Rupert Murdoch’s plan to alter the family trust and cement his eldest son Lachlan as the dominant force in the global media empire has failed after a ruling in Nevada. Murdoch’s representatives say they intend to appeal the decision, delivered after months of secretive court hearings and described by some as ‘unparalleled’ in the family’s turbulent history.
Today, media reporter Calum Jaspan on previously unheard testimony from inside the courtroom, including plans reportedly inspired by the hit TV show Succession. And whether Murdoch’s bid for control beyond the grave has had the opposite effect than intended: further galvanising his children James, Elisabeth and Prudence against Lachlan.
From the newsrooms of the Sydney Morning Herald and The Age. This is the morning edition. I'm Samantha Salinger Morris. It's Wednesday, December 11th. Rupert Murdoch's plan to alter the family trust and cement his eldest son, Lachlan, as the dominant force in the global media empire has failed after a ruling in Nevada. Murdoch's representatives say they intend to appeal the decision, delivered after months of secretive court hearings and described by some as unparalleled in the family's turbulent history. Today, media reporter Callum Jaspin on previously unheard testimony from inside the courtroom and whether Murdoch's bid for control beyond the grave has had the opposite effect than intended, further galvanising his children James, Elisabeth and Prudence against Lachlan. So Callum this highly secretive family trust court case. It was well underway in September, but now we've got a result. We're going to get to that in a moment. But first off, can you just briefly tell me what was this case about?
The move was an attempt by the 93 year old to cement his eldest son, Lachlan's, control of the family empire after his death and secure their media assets. Conservative positioning. It was the most controversial step to date in Rupert's decades long succession drama, enshrining Lachlan as the first among equals, to borrow a phrase from the man himself, handing voting control over the family assets in the event of his death. The trust currently would divide control of the company or the assets of the family equally among Rupert's four eldest children, those being Lachlan, James, Elisabeth and Prudence, who is his daughter from his first marriage. His youngest two, Chloe and Grace, from his third marriage to Wendi Deng, have a financial share, but they don't have any voting rights, so without a change, Lachlan's siblings could effectively remove him from his position of control. But Rupert wants to ensure Lachlan isn't ousted, with the pair more closely ideologically aligned.
And just to confirm.
Before we move on, I mean, Rupert had actually established this family trust in 2006, in negotiation with his second wife, Anna, expressly with the purpose that it would help avoid any messy succession, like battles with his children over control of the Empire after he dies. Is that right? Yeah.
That's right. And part of the negotiation was that it would only be those four eldest children that would have any voting rights after his death.
Okay, so tell us what the commissioner actually ruled on Saturday, because I know I was taken aback by some of the language in his decision, which was quite scathing. So tell us what he said.
Well, in short, the bid failed.
We have some breaking news from the US where Rupert Murdoch has failed in a bid to change his family trust. He has lost his bid to change his family trust to grant The New York Times a commissioner from Nevada, ruling against Murdoch's attempt to consolidate his eldest son Lachlan's control over his.
Before all this kicked off, we knew one thing for sure was that for Rupert to be able to amend this irrevocable trust, he would have to prove he was doing so in good faith. He argued that by ensuring the conservative slant, as we've said, it would be financially beneficial for all the beneficiaries of the trust. So the best way to ensure that was keeping Lachlan in charge. The probate Commissioner, Edmund J. Gorman Jr, ruled on Saturday US time that Rupert and Co had not proven this and in fact that the bid was being done in bad faith. In his words, it was pretty scathing, as you say. The New York Times reports. The 96 page document includes Gorman saying the plan to change the trust was a carefully crafted charade. I quote, to permanently cement Lachlan Murdoch's executive roles inside the empire, regardless of the impacts such control would have over the companies or the beneficiaries of the family trust.
So is it safe to say that the Commissioner actually confirmed what many people had secretly, and perhaps not so secretly, thought when news of this legal challenge first broke, which is that Rupert Murdoch was actually trying to rule from the grave, essentially, rather than trying to ensure that his companies would remain profitable and that this would benefit all of his children.
