A scathing legal finding released to a sealed court in Reno, Nevada, last Saturday has sown the seeds that could unravel the global Murdoch media empire.
Its architect — Edmund J. Gorman Jr (known as “Joe”), an obscure probate commissioner in Nevada’s Second Judicial District Court — has set the stage for the denouement of the century-old Murdoch dynasty with his conclusion that Rupert and Lachlan Murdoch acted in “bad faith” when they tried to alter the family’s irrevocable trust. This change would have given Lachlan control of the empire, instead of adhering to the trust’s terms that divide control equally among Rupert’s four oldest children, Lachlan, James, Elisabeth and Prudence — referred to in the proceedings as the “objectors” — after his death.
The New York Times today reveals commissioner Gorman’s unambiguous finding (which could be appealed in court) that Lachlan Murdoch initiated a plan in the middle of 2023 based on “a dishonesty of purpose and motive”, to consolidate his leadership of News Corporation and Fox Corporation by amending the trust under a ploy they called “Project Family Harmony”.
According to the NYT, Gorman concludes that:
The effort was an attempt to stack the deck in Lachlan Murdoch’s favor after Rupert Murdoch’s passing so that his succession would be immutable. The play might have worked; but an evidentiary hearing, like a showdown in a game of poker, is where gamesmanship collides with the facts and at its conclusion, all the bluffs are called and the cards lie face up … The court, after considering the facts of this case in the light of the law, sees the cards for what they are and concludes this raw deal will not, over the signature of this probate commissioner, prevail.
Where does this bombshell finding leave the future of the century-old conservative media empire that meddles ferociously in the politics of the US (Fox News and the New York Post), the UK (The Sun and The Times) and Australia (The Australian, Sky News and a slew of capital city mastheads)?
This is how a fly on the wall might view the current state of play in Murdochland:
- The leadership of both Murdoch companies, News Corp and Fox (combined market capitalisation of around US$40 billion), is now deeply uncertain as a result of the commissioner’s ruling. The non-Murdoch shareholders — who own more than 80% of each company — have woken up to the news that their chairman is likely to lose his job when his father dies, the family that controls those companies’ voting shares is locked in a bitter legal fight, and control of those companies is precarious. And shareholders and markets hate uncertainty.
- Lachlan woke up on Saturday to the news that his three siblings are likely to decide his fate after their father dies, and probably will give him the boot. Meanwhile, he has to run the family dynasty while locked in a legal battle with siblings who have just read the commissioner’s verdict that he and their father “demonstrated a dishonesty of purpose and motive” as part of a plan to usurp their rights. Why would Lachlan want to stay in this role under those conditions?
- Given the maelstrom of all this uncertainty, and given he still apparently has his marbles at the age 93, why wouldn’t Rupert draw a line through the mess that is his family and put the companies, or their main assets, up for sale? Fox News, in particular, is now probably more valuable than ever before as it enters a new Trump presidency.
- If that happened, where would it leave the fate of News Corp’s Australian newspapers? Would they be sold or privatised? Who might buy them? How would that affect Australian politics — and society?
- Unlike most family legal disputes, this is not a fight about money. It’s about whether the Murdoch media, especially Fox News, remains intractably conservative in its politics. As reported by The New York Times, Rupert read a statement to his children at a special meeting of the trust late last year which read in part: “I love each of my children, and my support of Lachlan is not intended to suggest otherwise. But these companies need a designated leader and Lachlan is that leader.”
This remains the family story that keeps on giving.
Eric Beecher is the chair of Private Media and the author of The Men Who Killed The News: The inside story of how media moguls abused their power, manipulated the truth and distorted democracy.
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