The Murdoch Succession War is Over, and Fox Crowns its Next Leader

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1:12I'm a rock star now. I'm a little killer. I'm a little more. From Anne Rice's Immortal Universe comes what Vulture calls the most momentous event in fictional rock history. Thousands of fans love you. I want millions. It's my era. Anne Rice's The Vampire List. All new Sundays at 9, exclusively on AMC and AMC+. Stream now. It is Tuesday, September 9th. For years now, we've been talking about these succession issues plaguing the Murdoch family and their conservative media empire. So much so, they made a whole HBO show about it. Rupert is now 94, a spry 94, we are told. And for the past couple of years, he's been locked in family court in Nevada over the terms of his trust, which provided that the media company that includes Fox News, the Fox Broadcast Network, Fox Sports, plus the New York Post and Wall Street Journal, a bunch of other assets worldwide.

2:07It would be split evenly amongst his four adult children. That's Lachlan, Rupert's preferred heir, who currently runs Fox Corp, and James, Elizabeth and Prudence, the three kids who do not necessarily share their father's love of conservative politics and tabloid news. Rupert actually lost a key ruling in Nevada recently, meaning that if he died, Lachlan could be outvoted by his siblings and assets like Fox News could be sold or even turned into a more liberal version of itself. I never quite believed that part, but not anymore. Yesterday, we got the bombshell news that the Murdochs have settled.

2:43There will be a new trust ensuring Lachlan stays atop the empire and the three other kids will be bought out to the tune of about$1.1 billion each. Remember, that's on top of the$2 billion they each got when Rupert sold most of Fox to Disney in 2019. A good deal for the kids, right? That's more than what Rupert and Lachlan were initially willing to pay them, but it's only about 80 % of what their shares were worth at the end of last week. And by creating a complex new structure of the company, Rupert is getting his long-held wish here. Fox News will live on as the incredibly lucrative, incredibly influential media outlet that it is, and it will be free from all that succession drama, so much so that the stock price went up today on the news.

3:26So why did the three kids finally settle? And who's the real winner here? Also, what's next for the Murdoch empire under the eldest boy, Lachlan? I've got Jim Brutenberg here to discuss. Jim's a reporter at the New York Times and has been leading on all the coverage of the Murdoch mess, including the news yesterday of the settlement. So today it's peace at last in the Murdoch Fox family. From The Ringer and Puck, I'm Matt Bellany and this is The Town.

3:57All right, we are here with Jim Rudenberg, writer at large at the New York Times and pretty intrepid chronicler of the Murdochs over, what is this, two decades now? Maybe a little more, a little more, maybe quarter of century. Well, I'm a Murdochologist as well. I have interviewed the brothers. I have done a lot of reporting on them. And I was certainly surprised yesterday when I saw the settlement news. And you write in your piece with your colleague, Jonathan Mahler, that it was the expected outcome, meaning the most logical outcome of this broad family litigation was a settlement. But we hadn't gotten one because it was about more than money, I thought.

4:48Turns out money wins. And the three siblings agreed to take$1.1 billion payouts. Why did they agree to take these payouts now? And why did they not want to continue this fight? As we understood it, Jonathan Mahler and I, who've been covering this part of the story since 2019, the view when Rupert, let me take you back, sorry, but to when Rupert very wisely sold his studio businesses to Disney. Yes,$85 billion deal. Yeah, and before that, you yourself had written a story about James and Lachlan were running the company together. Oh, yeah. It was a united front. We are doing this together. We have full support of our father, and he wants us to run this company forever together.

5:36Turns out, not so much. But, you know, they were giving it a go at that point, right? Sure. But things did fall apart, and then Lachlan took over what was left of the company after the Disney sale. And the view as we always understood it, especially from James, his brother James, James, who was primed to be the successor himself one day, was, okay, buy me out of this thing. And you go take it, Lachlan. Because all James's fortune inherited from his father and his two sisters, Liz and Prue, was tied up in the trust that controls the Rupert Murdoch empire. And they are not free to sell those shares until the year 2030 to outsiders at least.

