NEW YORK (Reuters) – When Lachlan Murdoch, the eldest son of media mogul Rupert Murdoch, was named sole chairman of News Corp (NWSA.O) and Fox Corp (FOXA.O) on Thursday, the announcement was widely reported. The rest of the immediate questions are about who will run a sprawling media empire that includes some of the world’s most powerful brands.
However, the executive transition does not resolve another potential power play that could occur after Rupert Murdoch’s death, as defined in a document called the Murdoch Family Trust.
The Reno, Nevada-based organization is developing a scenario in which a potential takeover could occur. It is the vehicle through which the elder Murdoch controls News Corp and Fox Corp, through a roughly 40% stake in voting shares in each company. Murdoch also owns a small amount of shares in companies outside the trust.
Upon Rupert’s death, the voting shares of News Corp and Fox Corp would be transferred from Murdoch to his four eldest children – Prudence, Elizabeth, Lachlan and James – creating a scenario in which three of the children could outvote the fourth, potentially creating a Government There is a battle over the future of companies, even though Lachlan Murdoch runs Fox and is the sole chairman of News Corp.
This tension is likely to affect the future of Fox News, one of the most polarizing properties in the Murdoch empire and an influential force in American politics, especially among Republicans who value Fox’s conservative-leaning audience.
While Lachlan Murdoch does not speak publicly about his political views, James Murdoch has been more outspoken. In January 2020, he and his wife, Catherine, took aim at both News Corp and Fox Corp for downplaying the impact of climate change, widely seen as a contributing factor to the Australian bushfires, in a statement to The Daily Beast.
In a July 31, 2020 letter offering his resignation from News Corp’s board of directors, which was disclosed in a News Corp filing, James Murdoch said he was resigning “due to disagreements over certain editorial content published by the company’s news outlets and certain other strategies.” decisions.”
Multiple media outlets, including the New York Times, Vanity Fair, and the Financial Times, have reported on tension between the brothers over the direction of Fox and other family-controlled media outlets.
In an interview with the Financial Times in 2021, James Murdoch appeared to criticize the channel without mentioning the name “Fox News” in comments about the US Capitol siege on January 6. “The ransacking of the Capitol is proof positive that what we thought was very dangerous,” he said. “Those outlets that spread lies to their audiences have unleashed uncontrollable, malignant forces that will remain with us for years.”
The Murdoch Family Trust has eight votes: four of which are controlled by Murdoch, and the remaining four are controlled by the four children from his first two marriages. Murdoch’s younger daughters, Chloe and Grace, from his third wife, Wendi Deng, do not have the right to vote in the fund.
Upon succession, the four eldest children will equally inherit Murdoch’s voting shares in the fund, according to Alice Enders, head of research at analyst firm Enders.
In addition to shares in News Corp and Fox, the fund also includes the Cruden family farm near Melbourne and the Murdoch art collection, according to a January 2023 Financial Times report.
Fox and News Corp have a dual stock system, with Class A non-voting shares and Class B non-voting shares. The shares in Fox and News Corp owned by the Murdoch sons through the trust are a combination of both classes of shares.
“It’s not like a real succession scenario right now, at this moment,” Enders said. “It’s more in the future I’d say.”
(Reporting by Helen Koster in New York and Don Chmielewski in Los Angeles; Preparing by Muhammad for the Arabic Bulletin) Editing by Stephen Coates and Margarita Choi
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