How the Murdoch family found themselves in a legal battle over the future of Fox

Sarah Ellison, Jeremy Barr
| Washington Post

When James Murdoch retired from the family business, he made it clear that he disagreed with the direction the company was taking.

The youngest son of conservative media magnate Rupert Murdoch left his executive role and later his board seat, issuing statements criticizing reporting at Fox News and other Murdoch properties. He specifically criticized their Australian newspapers’ “continued denial” of climate science during a season of massive bushfires. He quickly reinvented himself as a center-left do-gooder, donating to environmental and pro-democracy causes.

But even in his unofficial exile, James remained a potential threat to his father’s plans to tie the company’s future to his eldest son and ideological soul mate Lachlan, the chairman of News Corp and executive chairman and CEO of Fox Corporation.

Their attempt to prevent James’ liberal politics from undermining the right-wing market position of flagship channel Fox News has now escalated into a wider feud within the Murdoch family.

The revelation of a secret legal battle between James and his two older sisters against their father and brother in Nevada probate court, first reported by the New York Times, has led to widespread speculation about what the siblings would do with more influence over the company. Would they try to bring Fox News and their other media companies closer to the center?

People close to James say he and his sisters, Elisabeth and Prudence, are primarily concerned with challenging what they see as a power grab by their brother and father.

“It forced them into a position they didn’t really want to take,” said Paddy Manning, a biographer of Lachlan Murdoch.

The feud will go to trial in Nevada in September after previously unreported settlement negotiations went off the rails, according to two people familiar with the matter, who spoke on condition of anonymity to discuss sensitive family matters.

Similar talks failed years ago, when Lachlan attempted to buy out his brother and sisters.

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Rupert Murdoch, now 93, started his business with a newspaper in Australia and has since built a global business that has influenced politics and culture on three continents. The company includes Fox, the Wall Street Journal, the New York Post, the British tabloid The Sun and a host of television stations and other brands.

But in a sense, the conflict is related to the same questions and tensions that arise in every family business:

Who will take over? How much will the founder be allowed to rule from the grave? And perhaps most importantly, how will multiple heirs agree on what to do with their inheritance?

“Many of the difficult dramas in family-run businesses play out within a generation — laterally, between siblings,” said Jeffrey Sonnenfeld, a professor at the Yale School of Management.

Although Murdoch has long indicated that he wants one of his children to succeed him, it was never a given that this would be his eldest son.

Lachlan, now 52, left the family business nearly a decade after feeling undermined in a 2005 corporate dispute with some of his father’s more senior executives. Meanwhile, James Murdoch, now 51, rose to become CEO of the family’s European and Asian operations, often trying to expand the business. But his ambitions were dented when a phone-hacking scandal involving the family’s London tabloids stopped them from acquiring Britain’s largest pay-TV provider.

Ultimately, in 2015, Rupert gave both sons roles within the company: James as CEO and Lachlan as his co-executive chairman. When he realized that the brothers were increasingly at odds with each other, he resolved this by selling 21st Century Fox to Disney. This left James with no role, which eventually set in motion his departure.

But though he has officially left the company, James has equal voting rights with Lachlan on the Murdoch family trust that manages the business. So do their sisters: Elisabeth, 55, who briefly worked for the company, and Prudence, 65, who never did.

Lachlan is the only Murdoch child still working in the family business. He was also the only one of the four eldest children to attend their father’s wedding to his fifth wife, retired molecular biologist Elena Zhukova, in June. (Murdoch also has two daughters in their early 20s with his third wife, Wendi Deng. They have equal financial interests in the trust, but no voting rights.)

And he is the one who most shares his father’s conservative political views.

Rupert Murdoch is seeking to change the trust’s structure, according to three people familiar with the family dispute. In sealed court filings, he argues that the only way to preserve the company’s value for his heirs is for Lachlan to become its sole overseer.

