A battle over control of Fox News parent company, Fox Corp. (FOX), and News Corp (NWS) continues to smolder after a Nevada judge blocked media mogul and 93-year-old Rupert Murdoch’s attempt to consolidate power in the hands of his son Lachlan—a move that could dramatically affect the future of both companies and investors.
Key Takeaways
- Rupert Murdoch’s failed attempt to change his family trust could lead to future leadership battles that may impact Fox Corp. and News Corp’s business strategies and stock values
- Different political views among Murdoch’s children could lead to major strategic shifts in how Fox News and other media properties operate.
- It would also have follow-on political effects, which could shift wider public discussions around the causes, Fox News is known for, including many that directly impact finance and investing.
The $18 Billion Media Empire at Stake
A single trust controls about 40% of voting power in both Fox Corp. and News Corp, representing billions in market value. Fox Corp. operates Fox News, the most-watched cable news network in America, while News Corp owns influential publications like The Wall Street Journal and The Times of London.
This concentration of voting power means any changes to trust control could significantly impact shareholder value.
It’s almost too on-the-nose that Rupert Murdoch’s family drama eerily mirrors the hit HBO series “Succession”—but not in the direction you might expect. A pivotal, purported piece of evidence in the trust battle was a memo written after a family representative watched an episode where the death of the patriarch—clearly modeled on the senior Murdoch—plunges his empire into chaos. The court ruled the memo was meant to avoid the chaos depicted on screen, not as part of a “Succession”-type conspiracy, as Rupert Murdoch’s lawyers claimed.
Why Changing Trust Control Could Reshape Both Companies’ Futures
The proposed trust amendment would give Lachlan Murdoch, currently CEO of Fox Corp., greater control over both companies’ strategic direction. This matters to investors because Lachlan’s leadership style and editorial philosophy closely mirror his father’s successful conservative-focused business model at Fox News.
Fox News generated $18.4 billion in revenue in 2023. His siblings, particularly James and Elisabeth Murdoch, have called for moderating editorial positions and different business strategies. Rupert has argued changing the trust would benefit all of his heirs because maintaining Fox’s current position as a conservative news outlet would preserve its financial value.
Why Rupert’s Changes to the Trust Were Rejected
In a 96-page opinion, Nevada Probate Commissioner Edmund J. Gorman Jr. described the plan to alter the trust as a “carefully crafted charade” to “permanently cement Lachlan Murdoch’s executive roles regardless of the impacts such control would have over the companies or the beneficiaries.”
In short, the judge determined that the move was intended primarily to give Lachlan control over the media companies, regardless of whether it would benefit Murdoch’s other children.
The battle for control of the Murdoch empire also serves as a stark reminder of the inherent risks associated with investing in family-controlled companies. While such companies can offer some advantages, the potential for internal disputes to spill over and affect shareholder valueis undeniable and often massive.
Affects for Investors of the Failed Trust Amendment
Neither Fox Corp. nor News Corp. had any volatility in its share price on the news, which came out on Dec. 10. Fox shares gained slightly on the day, though News Corp. shares dropped about 5%, per data from TradingView.
But that’s not why so many investors are watching this case. The ongoing saga surrounding Murdoch’s contested succession plan has the potential to send ripples throughout the broader investment landscape. One of the most significant broader impacts lies in how investors perceive and assess the media landscape.
Fox News, a cornerstone of Murdoch’s empire, has long been a dominant force shaping public opinion and the political climate. Any potential shift in its editorial direction resulting from the ongoing power struggle, could trigger a reassessment of investment trends within the media industry.
A more moderate Fox News, or one weakened by internal strife, could create prospects for competing news organizations, potentially diverting investment flows toward companies positioned to capitalize on a changing media consumption environment.
There’s also the force Fox puts behind efforts at deregulation and lower taxes, as well as bolstering right-wing causes and Republicans like Donald Trump. A weakened Fox News would have significant political effects, which could then have impacts felt throughout the markets.
The Bottom Line
Rupert Murdoch’s media empire is massive, and with such high stakes and his advanced age, many people have followed this case to see how it might affect control of that empire after he dies. Though his efforts to adjust his trust have been stymied for now, reports that Murdoch will appeal the decision could mean another chapter for investors in the not-too-distant future.
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