Yeah, I think so. I mean, interestingly, the judgment actually ruled that it was Lachlan that initiated the bid to change the ruling after he and his father had grown increasingly paranoid that James Lachlan's younger brother wanted to undertake a coup to oust him from control of the family's assets with the help of those other two siblings. He wrote that Murdoch and Lachlan's representatives on the trust demonstrated a dishonesty of purpose and motive in abetting their plan, and the move to give Lachlan power was to protect his father's posthumous legacy by keeping the family empire on its conservative course.
And so this is sort.
Of ironic, I guess, because the last time we spoke, you said that Rupert was actually he would have only mounted this challenge to amend the family trust in the first place if he thought that there was a chance that the three more moderately leaning children would, you know, try to overrule Lachlan Murdoch after Rupert's death and that it appears to have actually galvanized the three children together and only increased the chance that if he was unsuccessful in this bid, that this overruling might actually happen. So do you think now that Rupert's actually lost this challenge to the family trust, do you think this has doubly motivated Elizabeth, Prudence and James to gang up on Lachlan after Rupert dies?
Well, I think so. And again, it's great that we've sort of only been offered a rare insight into Lachlan and Rupert's thinking, ironically, as you say, because they're the pair that actually initiated the whole thing. As I said, Gorman notes that it was actually Lachlan that kicked it off himself because they had become paranoid about James, who was once considered maybe a better fit to actually run the company. The unknown, of course, is when Rupert will actually die, as none of this will will come into effect before then.
And I really want to ask you about one of the more surreal revelations that has come out of the court testimony. Can you tell me about the TV show that, somewhat ironically, I think inspired James, Elisabeth and Prudence to think about how they might handle the public relations strategy after their father dies?
Yeah. The hearing in Reno, which began in September, it was highly secretive. So there was no media in the courtroom. So we didn't actually get any details about what was happening or what was being said at the time. But it did here, according to The New York Times, that the siblings had started to discuss a public relations strategy for their father's death in April 2023, which was prompted by an episode of the HBO show succession, which is sort of widely thought to be inspired by the Murdochs and the Murdoch dynasty. In that episode, the family patriarch Logan Roy abruptly dies, leaving his family and business in chaos with a bit of a power vacuum that occurs in the wake of his death.
So what we do today will always be what we did the day our father died. So, you know, let's grieve and whatever, but not do anything that restricts our future freedom of movement.
This sent the siblings who were at that point not on speaking terms with their father, into disarray. And again, the New York Times reports that the episode prompted Elizabeth's representative to the trust, Mark Deveraux, to write what they called a succession memo intended to help avoid a real life repeat. There's a quote in there from a text quoted between Lachlan sending to his sister Elizabeth on the morning of the initial trust meeting last year. It says today is about dad's wishes and confirming all of our support for him and for his wishes. It shouldn't be difficult or controversial. Love you Lachlan. Following that, Rupert read a statement during the hearing which said 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.
We'll be right back. And so, Callum, this family trust ruling it really could dramatically change the Murdoch empire, couldn't it? Because it's possible, isn't it, that Lachlan siblings Elizabeth, Prudence and James, they could very well choose after Rupert dies to sell the family's media assets while they still have value. Is that a serious prospect, do you think?
In reality, yes, it could if the appeal fails. And of course, Rupert's lawyers have already signalled that they do intend on appealing it. It could mean, down the line, James will potentially be able to work with Prudence and Elizabeth to take the business in a more moderate direction now. Of course, the whole argument has been that should News Corp go in a more moderate direction, it will sort of join the rest of the pack and it won't have that sort of standout commercial value that it's had over the years by having that sort of more conservative voice. None of James, Elizabeth or Prudence are as sentimental by all accounts, about some of the media assets as Lachlan is.
We'll work on Queensland and and do the best job I can in Brisbane, and we'll see what happens from there. How are you finding it up there? Oh it's terrific. It's a great state and they've got me following the rugby league and drinking forex. And so it's a the the indoctrination in the Queensland is complete.
