Murdoch Family Trust: The real battle for succession has yet to begin

21st Century Fox Executive Co-Chairman Rupert Murdoch (L) and his son Lachlan attend the first day of the annual Allen & Co Media Conference on July 8, 2015 in Sun Valley, Idaho. REUTERS/Mike Blake/File photo Get license rights

NEW YORK, Sept 22 (Reuters) – The appointment of Lachlan Murdoch, the eldest son of media titan Rupert Murdoch, as sole chairman of News Corp ( NWSA.O ) on Thursday heralded immediate questions about who will run News Corp. and Fox Corp ( FOXA.O ): a sprawling media empire that includes some of the world’s most powerful brands.

But the management change doesn’t resolve another potential power play that could occur in the wake of Rupert Murdoch’s death, framed by a document called the Murdoch Family Trust.

The Reno, Nevada-based trust offers a scenario where a potential acquisition could occur. It is the vehicle through which the senior Murdoch controls News Corp and Fox Corp, with approximately 40% of each company’s voting stock. Murdoch also holds small stakes in companies outside the trust.

After Rupert’s death, News Corp and Fox Corp voting shares will be transferred from Murdoch to his four-year-old children, Prudence, Elizabeth, Lachlan and James – creating a situation where three children can avoid a fourth vote. Lachlan Murdoch runs Fox Corp and is the sole chairman of News Corp, but the battle is over the future of the companies.

The Murdoch Family Trust has eight votes: four of them are controlled by Murdoch, and the remaining four are controlled by his four children from his first two marriages. Murdoch’s younger daughters Chloe and Grace, from his third wife Wendy Deng, do not have voting rights in the trust.

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According to Alice Enders, head of research at Enders Analysis, the four eldest children will hopefully receive an equal share of Murdoch’s vote.

In addition to stakes in News Corp and Fox, the trust also includes the Gruden family farm near Melbourne and Murdoch’s art collection, according to a January 2023 Financial Times report.

Fox and News Corp have a dual stock system, with non-voting Class A shares and voting Class B shares. The Fox and News Corp shares owned by Murdoch’s children through a trust are a combination of two classes of stock.

“It doesn’t look like a real succession scene right now, right now,” Enders said. “In the future I will say.”

Reporting by Helen Koster in New York; Editing by Stephen Coates

Our Standards: Thomson Reuters Trust Principles.

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Helen Koster is a media reporter at Reuters, where she writes a mix of spot news, corporate and analytical stories. He was previously a senior editor on the Reuters commentary team, where he assigned, edited and wrote analysis pieces. Before joining Reuters, Koster served as a senior writer at Forbes, where she wrote journalism and Internet stories and blogs on the intersection of business and social issues. A graduate of Princeton University, he has reported from six countries, including Pakistan, India and Greece. Contact: 9178417220

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