Rupert Murdoch steps down as chair of Fox and News Corp

Rupert Murdoch has stepped down as the chair of Fox Corp and News Corp, ending a more than seven-decade career during which he created a media empire spanning from Australia to the US.

His son, Lachlan Murdoch, will become the sole chair of News Corp and continue as the chair and CEO of Fox, the companies said on Thursday. The transition solidifies Lachlan’s role as the leader of the media empire, putting to rest questions of succession within the Murdoch family.

In a memo to staff Thursday, Murdoch wrote: “Our companies are in robust health, as am I.”

The executive transition coincides with the annual meeting of shareholders for Fox and News Corp in mid-November.

It also comes just months after Murdoch, 92, scrapped a plan that would have reunited his media empire by merging Fox and News Corp, after several top shareholders rejected the proposal on the grounds that it would fail to realise the full value of the company.

Murdoch, who has near-controlling stakes in both companies, will be appointed chairman emeritus of both the companies.

Lachlan takes over the Murdoch empire as the media industry is battered by challenges ranging from the decline in traditional television viewership, to news organisations battling tech companies over alleged copyright theft in the age of artificial intelligence.

Fox News continues to be the number one US cable news network, playing an influential role in US politics.

Earlier this year, Fox settled a defamation lawsuit with Dominion Voting Systems for $787.5m, averting a trial in which Murdoch, his son Lachlan and Fox executives and hosts were expected to testify.

The trial would have put Fox in the crosshairs over its amplification of false vote-rigging claims in the 2020 US presidential election. Legal experts said the settlement was the largest ever struck by an American media company.

Fox still faces a lawsuit from voting technology firm Smartmatic, which in 2021 sued Fox for $2.7bn over similar claims, as well as shareholder lawsuits accusing Fox Corp officers and directors of breaching their duties by allowing the company to become mired in defamation claims.

“Many of his enterprises still produce a lot of important news which helps keep the world informed in ways that might not have occurred were it not for his leadership,” said Brian Wieser, media analyst at advisory firm Madison & Wall.

“But it’s impossible to ignore the other side of that, where Fox News amplified toxicity in the US political environment, and other properties similarly impacted other territories.”

Succession

Murdoch, who has six children, has long desired his children to eventually take the reins of the empire. His son James had been CEO of Twenty-First Century Fox before the company’s decision to sell its film and television assets to Walt Disney for $71.3bn, a deal that closed in 2019.

James then channelled proceeds from the deal into a private investment firm, Lupa Systems. Lachlan was appointed CEO of the new Fox Corp.

Upon Murdoch’s death, his other children could challenge Lachlan’s power. Murdoch controls News Corp and Fox through a Reno, Nevada-based family trust that holds a roughly a 40% stake in voting shares of each company. He also holds a small number of shares of the companies outside the trust.

Each of Murdoch’s four adult children has a stake in the trust. However, his youngest daughters Chloe and Grace, from his third wife Wendi Deng, do not have voting rights in the trust. The transfer of News Corp and Fox voting shares from Murdoch to his four adult children could create a scenario in which three of the children could outvote a fourth, potentially setting up a battle over the future of the companies, even as Lachlan Murdoch now oversees Fox and News Corp.

Fox and News Corp have a dual-share system, with nonvoting class A shares and voting class B shares. The shares in Fox and News Corp owned by Murdoch’s children through the trust are a combination of both classes of shares.

Concerns about Murdoch’s health have dogged him in recent years. In 2018, he suffered a serious back injury after he fell on his son Lachlan’s yacht, according to several employees.

Over the past year, Murdoch has started appearing back at Fox and News Corp’s offices in London and New York, employees say. Shares of Fox rose 2% after the news of Murdoch stepping down. News Corp shares gained 0.6%.

“It’s the end of the founder-mogul era,” said former News Corp executive Jonathan Miller, who worked alongside the elder Murdoch.

A generation of media titans, including Sumner Redstone, Ted Turner and John Malone, shaped the modern industry, Miller said. Now, the mantle has been passed from founders to executives who have risen through the ranks.

Reuters