Murdoch seals $3.3bn succession deal to hand empire to eldest son

Rupert Murdoch has resolved a bitter succession battle and ensured that his media empire will retain its conservative political slant under eldest son Lachlan after buying out three of his children for $3.3bn.

Each of those three Murdoch siblings — James, Elisabeth and Prudence — would receive $1.1bn apiece through a partial share sale by the family trust, according to people familiar with the matter. In exchange, they would give up their ownership interests in News Corp and Fox.

Murdoch’s children with Wendi Deng, Chloe and Grace, will join the trust with Lachlan Murdoch. 

The settlement means that when Rupert Murdoch dies, Lachlan will inherit control of his sprawling media conglomerate, which includes Fox News, The Wall Street Journal, the New York Post and The Sun in London.

The multibillion-dollar payout resolves a decades-long family feud that has mesmerised media and political circles and helped inspire storylines in HBO’s Succession.

The prevailing wisdom had been that James Murdoch, who has been estranged from the family in recent years, was interested in taking over his father’s news outlets and potentially shifting their conservative political stance. However, the decision ultimately came down to money over ideology, said a person familiar with the negotiations. 

The resolution follows an embarrassing legal battle as the 94-year-old Rupert tried to amend the trust that holds the family’s interests in the two companies.

Before the new settlement, voting rights in the trust would have been split between his four eldest children when he died. Murdoch tried to change it to favour Lachlan, in a plan he called “Project Harmony”.

A commissioner in Nevada, where the trust was incorporated, denied Murdoch’s bid last year, leaving his children resentful after having been blindsided by the proposal. 

Monday’s deal will secure the right-leaning political direction of Fox and News Corp’s stable of influential newspapers under Lachlan, who was anointed heir to the empire after being appointed chair of the media group in 2023.

For Rupert, the deal secures the future of a global news empire that has held sway over politicians in the US, the UK and Australia for the past 40 years — and aims to do so long after his death. Fox News has become the dominant media outlet for the American right. 

The deal will be financed through a partial sale of Murdoch’s stake via a block trade that will be handled by Morgan Stanley. Several institutional investors, sovereign wealth funds and large family offices had been lined up to acquire the stake, said three people briefed about the matter.

The move will resolve the unstable status quo that has existed since the family trust was set up almost three decades ago, following Rupert’s divorce from Anna Torv, the mother of Lachlan, Elisabeth and James. Each child — with Prudence — was given an equal voting right after the death of their father. Grace and Chloe previously had an economic interest but no voting control over the trust.

Lachlan’s new trust was advised by Skadden Arps, while the Murdoch siblings were represented by Centerview Partners and Cravath, Swaine & Moore. The old family trust was advised by Sullivan & Cromwell.