conservative media conglomerate. He resigned from the News Corp board in 2020 due to disagreements over specific editorial content published by the company’s news outlets. This could be referring to Fox’s coverage claiming that the election was fraudulent, which has resulted in at least three shareholder lawsuits against the board, as well as a $787.5 million settlement to Dominion Voting Systems. Smartmatic, another voting technology company, is still pursuing a $2.7 billion defamation lawsuit against the network.
Stacie Nelson, who works at the law firm Holland & Knight, notes that it’s possible for the probate court to consider if designating Lachlan as the only heir could potentially boost the worth of his siblings’ shares, even though they would lose their voting rights in this scenario.
She notes that the court might take into account the potential future trajectory of the news outlets when deciding if Lachlan is the ideal guardian for their benefit. This could still be advantageous to the other parties involved.
Strauss points out that it’s improbable for the court to approve Murdoch’s request to alter the trust, especially when the main intent is to decrease share ownership or strip voting rights. He further explains that a poor motivation behind such an amendment would be if it favored one trustee over the others.
There’s also the issue of whether a succession battle will unnerve investors. In a September letter, activist investor Starboard Value underscored the Murdoch heirs having “widely differing worldviews,” which could be “paralyzing to the strategic direction of the company” after Murdoch dies. It added, “This is clearly not the appropriate governance structure for a public company, and we believe it has exacerbated News Corp’s valuation discount relative to its inherent value.” Giving Lachlan the keys to Murdoch’s media empire for good could eliminate that uncertainty.
In the realm of media and entertainment, power struggles during succession are not uncommon. A notable instance involved Sumner Redstone attempting to acquire his daughter Shari’s share in National Amusements, a company they jointly owned. This control was held through a trust. However, they eventually resolved their differences.
Unlike the public spectacle of that battle, the Murdoch matter will unfold privately within the confines of a courtroom, kept hidden from public view. Last Friday, probate commissioner Edmund Gorman Jr. rejected a request by a group of media outlets, including The New York Times, The Washington Post, and The Associated Press, to make the court proceedings and records accessible to the public. He decided that these hearings should remain confidential to protect sensitive information from being disclosed.
Alex Weprin contributed to this report.
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2024-09-16 20:25