6:18So they said to Lachlan, or James led it, Liz and Prue went along, Lachlan, buy us out. we'll go away. Bye-bye. You take it. In fact, as we reported in 19, they drew up bankers, drew up papers. They were close to doing it. Lachlan, at the end of the day, just said no. He cited cash. There were suspicions in the family that maybe he didn't even really want to do that. So the position for the beginning, to be fair, from Lachlan's siblings was, buy us out, we'll go away. But alternatively, don't buy us out. We don't want to be deriving our fortune from what Fox is. Yeah. James, in particular, was very embarrassed by the content of Fox News in the U.S.

6:59And James's thing was, and the sisters seemed willing to go along with this, but that wasn't solid yet, that when dad dies, control would have reverted to all four siblings. Then Lachlan would be outvoted three to one potentially. And James would have rested the company back and tried to reorient Fox. Now it's over interpreted that James was, I never understood this to me. And James wanted to turn Fox News into CNN or the BBC or MSNBC. Never. But he wanted a more sort of traditionally conservative network, less conspiratorial, less pro Trump, less of what we know as Fox News today. Yes. Like on January, January 6th, the lead up to January 6th, especially Tucker Carlson's show would have looked a lot different with James running it.

7:47Still would have been conservative. He wasn't saying we're going to totally kill the golden goose. Just let's make it more responsible. Maybe we'll lose some rating points. That's as we understood it. So that was the position. Now, in the popular conception, it became James and the siblings will come in, sweep in and save the day in liberal America. This was a view. Save the day and reorient Fox. And that wasn't they always had had this idea that we buy us out and we'll go. But they had this ruling in Nevada. The Nevada judge pretty summarily rejected Rupert's effort with Lachlan to revise the trust to put him in control.

8:24So the question then is the leverage was all on the objecting children, as they were called, where all they had to do was sit tight and wait for their father to die. He's 94 years old. That would probably happen before 2030. And if it did, they would have been able to wrest control of the company away from their brother. And if it was after 2030, then they would have been able to sell their shares on the public market and potentially screw them over by handing the company to outsiders. Why didn't they just sit tight and wait? The important thing to understand, Rupert and Lachlan tried to make this change to the trust, which, again, supposed to be all for inherit control, shared with Lachlan.

9:11that they tried to change this indelible trust in Reno because Rupert and Lachlan, and I always wondered about this, said, we can't have that, especially Rupert. I can't have this liberal son in a position to potentially take over and change my legacy. Yeah, Rupert's quote is, Fox and our papers are the only faintly conservative voices against the monolithic liberal media. I believe maintaining this is vital to the future of the English-speaking world. Pretty big mission statement there. by the way for all those who always said Rupert he's just a businessman he doesn't care well he definitely at this stage of his life he cares yeah and Lachlan has all sorts of quotes out there basically saying the same thing and in my dealings with Lachlan I've always found him to be very pragmatic about it when you sit down with him I've said this before it's all about we have the number one news network we have the number one broadcast network we have the number one sports group like he talked about it in numbers, but recently he's also talked about it in terms of us against them.

10:16Everyone's doing X. We are the only ones doing Y. We have to maintain that uniqueness of the Fox media brand. Very much. And he's believed to be a bit more ideological than he lets on. And some have said, I think this is disputed, but some have said, well, he's even more ideological than his father. I don't know. I mean, Rupert sounded pretty ideological in what you just read. But why didn't the siblings sit tight? That's my question. What about their psychology? Or has this always been about the money and it was all leverage and they just wanted to get that number high enough where they could feel good about themselves?

10:51So there's a debate about that, okay? But just to finish my thought, and I'll get to it, is what their view of Rupert's attempt to change the trust was Rupert and Lachlan are trying to get control for free without paying us. That was their view all along. When Rupert and Lachlan lose this bid, a commissioner in Reno says, this is bad faith. This is unheard of. You can't do this. The three siblings were going to do exactly what you said. We've got maximum leverage. If Lachlan runs out, he's going to have to pay us big time. But here's what happens. And we reported this in this morning's story. The case didn't end.

