Murdoch family resolves messy succession battle with new family trust
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Photo of Lachlan Murdoch. Credit: Patrick T. Fallon/Bloomberg via Getty Images
News Corp and Fox Corp. on Monday announced that the Murdoch family resolved its dispute over the succession of both companies by establishing a new family trust that grants corporate control to Rupert Murdoch's conservative son, Lachlan Murdoch, while paying out his three other eldest children for their shares.
Why it matters: The resolution ensures that Lachlan Murdoch will remain in control to preserve his father's conservative legacy at both companies.
- It also ends all messy legal proceedings related to the trust.
How it works: With the new agreement, three of Murdoch's older children — Prudence, Elisabeth and James — will receive significant cash payouts for their shares and will step away from their roles at both companies.
- Each of those siblings will become beneficiaries of new trusts funded in part by the sale of roughly 31 million Class B shares of the companies previously held by the old family trust.
- The agreement also prevents them and their affiliates from acquiring shares of either company moving forward.
Zoom in: The new trust that hands the keys over to Lachlan Murdoch will expire in 2050. Murdoch's youngest children, Chloe and Grace Murdoch, are included in the new trust, but voting control with respect to Fox Corp. and News Corp will rest solely with Lachlan Murdoch.
- Rupert Murdoch, 94, will continue in his role as chairman emeritus of both companies.
- The boards of both Fox Corp. and News Corp endorsed the resolution.
Zoom out: The agreement ends a chaotic family court battle over the future of the companies.
- Rupert Murdoch last year attempted to change an irrevocable family trust to ensure Lachlan Murdoch would carry out his conservative legacy at both companies. Prudence, Elisabeth and James fought their father over the matter and ultimately won in court.
- The trust, established in 1999, was created as a compromise amid Rupert Murdoch's divorce from his second wife, Anna dePeyster (neé Torv).
- Lachlan, Elisabeth and James Murdoch all share dePeyster as a mother. Prudence Murdoch is Rupert Murdoch's eldest child from his first marriage. Chloe and Grace Murdoch are Rupert's children from his third marriage to Wendi Deng.
- Lachlan and his three siblings — Elisabeth, James and Prudence — were equal beneficiaries of the old trust, which had roughly 40% voting stakes in News Corp and Fox Corp.
What to watch: The new agreement dilutes the Murdochs' family voting shares by a single-digit percentage in both Fox Corp and News Corp., but Lachlan Murdoch is still set up to have voting control of both companies.
