Real-life 'Succession' ends: Lachlan Murdoch takes control and siblings take cash
The agreement, announced on Monday, ends a family brawl over who will control one of the most high-profile global media groups and puts to rest questions of succession within the Murdoch family after its patriarch's death
Highlights:
- Three Murdoch siblings to receive $1.1 billion each from stock sale, source says
- Lachlan, Grace, and Chloe Murdoch benefit from new family trust
- New Murdoch trust valued at $3.3 billion, source says
The Murdoch family has reached a deal that will see Rupert Murdoch's politically conservative eldest son Lachlan Murdoch cement control of the family media empire that includes Fox News and the Wall Street Journal.
The agreement, announced on Monday, ends a family brawl over who will control one of the most high-profile global media groups and puts to rest questions of succession within the Murdoch family after its patriarch's death.
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The drama is considered to be one of the inspirations for the television series "Succession," about the infighting of the members of a media dynasty. Its real-life resolution preserves the conservative tilt of Murdoch's media outlets.
Under the deal, Rupert's children James Murdoch, Elisabeth Murdoch and Prudence MacLeod are each expected to receive about $1.1 billion in proceeds, according to a source.
They agreed to sell their personal holdings in Fox and News Corp over a period of six months, according to the announcement.
As part of the deal, the companies said on Monday that the children would receive cash from the sale of about 16.9 million shares of Fox Corp Class B voting stock and about 14.2 million shares of News Corp Class B common stock. The sale, priced at a roughly 4.5% discount to the last closing price of both companies, raised around $1.37 billion.
A new family trust will be created to benefit Lachlan Murdoch, and his younger siblings Grace and Chloe Murdoch, who are Rupert's children from his marriage to Wendi Deng Murdoch. This trust, worth about $3.3 billion according to the source, will hold 36% of Fox's Class B common stock and 33% of News Corp's Class B shares, the companies' statements said.
COURTROOM DRAMA
A battle over Rupert's global television and publishing empire played out last autumn in a Reno, Nevada, courtroom, where a judge considered the contentious matter of succession.
Murdoch, 94, attempted to change the terms of the family's trust, which was set up after his 1999 divorce from his second wife, Anna, and holds significant stakes in Fox News parent Fox and Wall Street Journal owner News Corp.
Under the original trust, News Corp and Fox voting shares would have been transferred to Murdoch's four oldest children - Prudence, Elisabeth, Lachlan and James - upon his death.
Murdoch worried that three of his heirs, James, Elisabeth and Prudence, could mount a coup to oust Lachlan, who serves as executive chairman of Fox and chairman of News Corp.
Murdoch had proposed an amendment to the trust that would block any interference by Lachlan's siblings, who are more politically moderate, according to the New York Times, which obtained a sealed court document detailing the succession drama.
A Reno, Nevada, probate court rejected that plan in December, saying that Rupert and Lachlan had acted in "bad faith" in seeking to amend the irrevocable trust. That decision created a fresh opening for settlement talks, according to the source.
Fox News continues to be the number one US cable news network, playing an influential role in US politics, particularly among Republicans who prize its conservative-leaning audience.
"You know that there will always be a conservative guardian of Fox News. And frankly, if I were a shareholder, I would really think this was a very good move," said Claire Enders, CEO and founder of UK-based media research firm Enders Analysis.
