Murdoch Family Trust: The real battle over succession has not yet begun

NEW YORK (Reuters) – When Lachlan Murdoch, the eldest son of media mogul Rupert Murdoch, was named sole chairman of News Corp (NWSA.O) on Thursday, the announcement put an end to immediate questions about who would run News Corp. Fox (FOXA.O): a sprawling media empire that includes some of the world’s most powerful brands.

But the executive transition does not resolve other potential power plays that could occur after Rupert Murdoch’s death, as outlined 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 adult 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 the companies, even though Lachlan Murdoch runs Fox and is the sole chairman of News Corp.

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 sons 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.”

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