Rupert Murdoch's Fox Corp and News Corp Merger Could Still Occur, Court Docs Show
Potential Re-Merger and Family Succession Saga
Background of the Merger Discussions
Aug 27 (Reuters) - Rupert Murdoch's longstanding wish to reunite his Fox Corp and News Corp could happen in a potential merger that would unite a TV company with a widespread news operation, cementing the family's control over a smaller empire, court documents and video show.
Discussions of a possible re-merger were revealed during the last few weeks in unsealed court documents and an attorney's testimony related to a family succession saga that began in 2023. The judicial official overseeing the matter released the findings at the end of July.
They showed that in 2022, Rupert Murdoch, then chairman of Fox Corp and News Corp, became interested in recombining the two companies after he split them less than 10 years earlier.
Investor Reaction and Ongoing Possibility
The merger failed after investors balked, but court proceedings in June show Murdoch could make a renewed attempt. In a hearing to determine whether the court testimony should be made public, an attorney for Lachlan Murdoch argued any discussions related to the merger should be sealed or redacted because it is "something that still could happen in the future."
In a statement, Fox said, "The references in the court records concerned a potential merger considered in 2022. There have been no merger discussions between FOX and News Corp since then." News Corp referred to the Fox statement. Fox shares dropped 3.4% while News Corp rose 0.7% following the Reuters report.
Waning Media Empire
Murdoch's Aggressive Pursuit of the Merger
WANING MEDIA EMPIRE
In a sign of how aggressively Murdoch pursued the merger, he drafted a letter in 2022 to both boards stating the family trust would not "vote in favor of any alternative sale, merger or similar transaction involving either company." After a representative for Murdoch's daughter Elisabeth questioned the re-merger, Rupert texted her and threatened to "ram it through ... if necessary."
Potential Impact of the Merger
A merger would bring together what remains of Murdoch's waning media empire. It would unite an array of disparate businesses across television, newspapers and streaming, including Fox News, Fox broadcast, which airs NFL games, the Wall Street Journal, the Sun, and the New York Post.
Recent Business Moves
Fox, led by Lachlan Murdoch, struck a $22 billion deal in June to acquire the streaming platform Roku, giving Fox access to more than 100 million households in an attempt to reach more digital audiences as television declines.
History of the Split and Legal Proceedings
Background of the 2013 Split
Murdoch split his empire in two after a hacking scandal at his UK newspapers in 2013 threatened his enterprise. Murdoch and his son James Murdoch apologized to a UK parliamentary committee after it was revealed one of his tabloids had hacked the mobile phone of murdered schoolgirl Milly Dowler. Murdoch cleaved the faster-growing and more lucrative television business from his shrinking newspaper empire, and investors boosted the value of both.
Release of Court Findings
The court findings were released after several news organizations, including Reuters, petitioned the probate commissioner presiding over the case to release the proceedings.
Family Succession and Settlement
Dispute Over Family Trust
The fractious family dispute started in December 2023, when the then 93-year-old media titan moved to alter the family trust to give effective control of Fox and News Corp to his eldest son Lachlan, cutting out three of his children, Prudence MacLeod, Elisabeth, and James.
Settlement Details
The children took their father to court but settled last year after a two-year battle. Lachlan became the heir to his father's business while the three children were paid $1.1 billion each in a deal that dissolved their stakes in the family trust that controls Murdoch's companies.
Public and Family Reactions
Media Coverage and Fresh Comments
Details from the succession drama were first revealed by the New York Times Magazine last year, but the July findings from the Nevada court relayed fresh comments from the elder Murdoch.
Murdoch's Justification for Control
When a family representative questioned his motivation to further consolidate his control over the businesses, Rupert Murdoch responded: “Sorry, Richard! This has been a family-dominated business for 70 years,” and added, “It would be a disaster for at least the U.S. and Australia if these assets fell into the wrong hands.”
Reporting Credits
(Reporting by Edmund Lee; Editing by Rod Nickel)