Why Murdoch’s succession case could be major blow to his rightwing legacy | Rupert Murdoch

A Nevada court dealt nonagenarian media mogul Rupert Murdoch a major blow on Monday. And one that could – potentially – shatter his plans to secure his rightwing legacy.

Behind closed doors, Murdoch has been involved in a legal battle for control of the family’s media assets, pitching the mogul and Lachlan Murdoch, his political protege and heir apparent, against the patriarch’s three other oldest children.

The battle isn’t about money – it’s about power. The senior Murdoch wanted to change the family’s trust to ensure that Lachlan, CEO of Fox Corporation and chairman of News Corp, would control the empire after his death rather than sharing power with his siblings James, Elisabeth and Prudence.

But a 96-page ruling obtained by the New York Times blasted the scheme as a “carefully crafted charade” designed to “permanently cement” Lachlan’s control.

The spat will not end here but by failing to secure his eldest as his rightwing successor, Murdoch now faces the prospect that following his death – more liberal Murdochs may want a say in the the content flowing from what is now the world’s most powerful conservative media empire.

That Fox News, the Wall Street Journal, The Times, The Sun, the Australian and others under the News Corp umbrella could move in a different political direction would be bad for business, as Murdoch’s attorneys are believed to have argued in court. Fox News is the most-watched cable news show in the US and reported revenues of $14bn for fiscal year 2024. But while that may or may not happen, the business won’t benefit from replacing a media titan like Murdoch with squabbling siblings.

“This is the end of News Corp,” they said. “The whole point is that unless one person runs it they can’t make decisions so they will fight over the direction of Fox News. Who is the editor of the Wall Street Journal? It will be controlled by the kids, become directionless, and lose its rightwing focus,” said a former high-level Murdoch lieutenant speaking on condition of anonymity.

“The trust was obviously rock-tight and the children had good lawyers,” they said. “Now Lachlan won’t be able to run it and that was the whole point.”

But whether James and Elizabeth Murdoch can force Fox News to take a progressive bent against News Corp CEO Lachlan, with eldest daughter Prudence a likely floating vote, is open to question. More likely, said the former lieutenant, News Corp leadership direction would devolve under a power-sharing arrangement.

If this all sounds like an episode of Succession, spare a thought for the Murdochs. Astonishingly, the legal drama had been kicked off when Murdoch’s children watched an episode of the hit HBO show in which the fictional heir of the fictional media empire discussed their PR strategy in the event of the patriarch’s death “where the patriarch of the family dies, leaving his family and business in chaos”.

According to the Times, Elizabeth Murdoch’s lawyer wrote a “‘Succession’ memo” to the trust hoping to prevent fiction turning into reality. Ironically, the memo, and the legal challenge that followed, may have created just that.

The ruling is unlikely to be the final word. Gorman acts as a “special master” who weighs the testimony and evidence and submits a recommended resolution to the probate court. A district judge could still reject Gorman’s recommendation, extending the legal wrangling far into the future.

But shareholders are already unhappy with this small S succession drama. In September, the hedge fund Starboard Value sent a letter to News Corp shareholders calling for the company to eliminate its dual-class share structure – which gives the family 41% of company votes, despite having just 14% of an overall stake in the company.

“This transition of power from Rupert Murdoch to his children has allowed for complicated family dynamics to potentially impact the stability and strategic direction of News Corp”, Starboard CEO Jeffrey Smith argued.

Four Murdoch children with voting rights, Smith said, “could be paralyzing to the strategic direction… the company could face real challenges and it becomes a very bumpy road for the other investors who are not part of the drama.”

News Corp’s dual-class voting structure that gives Rupert Murdoch control of the company might not function under equal control of four children with shifting alliances, Charles Elson, a leading authority on US corporate governance issues, told the Guardian in September.

Passing that power on generationally, Elson said, could be problematic. “How do you know the talent is genetic? Simply because they’re the children doesn’t mean they have the same business acumen as the father and it’s not how you pick the leader of a company or a country.”