Court Documents Reveal Murdoch’s Fox Corp-News Corp Merger Still Possible
Murdoch Family Dynamics and the Potential Fox-News Corp Merger
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.
Revelations from Court Documents
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.
Murdoch’s Approach to the Merger
Murdoch drafted a letter 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."
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's "something that still could happen in the future."
Market Reaction and Corporate Response
Fox Corp and News Corp declined to comment. Shares in Fox dropped as much as 2.9% while News Corp rose 1.5% following the Reuters report.
The Strategic Importance of a 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.
Background: The 2013 Split and Its Aftermath
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.
Public 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.
The Murdoch Family Succession Battle
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 and Aftermath
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.
Insights from Court Testimony
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.
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 by Edmund Lee; Editing by Rod Nickel)