Q+A: What a $5b deal means for the Murdoch empire

Lachlan Murdoch is set to control the family’s global media assets, including Fox News, The Wall Street Journal and The Australian, under a new deal that ends years of infighting and speculation about what happens when Rupert Murdoch passes away. The agreement effectively sidelines Lachlan’s siblings James, Elisabeth and Prudence, who will each walk away with about $1.7 billion.

Sean Aylmer speaks to Tim Burrowes, publisher of media and marketing website Mumbrella and the newsletter UnMade, and co-host of Medialand on ABC radio.

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Episode Transcript

Speaker 1 (00:06):
Welcome to Fearing, Greed, Q and A, where we ask
and answer questions about business, investing, economics, politics and more.
I'm Sean Alma and today, what does a five billion
dollar deal mean for the future of the Murdoch Empire.
Lachlan Murdock is set to control the family's global media assets,
including Fox News, The Wall Street Journal, The Australian, plenty more,
under a new deal that ends years of infighting and

(00:27):
speculation about what happens when Rupert Murdock passes away. The
agreement effectively sidelines Lachland's siblings James, Elizabeth and Prudence, though
they'll all walk away with about one point seven billion
Ozzie and While the new structure gives Lachlan and his
two half siblings, Chloe and Grace about thirty three percent
of News Corps voting shares thirty six percent of Fox,

(00:48):
it also means he's taking on a mountain of debt.
Tim Burrows is the publisher of media and marketing website
Umbrella and the newsletter Unmade, and co host of Media
Land on ABC Radio. Welcome back to Fear and Greed.
What do you reckon of the deal?

Speaker 2 (01:04):
Sean and lovely to be with you. I have dreamed
of being the A in Q and A for so long,
so it's nice to finally have the opportunity. Yeah, look
at such a fascinating deal. I'm not sure any of
us necessarily saw it coming. You know, what had been
in the public domain was that there'd been this very
messy legal battle within the family, and that seemed to

(01:26):
set up a real question over the future of the Empires,
so the future of News Corp. And the future of
sister company, Fox Corp, which is what owns Fox News
in the US, amongst other things. And it really set
the question of whether Lachlan Murdoch, his father's choice, would
be able to retain leadership of the company, or whether

(01:49):
the other siblings would effectively gang together and outvote him
when Rupert Murdoch's shares votes were no longer valid once
he eventually passes away.

Speaker 1 (02:01):
Okay, I mean there's a lot in that. Firstly, you know,
it must be quite a confronting to have this battle
about when you die, but Rupert Murdock seems to be
quite able to manage that one is that? I mean,
can just take back to the Nevada court case, really,
which has really kicked this off. Is it effectively about
the fact that Rupert thinks for Fox to succeed and

(02:22):
News Corp to succeed, it needs to have a right
wing leaning and the only sibling or only child of
his that can do that is Lachlan. That's effectively his argument,
isn't it.

Speaker 2 (02:32):
Yeah, that was exactly what his legal argument was, that
it would be in the financial interest of all of
the family for Lachland to leave the company because only
he would have the in Rupert's view, correct ideology to
leave the company in the direction it would need to
be to be profitable, Whereas the thinking was if it

(02:54):
was the direction of James Murdoch or one of the
two other siblings voting with him, then potentially would take
it to the century or you know, even further somewhere
towards the left, and that might just not be as
commercially successful. So that that was his unsuccessful argument in
the Nevada court, And of course the family had to

(03:16):
then go away and hash things out, and as these
things so often are, it was settled with an enormous
pile of money.

Speaker 1 (03:24):
So what does it mean for the essets? What does
it mean for the local newspapers, for example, does it
mean anything for Aria? What does it mean for Fox.

Speaker 2 (03:32):
In the short term? A little bit more certainty, so
there isn't this question mark of what will happen to
the organization afterwards. You know. Another possibility was even that
it could be could be broken up. I think it
probably opens the door again for conversations about merging or
rather remerging News Corp and Fox Corp, which which standards

(03:55):
two separate organizations with fairly common ownership and Lochlan Murdock
at the top of both. So we could potentially see
that happen now in terms of impact on Australia because
Fox Corp aren't really much of a presence here.

Speaker 1 (04:08):
You know.

Speaker 2 (04:08):
They licensed Chubi to News Corp that does the ad sales,
which is the free ad supported TV streaming service, but
that's really the only Fox Corp property we see here.
But yeah, you know, we may well see those two
coming together. I'm intrigued what this might say about Nover

(04:28):
Entertainment in the future. So no Over Entertainment owned by
Lochlan Murdock in his own rights, and it's felt to
me like at some point it will be logical for
it to be folded in within the wider news corp empire.
But of course it made no sense at all for
Lachlan to do that while this dispute was going on,
because effectively could lose control of something he currently controls.

(04:52):
So now that's resolved, it potentially opens the door for
that and then then potentially, you know, that becomes an
interesting kind of chip on the negotiating board.

Speaker 1 (05:02):
Okay, I mean the prudence Elizabeth James walk away with
one point one billion US according to New York Times
had their numbers. Lachlan walks away owning all the running
the group, but also with a huge amount of debt.
Now he is backing traditional media so he can repay

(05:22):
that debt. That's a pretty big gamble. It's a Murdox
size to gamble. There, I say.

Speaker 2 (05:27):
I was about to say, like father, like son. That
was That was the story of the news corp empire
over many decades, was betting big by raising debt to
do the things that Rupert Murder wanted to do. And
we it does look rather like Lachlan has picked something
from the same playbook. Now, of course, there is always

(05:47):
a moment when the music stops and there are plenty
of people who you know have have done media takeovers
and loaded in too much debt, including famously Warwick Fairfax
at one point the Man who Couldn't Wait, who ended
up with so much debt that effectively the company was
brought down. So no guarantee of being able to get through.

(06:11):
But equally, you know this is a family which is well.
Rupert Murdoch has led the business for more than seventy years,
often with heavy debt levels, So yes, business as usual.

Speaker 1 (06:26):
Do you think Rupert will just sort of fade away
and just going to retirement? Tim Burrows, Well, technically, obviously
he is in retirement. Although we certainly began to hear
the evidence that when when Donald Trump was threatening to
sue it was over there the Wall Street Times, Wall
Street Journal's coverage of his Epstein connections, it was still

(06:51):
Rupert Murdock that he called.

Speaker 2 (06:54):
I noticed that this current deal runs through until twenty fifty,
so I mean maybe Boopert Murdock will still be alive
at one hundred and twenty. I wouldn't actually bet against it,
So we shall see.

Speaker 1 (07:06):
Tim. Thank you for talking to fear and greed, Q
and A.

Speaker 2 (07:09):
Always a pleasure, are never mature.

Speaker 1 (07:11):
Tim Burrows is the publisher of media and marketing website
Umbrella and the newsletter Unmade, co host of media Land
on ABC Radio, and a great man as well. If
you've got a question you'd like us to explore, send
it through on LinkedIn, Instagram, Facebook, or at biringreed dot com.
I'm Sean Almer and this is Beer and Greed Q
and a