Rupert Murdoch has stepped down as the chairman of Fox Corp (FOXA.O) and News Corp (NWSA.O), ending a more than seven-decade career during which he created a media empire spanning from Australia to the United States.
His son, Lachlan Murdoch, will become the sole chairman 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 realize 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 organizations battling tech companies over alleged copyright theft in the age of artificial intelligence.
Fox News continues to be the number one U.S. cable news network, playing an influential role in U.S. politics.
Earlier this year, Fox settled a defamation lawsuit with Dominion Voting Systems for $787.5 million, 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 U.S. 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 $2.7 billion 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.
[1/3]Tennis - US Open - Mens Final - New York, U.S. - September 10, 2017 - Rupert Murdoch, Chairman of Fox News Channel stands before Rafael Nadal of Spain plays against Kevin Anderson of South Africa. REUTERS/Mike Segar Acquire Licensing Rights
"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 Co (DIS.N) for $71.3 billion, a deal that closed in 2019.
James then channeled 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 Corp through a Reno, Nevada-based family trust that holds a roughly 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 Corp voting shares from Murdoch to his four adult children could create a scenario in which three of the children could out-vote a fourth, potentially setting up a battle over the future of the companies, even as Lachlan Murdoch now oversees Fox Corp. and News Corp.
Fox and News Corp have a dual-share system, with non-voting 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.
Lachlan was born to Rupert's second wife, Anna Torv. His older half-sister, Prudence, was born in 1958 to Rupert and his first wife, Patricia Booker.
Source: Bloomberg, Financial Times
He would also stay up late listening to Rupert talk business strategy at the dinner table "with famous guests," according to the profile.
Source: The New York Times Magazine
Lachlan was reportedly a member of the "Conservative Society" at Trinity, a club formed to address "a definite imbalance of political ideology in the school community," according to the school's yearbook.
Source: The Intercept
Lachlan's senior thesis focused on German idealism, and was titled, "A Study of Freedom and Morality in Kant's Practical Philosophy."
Source: The Intercept
Lachlan told The New York Times Magazine, "I wanted to put my arms around him and hold him up," about seeing his father stressed during the merger because of the debt hanging over News Corp.
His father successfully navigated the deal, and Lachlan reportedly never talked about the moment with Rupert again.
Source: The New York Times Magazine
Source: The Intercept
News Corp said that Lachlan was "directly responsible" for two-thirds of the company's global revenue, specifically from TV stations in the US.
Source: News Corp
Source: FT, Bloomberg, NPR, and Ronald Reagan Presidential Foundation
Source: Reuters
Source: Insider
Source: Insider and Vanity Fair
Source: Insider and The Intercept
The Disney deal also reportedly exacerbated tensions between James and Lachlan — the latter believed the deal was eroding what could end up being his future media empire. "Lachlan's whole self-image was that he was going to be the next Rupert," a person close to Lachlan told Vanity Fair.
Source: Vanity Fair
Aside from his mansion, Lachlan is known for leading a luxurious lifestyle, owning multiple estates, custom built sports cars, and multimillion dollar yachts.
Source: Insider, Vanity Fair and Bloomberg
Source: Mansion Global
In 2020, he acquired the streaming service Tubi, doubling its monthly users in a year. Murdoch has also extended the Fox News brand into weather, lifestyle, and book imprints.
Murdoch has also said that he's eager to build a "blank sheet" as CEO whilst keeping his father, Rupert, as a sounding board.
Source: Insider
Carlson was axed from Fox News less than a week after the outlet settled a defamation lawsuit with Dominion Voting systems for $787.5 million over false claims made about election fraud during the 2020 election.
Prior to the settlement though, texts revealed through the discovery process showed Carlson disapproved of the company's news division and management, was skeptical of the network's coverage of the election, and had strong critiques of Donald Trump.
Shortly after Biden was declared the winner of the 2020 election, Carlson texted other employees saying, "Do the executives understand how much trust and credibility we've lost with our audience? We're playing with fire, for real."
Source: Insider, Reuters, and Wall Street Journal
Lachlan's base salary for fiscal year 2022 was $3 million, according to Fox Corporation's public filings. Overall, his total compensation for fiscal year 2022 was $21,748,681. In 2021, his total compensation was higher, at $27,675,399.
Rupert Murdoch and his family have a combined net worth of $17.3 billion, according to Forbes.
A representative for Lachlan Murdoch did not immediately respond to Insider's request for comment ahead of publication.