Background
News Corp
In 1952, Rupert Murdoch inherited The News , a tabloid newspaper based in Adelaide, South Australia, after the death of his father Keith. In the years following, he acquired several newspapers in the United Kingdom and the United States, including News of the World , The Sun , the New York Post , and founded Sky News and Fox News. News Corporation, Murdoch's company, later acquired HarperCollins and Dow Jones & Company, the publisher of The Wall Street Journal . In 2013, amid several scandals—including the News International phone hacking scandal, News Corporation divested its entertainments assets into 21st Century Fox and its publishing assets into News Corp. The Walt Disney Company acquired 21st Century Fox in March 2019. Murdoch's eldest son Lachlan was appointed the chief executive of Fox Corporation following the acquisition and appointed the chairman of Fox Corporation and News Corp in September 2023. Murdoch's assets are primarily derived from Fox Corporation, which retained nearly thirty affiliate television stations after Disney's acquisition and operates several Fox News affiliates. [1]
Murdoch family
Rupert Murdoch has six children, including four with Patricia Booker and Anna Maria Torv (now Anna dePeyster). Prudence, who is the only child from Murdoch's first marriage, was described by Michael Wolff in Vanity Fair as uninterested in Murdoch's business operations, though she was employed as a journalist at News of the World . Elisabeth, Murdoch's eldest child with Torv, was the chairwoman of television production firm Shine Group until it was acquired by 21st Century Fox in 2015. [2] Lachlan, Murdoch's elder son, is the chairman of Fox Corporation and News Corp and the chief executive of Fox Corporation. [1] James was a board member of News Corp until he resigned in 2020 over "disagreements over certain editorial content," including coverage by the company's assets of the 2019–20 Australian bushfire season. James's political views concerned his father, who believed he would enlist Elisabeth and Prudence to ensure editorial neutrality. [3] According to The Wall Street Journal , Murdoch postulated that James could sell Fox News, and former host Tucker Carlson expressed concerns. In October 2022, Murdoch proposed combining News Corp and Fox Corporation, a merger that would have solidified Lachlan's position. Murdoch's efforts were privately criticized by Elisabeth and Prudence; at a dinner for Elisabeth's husband Keith Tyson, Robert De Niro encouraged her to go against her father, though she later appeared with Rupert at Super Bowl LVII. [4]
The Murdoch family trust, written after Murdoch's divorce from Torv in 1999, defers management of News Corp to Murdoch's children upon his death and is largely irrevocable, but contains a provision that allows good faith and beneficial changes. The trust gives Chloe and Grace, Murdoch's two youngest children with Wendi Deng Murdoch, equal share of the equity without voting rights. [3] The Murdoch trust controls the largest share—but not a majority—of voting rights in News Corp despite low equity. [5]
In December 2023, Murdoch altered the terms of the irrevocable trust in an effort to appoint Lachlan as the sole proprietor, arguing that the conservative bias of News Corp's media assets could be retained, ensuring its commercial value. Murdoch met with Elisabeth and Prudence after filing his petition, who disapproved of his efforts. [3] Murdoch moved the trust to Nevada, a decision that would favor Lachlan for the state's probate law. [6] Nevada has strict confidentiality protections, and few income and inheritance taxes, so it is a popular state for the management of family trusts. [7] Representatives for Murdoch's children attempted to adjourn a meeting in Reno approving the changes, but failed. [3] Rupert's argument is that interference by the other siblings would cause a financial loss to Fox, and therefore "in their own best interests if they have their votes taken away from them". [8]
According to the Wall Street Journal in September 2024, James had made a prior attempt at settlement, in a proposal that included the possible sale of his and his sisters' interests in the trust. However, this would lead to a loosening of the hold of Lachlan and Rupert on the companies, as they would be under financial strain. [9] Paddy Manning, who published an unauthorised biography of Lachlan Murdoch in 2022, [10] says that Lachlan had the option to buy out his family members a few years ago, but, after papers had been drawn up, decided that the price was too high, and none of the siblings appeared to pose a threat to his control of the business. To buy out his three siblings now would cost at least $US3 billion (A$4.4 billion), and as his wealth was estimated at $US2.4 billion (A$3.5 billion) in early 2024, it is unclear whether he could manage to fund it. [11]
Murdoch's health
According to Vanity Fair in April 2023, Murdoch had previously suffered several medical emergencies that were largely unreported, including "a broken back, seizures, two bouts of pneumonia, atrial fibrillation, and a torn Achilles tendon." In July 2022, Murdoch collapsed in Oxfordshire from COVID-19-related complications. He was treated at Cromwell Hospital and required the assistance of Lachlan to move. [12]
Nevada trust law
It is not stated where the family trust was set up, but a key reason for challenging the terms in Nevada is that it allows changing the terms of a trust, using a method known as "decanting". This allows assets of one trust to be moved (or "poured") into a new trust with altered provisions. Nevada does not tax trusts at a state level nor mandate the reporting of trusts. [13]
Nevada has strong privacy protections, used to disallow publication of any details; this would not be allowed under Australian law and in most other places. [13]