11:27The commissioner's ruling in Reno was never final. It always needed sign-off from a higher-up judge. And often what happens in these Reno probate, this was called probate court cases, is the judge just signs it. Done. There you go. Rupert's legal team made a really aggressive bid to get this ruling thrown out. Bill Barr was very, the former attorney general who have been involved in representing Rupert on the trust boards. That's how these things work. It was part of this case, too. Yeah, 50 lawyers, you noted. 50 lawyers on the docket. Not cheap. Each billing, two grand an hour. But I tell you, there was a day I was there for the trial, which was closed to the press exactly a year ago.

12:09And there was one day, all the press had left. It was like day four. I was like the only one left in town who was covering this. And I just went, took a walk at like six o 'clock at night. and the black cars around the little courthouse in Reno went all the way around. That's hilarious. It's like the Toronto Film Festival for a premiere. What? Like literally, it was insane how many black cars there were. So what you're saying is it wasn't a certainty. They had leverage, but it wasn't a certainty. It was draining them financially to fight this fight. And when they got up to a number, they said, okay, we'll do that.

12:42Yeah, so they got to a number. But one last thing I'll say is that there's a really nice wrinkle in this, nice, I mean, in terms of storytelling, not for any of the members. When James Murdoch, after they won, spoke to the Atlantic magazine, we had written a story based on all the court transcripts. A lot of stuff is already out there. But James went and talked to the Atlantic and put his name to sealed information from the trial that no one was supposed to talk about. And that drew potential sanctions against James in the ongoing appeals process. So things were starting to look very cloudy for them.

13:13So then there's a meeting at the Harvard Club as they're now, the appeal's moving along. They're all going to have to show up. It's like out of a scene from Succession. It's crazy. Of course, the Harvard Club. Of course, the Harvard Club. But James, by the way, went to Harvard, did not drop out. Yeah. You can almost hear Rupert telling them that they're not serious people. Yeah. Especially now, like Harvard Club and Fox Brand do not go hand in hand right now unless Harvard emerges as a changed institution. Oh, but we all know the behind the scenes stuff doesn't match the Fox brand. We've known that forever.

13:45Exactly. Exactly. It matches succession for good reason. So then finally, they're able to come together. Now they meet at the Harvard Club, their representatives, not them. Their representatives meet at the Harvard Club. Can we find our way to a deal? We're looking at these appeals. Things look pretty good. And the number, as I understand it, they're in the ballpark of this number. By the way, the Fox stock has gone way up. So Lachlan's in a bit of a better position. Oh, I imagine the stock is way up because it secures the future. Well, as they're negotiating terms, so then giving them each a billion dollars is less of a lift.

14:20But there's some disputes over taxation. It gets really crazy. All right. But you know what? I think a billion dollars each is cheap. I thought it would be more. This was 80 % of what their shares were worth last Friday before the announcement. So it's not even what their current shares are worth. And this is forever. Fox News is pumping out how much profit a year? Two billion? Like, this is forever. And they are walking away from their birthright here for a billion dollars? Well, it's 50 % of their personal fortunes from the Disney deal. Yeah, they got two billion from the Disney sale. Yeah, but you know, the Murdoch family trust by my math, big asterisk there, I'm a writer, not a mathematician, was worth between seven and eight.

15:12They have, depending on the stock, they have half of it because three people, there are six members of direct inheritors of the trust. Lachlan, his two youngest sisters, Grace and Chloe, who have never had any vote in power. Who are now in their twenties and they're the Wendy Dang children. yeah who will be very interesting to watch maybe a decade from now there'll be a sequel on hbo on hbo peacock paramount there will be a sequel to succession will we be having this conversation as older men um but anyway that'll be good though the story always this story never oh it would be amazing if wendy dang's children end up outsmarting them all and lachlan is on the street this story does have a way of throwing those kind of twists but anyway um yes okay it's 1.1 billion dollars but it's not that far off from their share of the trust yeah maybe i was overestimating the ultimate value i just see the positioning of fox in the landscape right now and they're the only ones making real money in cable news and it is an outlier here they're going to be able at some point, I mean, obviously, cable is going away, they will likely be able to transition that brand over.