One of those people told The Washington Post that the billionaire has made it explicit in court documents that it is important to maintain the company’s conservative stance.

All three worried that if he died, the other three adult children would drown out their brother.

The Times cited a sealed court document it obtained describing Rupert Murdoch’s concerns that a “lack of consensus” between the siblings would “affect the strategic direction of both companies, including a potential reorientation of editorial policy and content.”

Last month, Nevada’s probate commissioner said that if Rupert Murdoch could prove he was acting solely in the best interests of his heirs, he could amend the trust, according to two people familiar with the family discussion.

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But changing the trust terms is a highly emotive issue for the Murdoch children, they say – even though it would only affect their voting rights and not their financial interests – which has led to their fierce resistance in court.

When her father Elisabeth Murdoch told her about his plans to overhaul the trust fund, she responded in colorful terms to express her displeasure, according to a source familiar with the exchange, which was first reported by the Times.

“There was never a conspiracy to overthrow Lachlan,” said one of the people close to the Murdoch family. “But (Lachlan and Rupert) created what they feared by bringing the lawsuit.”

A spokesman for Elisabeth Murdoch, who runs a production company in London, declined to comment.

She does not share her brother Lachlan’s conservative political views, according to two people who have spoken to her in recent months, but she also has little desire to get involved in the family business again.

She finds the politics of some of Murdoch’s properties “obscene,” one said, “but she has managed to draw a line and distance herself from it.”

“Liz tried to get Rupert to focus on his legacy,” said Manning, the biographer, adding that she had tried to “be the peacemaker” and “build bridges between the siblings, and now this.”

Less is known about Prudence’s political leanings. She tends to stay out of the family feuds, but is close to her sister.

James is committed to the environment, but he also expresses concerns about the role of conservative media in spreading false claims about voter fraud in the 2020 election.

“The ransacking of the Capitol is proof that what we thought was dangerous is indeed very, very dangerous,” he said in a 2021 interview. Without naming Fox News — which has faced major defamation lawsuits from voting technology companies and paid $787.5 million to settle one last year — he added that “those media outlets that are spreading lies to their audiences have unleashed insidious and unchecked forces that will be with us for years to come.”

A spokesman for James Murdoch declined to comment.

However, it is unclear whether the siblings are primarily politically motivated in their challenge to their father and brother.

Those close to James note that he ran the Murdoch business in Europe when it threw its weight behind Tory candidate David Cameron rather than Labour’s Gordon Brown. Today, he and his wife Kathryn are major funders of Bulwark, a conservative anti-Donald Trump publication.

Meanwhile, he has told colleagues in recent years that he was disappointed with the strategic decisions his brother made at Fox Corp and News Corp.

Media experts say any attempt to shift Fox News in particular more to the center-right could ultimately erode viewership and hurt the company’s profits.

Fox News faced such a public uprising when its political analysts correctly named Arizona for Joe Biden on election night 2020, causing some viewers to temporarily tune out channels they saw as more Trump-friendly. Emails and text messages released as part of one of the defamation lawsuits showed that top executives — including Rupert Murdoch — noted the trend with concern.

“At some point you become afraid to do something that offends your audience,” said Charlie Sykes, a former conservative radio host who now contributes to the liberal-leaning cable news network MSNBC. “If you deviate from what the audience wants, there’s going to be a huge backlash and consequences. And if the audience is demanding that Fox News become a MAGA safe space, there’s going to be enormous pressure.”

Bill Grueskin, a journalism professor at Columbia University and deputy editor of the Murdoch-controlled Wall Street Journal, said he saw a future for Fox that would reimagine news from a conservative perspective.

“It strikes me that there is a way to create a conservative news channel that doesn’t slide into the swamps that have already cost Fox $787.5 million in lawsuits,” he said.

But, he added, “it all depends on who’s running the company. It sounds like if it’s Lachlan, things won’t change much, but if it’s James, things will change a lot.”

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