Quiver Quantitative - Lachlan Murdoch's appointment as the sole chairman of News Corp (NASDAQ:NWSA) and Fox Corp (FOXA) may have momentarily settled questions about the operational helm of the Murdoch media empire. However, underlying complexities regarding the future of the conglomerate post-Rupert Murdoch's reign remain unresolved. The linchpin to these potential complications is the Murdoch Family Trust, a Reno, Nevada-based entity that governs how Rupert Murdoch's significant voting shares in News Corp and Fox Corp (FOX) are to be disseminated amongst his elder four children upon his passing. This provision could set the stage for a future power tussle amongst the siblings, with Fox News, a pivotal asset, likely being at the core of these disagreements.
In the broader Murdoch narrative, James Murdoch has notably distanced himself from some of the conglomerate's editorial choices. This came to a head when he criticized the family-owned media outlets for their portrayal of the Australian bushfires in 2020 and subsequently resigned from News Corp's board, citing disagreements with editorial and strategic decisions. Reports from major publications like the New York Times and Financial Times suggest a deep-seated rift between the brothers, further magnified by James Murdoch's comments about media entities spreading misinformation in the context of the January 6th U.S. Capitol incident.
The Murdoch Family Trust, which will be instrumental in the future power dynamics within the Murdoch empire, commands eight votes. While Rupert Murdoch controls half of these votes, the remainder will be inherited equally by his four eldest children, granting them significant say in the empire's future. This trust not only holds significant shares in News Corp and Fox Corp but also encompasses other assets like the Cruden family farm and Rupert Murdoch's art collection. Given the dual-share system of News Corp and Fox Corp, the children will own a mix of both non-voting Class A and voting Class B shares.
Alice Enders, the head of research at Enders Analysis, provides a perspective on this convoluted situation, suggesting that the real succession showdown isn't imminent but rather a looming eventuality.
This article was originally published on Quiver Quantitative