Secret family battle for Murdoch empire revealed in sealed court documents

By Jim Rutenberg & Jonathan Mahler

Rupert Murdoch is locked in a secret legal battle against three of his children over the future of his media empire, as he moves to preserve it as a conservative political force after his death, according to a court document seen by The New York Times.

Murdoch, 93, set the drama in motion late last year, when he made a surprise move to change the terms of the Murdochs’ irrevocable family trust to ensure that his eldest son and chosen successor, Lachlan, would remain in charge of his vast collection of television networks and newspapers.

The trust currently hands control of the family business to the four oldest children when Murdoch dies. But he is arguing that only by empowering Lachlan to run the firm without interference from his more politically moderate siblings can he preserve its conservative editorial bent, and thus protect its commercial value.

Those three siblings — James, Elisabeth, and Prudence — were caught completely off-guard by their father’s effort to rewrite what was supposed to be an inviolable trust and have united to stop him. Lachlan has joined on Murdoch’s side. The ensuing battle has been playing out entirely out of public view.

Last month, the Nevada probate commissioner found that Murdoch could amend the trust if he is able to show he is acting in good faith and for the sole benefit of his heirs, according to a copy of his 48-page decision. A trial to determine whether Murdoch is in fact acting in good faith is expected to start in September. Hanging in the balance will be the future of one of the most politically influential media companies in the world.

Representatives for the two sides declined to comment. Both have hired high-powered litigators. 

Murdoch’s decision in 2018 to formally designate Lachlan as his heir put to rest years of speculation. What it did not do, though, was ensure that Murdoch’s wishes would survive him: The existing trust gives all four of his oldest children an equal voice in the company’s future.

The Murdoch family has been divided before. James and Elisabeth at one point competed with each other and Lachlan to eventually take over, and at various times they have clashed with one another and their father. James, who once helped run the firm with Lachlan, left it in 2019 and now oversees an investment fund. Elisabeth runs a successful movie studio, Sister, and has for years sought to position herself as the “Switzerland” of the family, maintaining good relations with all. Prudence, Murdoch’s oldest child, has been the least involved in the business and has remained the most private. 

But given Murdoch’s advanced age, this battle has all of the makings of a final fight for control of his sprawling media conglomerates, which own Fox News, The Wall Street Journal, The New York Post, and major newspapers and television outlets in Australia and UK. It has already driven a new wedge into the famously fractured family.

Politics, and power, are at the root of the struggle. Since Murdoch designed the trust nearly 25 years ago, the family’s political views have diverged sharply. During Donald Trump’s rise, Murdoch and Lachlan became more closely aligned, pushing the company’s most influential outlet, Fox News, further to the right, making the other three children increasingly uncomfortable.

Murdoch has called his effort to change the trust Project Harmony because he hoped that it might head off a looming family struggle when he dies, according to a source. But it has had the opposite effect.

After filing his petition to amend the trust, Murdoch met separately with Elisabeth and Prudence, hoping to win their support, this person said. Instead, they were furious. Elisabeth responded to the possibility with a string of expletives.

Days later, on December 6, Murdoch’s representatives went ahead with the motion to make the changes at a hastily called special meeting of the trust. The representatives for the three children sought to adjourn the meeting and block the proposed changes but failed.

According to the court’s decision, Murdoch was concerned that the “lack of consensus” among his children “would impact the strategic direction at both companies including a potential reorientation of editorial policy and content.” It states that his intention was to “consolidate decision-making power in Lachlan’s hands and give him permanent, exclusive control”.

The document makes it clear that Murdoch’s actions have pushed Elisabeth, Prudence, and James into a joint posture against him. The siblings share legal counsel and are fighting to retain their voice in the company’s future, arguing that their father is trying to disenfranchise them. They say Murdoch’s move violates the spirit of the initial trust, enshrined in its “equal governance provision,” and that it was not done in good faith.

This will be one of the main issues in the trial. The trust holds the family’s shares in Murdoch’s empire, which is now mainly divided between two companies: Fox, which includes Fox News and the Fox broadcast network, and News Corp, which holds his major newspapers.

All six of Murdoch’s children have an equal share of the trust’s equity. That includes Chloe and Grace, the two younger children. But they have no voting rights.

As of now, the voting rights are shared among Murdoch and his four oldest children through their own handpicked representatives on the trust’s board. But Murdoch has the ultimate control and cannot be outvoted. After he dies, Lachlan, James, Elisabeth, and Prudence each get a single vote. As Murdoch put it in an interview with Charlie Rose in 2006: “If I go under a bus tomorrow, it will be the four of them who will have to decide which of the ones should lead them.” The probate commissioner’s review of the facts shows that Murdoch is moving to expand Lachlan’s voting power to secure a majority and ensure that he cannot be challenged. The changes would not affect anyone’s ownership stake in the firm.