16:28Lachlan's already laying the groundwork for that. And yeah, the newspapers don't really make money except for the journal. But this is a real business, at least for now. And now Lachlan gets it. So let's twist here. Let's turn to the future. This new trust will expire in 2050. So Lachlan is retaining control of this empire for a long time. And what can we expect? You say no initial change right now, but freeing up the uncertainties around the company, I think, is going to give him some headwinds here. Do you expect Lachlan to make changes or to kind of start to put his own stamp on the company?

17:14As long as his father's alive, I don't see him doing a ton. And I'll tell you why. He is so devoted to his father. Oh, in his office, he had a giant picture of him over his desk. Yeah, very, very devoted to his father and wants to see his father's vision. For instance, when we had written our story about this whole case earlier this year, we talked about the recombination effort. There was a point, I assume again, your listenership will remember this, but they tried to merge the two parts of their empire, which is News Corp and Fox. And that was, as I understood it, I wasn't, it's my opinion. So it's less like I couldn't really put it in a story, but I got the sense that that was Lachlan wanting to bring the thing together for dad in dad's final years.

17:57Because dad never, they split those companies after the hacking scandal. But Lachlan's philosophy is the same as Rupert's, which is what? Give the audience what it wants. Don't get in the way of that. Don't let anything get in the way of that. Yeah, they always, at Fox News, they always talk about the audience. Oh, the audience won't like that. The audience doesn't want to hear opposing viewpoints, that kind of stuff. So those things will stay the same. But Lachlan's more digitally forward. Yeah. I mean, if you look at stuff that he's done, he bought this podcast company, Red Seat Ventures. They're trying to move into that business.

18:29He bought Tubi, which I think has been a very big boon to that company. Not really profitable, but it does lay the groundwork for a digital future there. They just launched Fox One, the streaming app. he took a stake in this Penske Entertainment, the IndyCar company. So they have made moves that I think could be attributed to Lachlan, although I'm sure Rupert is always in the background there with his opinions. I just wonder if they're going to move more into the digital space once Rupert leaves and maybe shuts down the New York Post, which doesn't make money. Maybe he goes into a different, more digital direction.

19:04Yeah. And I think even on those decisions, Rupert's kind of like, ah, boy, go. You know what I mean? Or however. Well, Rupert loves the New York Post. Okay. So here's what I mean by that. He'll make all his moves in digital. Yes, on the newspapers. He'll maintain those as long as Rupert's alive. By the way, the New York Post is like top 10 news property in the country online. It is, but does it make money? I believe it started breaking into the black, but I don't want to venture out. Oh, interesting. I had always thought it lost money, but maybe they figured it out. maybe all the pictures of wardrobe malfunctions and page six breakups.

19:37They're doing well. They're moving to LA. They're launching a California post. I've heard, yeah. They're looking for an editor. Maybe you should apply. I did work there early in my career and it was the most fun I ever had in this business. I'm sure. No, listen, everyone who works for Rupert, even the people who disagree with him politically, very much so, always say good things about him. That he's very supportive, that the politics stuff doesn't enter the conversation if you were not in one of his political arenas. And he has great instincts.

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21:25Spend$250 on your first campaign on LinkedIn ads and get a$250 credit for the next one. Just go to linkedin.com slash the town. That's linkedin.com slash the town. Terms and conditions apply. Here's to me the most fascinating thing about Lachlan in this realm. Whatever the newspapers are doing, losing money, making a little, what they do have still, especially in the UK, but somewhat here through the post because it's actually had some, They have political impact. Oh, the journal too. The journal's the only one that's been like standing up to Trump in that arena. And Trump hates it. Right. I put the journal in a different category than the bombastic, hard right populist.

