Is media mogul Rupert Murdoch set for a summer holiday in Australia?
By Anne Hyland
It’s been some years since media baron Rupert Murdoch has visited Australia but that may change over the summer. The talk in well-placed circles is that Murdoch, with wife number five Elena Zhukova in tow, is planning a visit, after failing to make a much-anticipated trip earlier this year for the 60th anniversary of The Australian newspaper.
News Corp’s New York media team did not respond to a request to confirm if the 93-year-old chairman emeritus of News and Fox Corporation would be visiting.
Murdoch, who has sold about $US48 million ($74 million) in Fox shares this month, has endured a year of highs and lows, personally and professionally. A holiday with family in Australia may provide some respite before he fortifies himself for next year, which is promising to be equally troublesome.
Rupert Murdoch outside a US court room earlier this year as he sought to change the terms of the family trust. Credit: NYT
The difficulties of the past year have included this month’s News Corp annual meeting where shareholders, led by activist investor Starboard Value, put forward a non-binding resolution to end the dual-class share structure. The structure allows Murdoch and his four eldest children, through a trust, to have a voting interest of 41 per cent in News Corp and Fox, even though they hold an economic interest of just 14 per cent.
The Starboard proposal to collapse the dual-class share structure was an advisory resolution which meant the News Corp board could ignore it, but only up to a point.
The voting results on that proposal were 35.2 per cent in favour of ending it, while 64.8 per cent were opposed.
What’s unclear is whether the Murdochs voted on that resolution, despite a request from this masthead for clarification.
If they did, and the Murdoch family vote was stripped out, then the numbers would look very different on that resolution. A back of the envelope calculation suggests it would have been 64 per cent in favour of ending the dual-class structure.
If those recast voting numbers on the resolution are correct, where a Murdoch family vote was excluded, then it should give “the independent directors plenty of pause for thought”, says Matt Williams, head of Australia equities at Airlie Funds Management. Airlie has been a long-term shareholder in News Corp’s voting shares. It holds a stake of about 2 per cent.
Airlie voted in favour of the Starboard resolution because it, and the investors whose money it manages, believe that one share should equal one vote. “We will always support that, whilst acknowledging what a good job Lachlan [Murdoch] and the management team have done,” Williams says.
After Rupert Murdoch’s retirement last year, following seven decades of building a global media business, his eldest son Lachlan succeeded him as chair of News Corp, and executive chair and CEO of Fox.
“Everything’s coming up Lachlan when you look at it,” says Williams. “Both of his companies have performed superbly over the past year and that must be particularly pleasing for him since Rupert’s taken more of a backseat role.”
“Everything’s coming up Lachlan when you look at it,” says Matt Williams, head of Australia equities at Airlie Funds Management.Credit: Louie Douvis
Fox grew its annual net profit by almost a quarter in the year to June 30. Its shares have soared 60 per cent over the past year. News Corp’s net earnings in that period rose almost 90 per cent. Meanwhile, its shares have gained one-third over the past year.
Still, Lachlan’s position remains vulnerable because of a battle over the future of the Murdoch empire with his siblings.
It was The New York Times that revealed that Rupert Murdoch in late 2023 had moved to change the terms of the Murdochs’ irrevocable family trust so that Lachlan, his chosen successor, would remain in charge of his global television and publishing empire.
When Rupert Murdoch dies, the trust hands control of those businesses equally to the four eldest children, Prudence, Elisabeth, Lachlan and James, who may not agree on how to run them. Potentially, three of the heirs could out-vote a fourth, setting up a battle over the future of the companies.
Not surprisingly, Murdoch senior’s bid to have the terms of the trust changed in court has caused fissures in the family. Prudence, Elisabeth and James say such changes violate the trust’s original conditions and they would be wrongfully disenfranchised. Murdoch senior had dubbed his planned trust changes Project Harmony.
The trust court battle has also given ammunition to activists such as Starboard. The latter says the complicated family dynamics and the legal spat have put the stability and strategic direction of News Corp at risk. Murdoch has six children, but only four have a voting interest in the trust.
More legal battles loom for Murdoch’s companies next year. Smartmatic, a voting machine company, is suing Fox News for defamation alleging damages of $US2.7 billion, which relates to Fox News’ reporting on 2020 voting fraud claims in the US election.
Rupert Murdoch is moving ensure that his eldest son and chosen successor, Lachlan, remains in charge of his vast collection of television networks and newspapers.Credit: The New York Times
Fox has already paid out $US787.5 million to voting machine company Dominion Voting Systems last year over false claims of rigged voting.
Smartmatic, which earlier this year won a lawsuit against media group Newsmax, has said it also wants to probe the Murdoch family trust fight. It claims it might provide insight on Fox Corp’s involvement in editorial matters.
Separately, a lawsuit has been brought by six US pension funds seeking to hold current and former company officials liable for costs related to Fox News’ reports regarding alleged vote rigging in 2020. Fox Corporation has moved to have the case dismissed.
Meanwhile, in Britain, Prince Harry is suing The Sun and the now defunct News of the World in London’s high court, alleging that private information about him was obtained unlawfully between 1996 and 2011. News has already settled other similar cases in Britain.
All those cases ensure that Rupert Murdoch, his family and his companies will remain in the headlines next year, which is why he might just need that holiday.
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