Lachlan's sentimentality about Australia and the Australian media assets has offered some sort of protection to the local newspapers, which by all accounts don't make a lot of money.
Some of what sets Australia apart is under threat. Our core values, our successes and even our history are under constant attack. Nourishing and defending those core values is extremely important not to do so. Has real world, real bad outcomes.
Those assets still hold influence not only here in Australia, but around the world in the. But they likely if we were talking about the Australian newspapers, they likely wouldn't fetch a big price should they be put up for sale. Now of course, in 2019, the Murdochs sold their film studio assets, 20th Century Fox to Disney for around 70 billion US. And now, of course, Foxtel is up for sale. There's also a sense that they might at some point, if those three were to take charge, um, they could potentially split away Aria Group, which is by far News Corp's most valuable asset. But as someone said to me, look, if Rupert and Lachlan really don't want James to get his hands on these media assets because they're worried what it might do, maybe tarnish the legacy, tarnish the value, then maybe their option is to just sell them in the first place.
And so how do you.
Think, though, that the ruling might impact the Australian media and cultural landscape?
Well, of.
Course, if we do see a change to the leadership of News Corp, which is quite some way away, still it could see some of the most influential newspapers, the likes of The Australian, the Herald Sun, the Daily Telegraph scaled back a little bit. You know, maybe, as I said, with those three siblings that aren't as sentimental towards Australia, they could look to to sell them off. I was speaking to a long time proponent of the News Corp stock investor Angus Aitken, just in the wake of this decision, and he was certainly still quite bullish on the prospects of News Corp being led by Lachlan and Rupert. He said that all the successful investments that News Corp have made over the last seven decades or so have been made by Rupert and Lachlan. So in his case, there isn't as much interest in backing someone like Elizabeth or James.
And so is this the end of it? Then where does this go next?
No, it's not the end of it. Um, immediately we had a, um, a statement from representatives for Rupert, who said they were disappointed in the result and that they intend on appealing it. Commissioner's ruling is also not the final word on the matter. The New York Times reports the commissioner acts as what they call a special master, who weighs the testimony and evidence and submits a recommended resolution to the probate court. It then falls to a district judge to ratify or reject that recommendation, and even then, the losing party is free to challenge the determination so we could see further litigation, further expensive litigation go on for for some time, which of course is great for watchers of News Corp, because I think everyone's interested in seeing this story where it ends.
I saw one report about this legal case say that, you know, this particular battle is unparalleled in the family's history, even though this is a family that has had decades of shifting ideologies and allegiances, in particular, because it really made Rupert's preference for his eldest son, Lachlan, unmistakable.
Yeah, I think it's been sort of widely publicized. And over the years Rupert has commented many times on, you know, his potential successor and, you know, he's quite publicly played off those three siblings, James, Lachlan and Elisabeth against each other to sort of, you know, see who comes out on top. But they've never taken such a serious step to take any of their sort of feuds to court. Previously, I would say that each have sort of been in a more or in a stronger position, but it now feels as though Lachlan is the sort of unequivocal heir and the battle lines have been drawn. I think even the probate commissioner, Gorman, quipped in his ruling that the name for this whole legal attempt, Project family Harmony, he said, was titled, perhaps too optimistically.
Well, thank you so much, Callum, for your time.
Thanks for having me.
Today's episode of The Morning Edition was produced by Julia Carcasole. Our executive producer is Tammy Mills. Our head of audio is Tom McKendrick. The Morning Edition is a production of The Age and The Sydney Morning Herald. If you enjoy the show and want more of our journalism, subscribe to our newspapers today. It's the best way to support what we do. Search The age or Smh.com.au forward slash. Subscribe and sign up for our Morning Edition newsletter to receive a comprehensive summary of the day's most important news, analysis and insights in your inbox every day. Links are in the show. Notes. I'm Samantha Selinger. Morris. This is the morning edition. Thanks for listening.