Murdoch Family Trust Resolution Raises Questions on News Corp’s Governance Risks
News Corporation has settled longstanding legal disputes involving the Murdoch Family Trust, restructuring beneficiary holdings and consolidating voting control under Lachlan Murdoch.
- Mutual resolution ends Nevada legal proceedings related to Murdoch Family Trust
- New trusts established for Lachlan, Grace, and Chloe Murdoch as remaining beneficiaries
- Departing beneficiaries receive cash funded partly by public share sales
- LGC Holdco, owned by remaining trusts, holds over 33% of News Corp Class B shares
- Lachlan Murdoch retains sole voting control; Rupert Murdoch remains Chairman Emeritus
Background and Legal Resolution
News Corporation has announced a significant development in the resolution of legal proceedings concerning the Murdoch Family Trust (MFT) in Nevada. The trustee and beneficiaries have reached a mutual agreement that terminates all litigation, bringing clarity to the ownership and control structure of both News Corp and Fox Corporation shares previously held by the trust.
Restructuring of Beneficiary Trusts
The resolution involves the establishment of new trusts benefiting Lachlan Murdoch and his siblings Grace and Chloe, collectively referred to as the Remaining Beneficiary Trusts. Meanwhile, Prudence MacLeod, Elisabeth Murdoch, and James Murdoch, the Departing Beneficiaries, will cease to hold any interests in News Corp or Fox Corporation. These departing beneficiaries will receive cash compensation, partly funded by the public sale of approximately 14.2 million News Corp Class B shares and 16.9 million Fox Corporation Class B shares previously held by the MFT.
Ownership and Voting Control Consolidation
Following these transactions, LGC Holdco, LLC, a company owned by the Remaining Beneficiary Trusts, will hold roughly 33.1% of News Corp’s Class B common stock and 36.2% of Fox Corporation’s Class B common stock. Notably, voting control over these shares will rest solely with Lachlan Murdoch through his appointed managing director role. Rupert Murdoch will continue his involvement as Chairman Emeritus, providing continuity in leadership.
Market and Governance Implications
The News Corp board has expressed strong support for Lachlan Murdoch’s leadership, underscoring his role in guiding the company’s strategic direction. The Departing Beneficiaries are also subject to a long-term standstill agreement, preventing them from acquiring shares or influencing corporate actions in both News Corp and Fox Corporation. This arrangement aims to ensure stability and reduce potential governance conflicts going forward.
Looking Ahead
Over the next six months, the Departing Beneficiaries will divest any remaining personal holdings in both companies, fully severing their financial ties. The newly established trusts for the Remaining Beneficiaries have a term extending to 2050, signaling a long-term commitment to stewardship under Lachlan Murdoch’s control. Investors will be watching closely how this restructuring impacts share liquidity, voting dynamics, and corporate strategy in the years ahead.
Bottom Line?
This resolution marks a new chapter for News Corp’s governance, with Lachlan Murdoch firmly at the helm and a clearer ownership landscape emerging.
Questions in the middle?
- How will the public sale of shares by departing beneficiaries affect News Corp and Fox Corporation stock prices?
- What strategic shifts might Lachlan Murdoch pursue with consolidated voting control?
- Could the long-term standstill agreement influence future shareholder activism or corporate governance?
