Murdoch
Murdoch resigns, the start of a dynasty or the beginning of a family feud?
Rupert Murdoch has announced that he is stepping down as Chairman of Fox and News Corp, and his oldest son, Lachlan will take over. Is this the end of the 71 year career of Rupert Murdoch? Unlikely. Although his son will take over the day to day operations as Chairman, Rupert will stay very much in charge. However the real drama is likely to take place on Rupert’s death.
Rupert has four children, Prudence, Lachlan, Elizabeth and James. Each became very wealthy when 21st Century Fox was sold to Disney for $71 billion at the top of the market in 2019. Since then the publising businesses have been in decline. But each child has sufficient funds to start and continue litigation against each other if they fail to agree on the future of the business following Rupert’s death. Currently Rupert remains in voting control of Fox and News Corp, but it appears that this will be divided equally between his four children on his death.
The children will then need to decide whether to revive the businesses, or sell them either in whole or in part.
From my experience as a succession lawyer to successful entrepreneurs such as Rupert Murdoch, it is not the money the kids will be fighting over, it is control. At the moment this rests with Lachlan, but will James be content to stand by and let his older brother take charge? It was James who set up the 21st Century Fox deal and according to the Economist, is more savvy than his older brother. If he gets the support of his other siblings, he could oust Lachlan.
The fate of the business and its future will come down to sibling alliances.
In my experience if Murdoch wanted to save his legacy as a business he should only give voting rights to those of his children who want to keep the business going, and give the others cash. But maybe he it not convinced that the businesses are worth keeping given that they are losing out to digital platforms. Maybe he wants the kids to thrash it out and the businesses will be kept or sold in whole or in part, by whoever wins the sibling rivalry!