Murdoch Loses Legal Battle Over Family Trust: What This Means For His Media Empire

Rupert Murdoch’s effort to change the structure of his family trust and grant full control of his vast media empire to his eldest son, Lachlan Murdoch, was rejected by a Nevada court. The ruling, which was made public after a court decision was sealed on Saturday, maintains that Rupert’s three other adult children will continue to share equal control over the family’s media interests after his passing.

Media magnate Rupert Murdoch, owner of global media giants Fox News, News Corp, and The Times, wanted to change the terms of an irrevocable family trust that had previously granted his four adult children equal voting power in the control of the family empire. He wanted to transfer that voting power entirely to Lachlan, whom he considered the most like-minded of his children. This would not affect their financial inheritance.

The three children, namely James, Elisabeth, and Prudence, had to become the focal point in this legal battle. In Murdoch’s attempt to gain a majority control on voting for Lachlan, many in the family believed he was doing it only so that his son, after his death, could gain total control of the empire.

The battle played out out of the public’s view, at least, as media representatives tried to get into the courtroom. On examining the case, Nevada Commissioner Edmund Gorman determined that Rupert and Lachlan Murdoch had acted in “bad faith” in their attempt to modify the trust agreement. Gorman’s ruling effectively ended Rupert’s attempts to gain full control for his eldest son.

The Aftermath Of Court Ruling

After the verdict, James, Elisabeth, and Prudence Murdoch were pleased with the decision, saying they look forward to moving on from the litigation and mending relationships in the family. The siblings released a joint statement in which they welcomed the outcome, saying: “We hope that we can move beyond this litigation to focus on strengthening and rebuilding relationships among all family members.”

According to a 96-page opinion from The New York Times, the court slammed Rupert Murdoch for his effort to orchestrate what it termed as a “sleight of hand carefully crafted charade” in securing Lachlan’s grip over the family’s media empire through its executive power regardless of what that did to the companies or the trust’s beneficiaries. In so doing, it noted, the court described Murdoch’s efforts as a step toward violating the trust’s intent.

Family’s Power Struggle: What’s At Stake?

Murdoch and Lachlan’s effort to restructure the trust was named “Project Harmony” by the father-son combination. It was an effort to ensure there would be no more future family power struggles when Rupert Murdoch had stepped aside. According to a report, however, the rest of the children were left in the dark regarding the restructuring, fueling the family disagreement that went to court.

Although the court setback is a significant blow, Rupert Murdoch’s legal team, which boasts high-profile attorneys such as Adam Streisand and former U.S. Attorney General William Barr, has indicated that an appeal is on the table. Murdoch’s lawyers have not yet responded publicly to the court’s ruling, but they are expected to challenge the decision.

What Does This Mean For Murdoch’s Media Empire?

If the judgment prevails, then far-reaching implications for the future of Murdoch’s sprawling empire shall be witnessed. Among such major outlets include Fox News, The Wall Street Journal, The Times, The Sun in the UK, and The Australian. Overall, the direction that may be taken by this family dispute will be of significance. One of the factors influencing that direction is Lachlan, who has gone on public record to be closer in conservative political views with his father.

Lachlan, who took over as the chairman of News Corp in 2023, has been a prominent figure in the empire’s ongoing successes. Fox News, under his leadership, continues to be the most-watched cable news network in the U.S. and has seen a significant increase in viewership since the rise of Donald Trump in 2015. For the fiscal year 2024, Fox’s revenue reached nearly $14 billion.

Political Differences Within Murdoch Family

The battle for control is, in part, the internal political differences within the Murdoch family. Rupert and Lachlan Murdoch, known for their conservative ideological tendencies, are at war against James, Elisabeth, and Prudence Murdoch who have more moderate and/or liberal tendencies. Among others, James Murdoch has been vocal against the climate denialism in media and criticized U.S. media for spreading misinformation particularly about the January 6 insurrection. In 2020, James quit his senior executive position at News Corp and donated $600,000 to the presidential campaign of Joe Biden.

In contrast, Lachlan’s political views have been more in line with his father’s, and he has been supportive of the expansion of the media empire’s influence, particularly during the Trump era. The family’s political divide will likely impact the future direction of the company, especially if Lachlan maintains ultimate control.

Robert Thompson, a media scholar at Syracuse University, believed that despite the court loss, the Murdochs would probably continue with the business model that has made their media empire so successful. “The Fox model has worked very well,” Thompson said. “Even if all the siblings share control, they will still have to think about the companies’ bottom line.” He added that the Murdochs are unlikely to fundamentally change the direction of the empire that Rupert Murdoch built.

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