22:08They give him certain global, like when Brexit happened in the UK, Rupert's papers split the difference, right? The Times, the Daily Times of London was remain. The Sun was leave. and the son, the populist voice, is what always carries the day in this era. So does Lachlan have any interest in the influence he gets from those papers, regardless of their actual capital? What do they really do for the business? Right. Is he willing to lose money on outlets to give him political benefits? Does he want that sway? And that, he hasn't shown yet. And that's, to me, the tantalizing last question for now about Lachlan.

22:46Does he want to be what his father was in terms of a political figure? Yeah. And with Fox News, he has both. There is not a close rival in terms of influence in this country right now. I mean, literally what they say is channeled to the president and put out there as gospel on a daily basis. You know what I wonder about sometimes too, though? Because when you write that sentence now, you say Fox is still hugely influential. You have Joe Rogan, you have the influencers, and they are something that wasn't there. But Fox is still, has a huge audience, its audience is still growing for what it's worth.

23:23When all the others are declining. They're outrating broadcast television. So now the most watched television, over the summer, they were outdrawing the major broadcast networks in prime time. And because of the overall political climate, the advertisers have started supporting Fox in a way that they wouldn't even three or four years ago. Right. So do you think Fox is still hugely influential? Oh, absolutely. I think it's incredibly influential. Doesn't matter that its audience is old. It is the star around which the conservative media universe rotates. and if something is on Fox, all of the other conservative media outlets, including some of the podcasts, including all this, they are responding in many ways to what is on Fox and the stories that Fox highlights and the president watches it and not just watches it.

24:17The president watches it and takes his cues from Fox. If they're talking about a story, he thinks it's important and he emphasizes it. And if they are not talking about something, he won't know about it. And not to mention the fact that like there's a revolving door. The freaking defense secretary was hired because the president liked him on Fox News. I mean, that is insane. So you've got this revolving door plus the constant influence. I think it's still despite the aging audience and despite all the other headwinds in cable TV, it is still the leading influential outlet. Yeah, I would agree.

24:56I also think there's something to be said still for the power of television. Not what it was, but you can't dismiss it. People sitting and vegging out in front of a screen. But have you seen the age demos on it? It's not pretty. But they've always been, oh, but cable news has always been. I know, I know. And they're the ones who vote more reliably. It's true. Yeah, it's true. I know. And, you know, Lachlan, it'll be interesting to see how he treats some of the litigation and some of the risks that Fox has taken under his father, where, although I guess Lachlan was CEO during the Smartmatic and Dominion stuff during 2020.

25:32But Fox has been willing to serve the audience at the expense of their legal liability. And we'll see if that continues. And that's what James had argued because James had said, hey, you say that my way would be bad for the business, but their way cost us a billion dollars almost in legal settlements. And that was James' argument always, but Fox plowed ahead. Yeah, there was, you know, remember around that time, there was a real threat from Newsmax, OAN, of going harder right. The competition for Fox is not CNN or MSNBC. It's on the other end, from the more further right outlets. And they effectively quelled that uprising, I think, after the Dominion stuff and after the election.

26:15And I don't see those other outlets as being as competitive anymore, so much so that one of them sued claiming anti-competitive practices. And that suit was tossed out. Right. There's one thing I'll just leave you with on the court case we just heard about. There's this interesting moment. We saw the transcripts from the appeals hearings. And there's an interesting moment where the judge is saying, wait a minute, but Fox is the golden goose here. And whether it was a basketball company or whatever this is, if Rupert is the best basketball maker that whoever lived, and he thinks his son Lachlan's the one to do it.

26:53Shouldn't he be the one to decide? Now, interestingly, Rupert signed away his rights to determine that. Yeah, the trust says differently. If he believed that, why did he say his four children will decide equally? That was deliberate and heavily negotiated. And we should remind people that he made that agreement because he was leaving his second wife, Anna, to marry his third wife, Wendy, and was clearly in a hurry to get that done. And I've always wondered if it was just like, Yes, yes, yes. Okay, okay. You got it. Because after he makes that deal, he tells Jerry Fabrikamp, one of our great veteran media reporters at the time, well, yeah, that could be a problem one day.