A Nevada commissioner has shot down Rupert Murdoch’s effort to change his family trust to give full control of his media empire to his eldest son, Lachlan, in order to ensure Fox News would retain its conservative editorial bent.
In an at-times blistering decision that was filed on Saturday, commissioner Edmund J. Gorman Jr. found that the father and son, who currently leads Fox News parent company Fox Corp and News Corp, had acted in “bad faith” in their attempts to modify the irrevocable trust, the New York Times reported.
As it is currently written, the family trust would divide control of the powerful right-wing media empire – which also includes the New York Post, Wall Street Journal and several other British and Australian newspapers – between Murdoch’s four eldest children following the 93-year-old mogul’s death.
Gorman contended in his ruling that the proposal to revise the trust amounted to little more than a “carefully crafted charade” to “permanently cement Lachlan Murdoch’s executive roles” within the Murdoch empire, and did not take into account the “impacts such control would have over the companies or the beneficiaries” of the family trust.
Adam Streisand, a lawyer for Rupert Murdoch, told the Times that they were disappointed in the ruling and intended to file an appeal.
With the trust remaining unchanged, it sets up a possible scenario in which the other three heirs – James, Elisabeth and Prudence – could potentially out-vote Lachlan for control of the sprawling media conglomerate, even though Lachlan currently runs both Fox and News Corp.
While Prudence has been the least involved in the family business, Rupert has at various times considered choosing Lachlan, James or Elisabeth to succeed him. Within the past few years and with James and Elisabeth known to hold more politically moderate views than their dad and older brother, Rupert sought to lock in the right-wing slant of Fox News and his other media properties by positioning Lachlan to take charge.
The effort to strip the other three children of all voting power while keeping Lachlan entrenched at the top began in earnest in the middle of last year. At that time, according to the court documents, the children had begun discussing the strategy of dealing with their father’s death behind the scenes, spurred on by the episode in the HBO series Succession when fictional family patriarch Logan Roy suddenly passes away.
Under the initial trust agreement, which was meant to be binding, the voting shares would be divided equally among the four oldest children after Rupert’s death. This was due to negotiations with Rupert’s second wife Anna – the mother of James, Lachlan and Elisabeth – who was concerned that her ex-husband’s younger children with his third wife, Wendi Deng, would receive equal voting power. Prudence is Murdoch’s first child with his first wife, Patricia Booker.
With a provision in the trust giving Rupert the right to make changes as long as he is acting in all beneficiaries’ best interests, Lachlan and his father looked at a way of amending the arrangement to consolidate Lachlan’s power. It also sought to marginalize James, who they were worried was planning a “coup” with Elisabeth and Prudence to push out Lachlan after their father’s death.
Ultimately, Gorman sided overwhelmingly against Rupert and his eldest son, claiming they operated secretly for months and had the ulterior motive of keeping Lachlan in power to keep Fox as a right-wing operation.
“The effort was an attempt to stack the deck in Lachlan Murdoch’s favor after Rupert Murdoch’s passing so that his succession would be immutable,” Gorman wrote. “The play might have worked; but an evidentiary hearing, like a showdown in a game of poker, is where gamesmanship collides with the facts and at its conclusion, all the bluffs are called and the cards lie face up,” he added.
