Fox Corporation Stock Drops 4.9% as Murdoch's Eldest Son Takes Control

On Tuesday, the stock price of Fox Corporation experienced a 4.9% decline in pre-market trading. This drop came after the eldest son of Rupert Murdoch, the media mogul, gained control of the media empire following the resolution of a family trust dispute.

The 94-year-old media tycoon, who has built one of the largest media conglomerates in the world, has six children from three marriages. The family dispute was resolved through the establishment of a new family trust, which will benefit the eldest son and the two daughters of his third wife, while the eldest daughter, second daughter, and second son will no longer be beneficiaries of the original trust.

Following the completion of the transaction, the eldest son will take over the management of the family business, while Rupert Murdoch will continue to serve as the honorary chairman of the company. The media empire includes well-known brands such as Sky News in the UK, Fox News in the US, The Times, The Wall Street Journal, and HarperCollins Publishers.

As Rupert Murdoch aged, he delegated the day-to-day management of the company to his eldest son, who became the de facto leader. In 1999, when Murdoch planned to marry his third wife and divorce his second wife, the latter agreed to the divorce on the condition that she would receive half of Murdoch's assets. The three parties agreed to establish a family trust, stipulating that Murdoch's assets could only be inherited by his four existing children, each with equal voting rights. Murdoch sought to overturn this arrangement, which was controlled through the dual-class share structure of News Corporation, holding 41% of the voting power.

In 2013, when Murdoch divorced his third wife, she secured non-voting Class A shares in News Corporation for her two daughters. Six years later, News Corporation sold "21st Century Fox" to Disney for 71.3 billion dollars, with each of Murdoch's six children receiving approximately 2 billion dollars in dividends.

Starting in September 2023, Murdoch secretly began preparations to amend the trust's charter, revoking the voting rights of the second son, eldest daughter, and second daughter to ensure that leadership remained concentrated in the hands of his eldest son. Although this change did not directly affect the financial interests of the other three children, it faced their resistance. In July of the previous year, Murdoch hired a high-profile legal team to sue the three children in a Nevada court, attempting to achieve his goal through legal means, even dubbing the action the "Family Harmony Plan."

Industry analysts suggest that Murdoch, who built a powerful conservative media empire with influence in major English-speaking countries, hopes that his media assets will continue to follow this path after his death. His eldest son has fully embraced this ideology and shown a willingness to act in accordance with his wishes.

There are significant political and ideological differences among the Murdoch family members, often leading to conflicts due to differing opinions. The second son, who was dissatisfied with Fox News' close relationship with Trump, resigned from the Fox News board in 2020.

Despite their political differences, the Murdoch family is united in their desire to keep family matters private. Murdoch himself has requested around-the-clock security. The family's lawyers argued that trust cases have historically been considered private matters.

To maintain its competitive edge, the Nevada judiciary does not disclose most details of lawsuits involving asset protection. Seven news organizations, including CNN, NPR, and The New York Times, submitted a petition to the state authorities, arguing that the case's proceedings and outcome are of significant public interest and should be made public. The Murdoch family's lawyers responded that the case involves trade secrets, and public disclosure would benefit News Corporation's competitors.