Murdoch media galaxy would be better with one sun

Rupert Murdoch wants to orient his galaxy around one son. A fight has erupted over how power over the media mogul’s empire, which includes Fox and News Corp will be split among four of Murdoch’s children after his death. For independent shareholders, the question of familial fairness is a sideshow. What matters more is stability and predictability, and for that, one head is better than many.

Murdoch, 93, is trying to change the terms of a family trust in a Nevada court, the New York Times reported on Wednesday, so that his son Lachlan becomes the unchallenged ruler of the family domain. The trust controls 43% of the vote of broadcast and sports company Fox, and 40% of newspaper-owning News Corp, which operates the Wall Street Journal, HarperCollins book publisher and real estate assets.

Upon Murdoch’s death, the trust passes equal voting rights from Murdoch to four of his children including James, who once served as CEO of Fox predecessor Twenty-First Century Fox. But Murdoch wants Lachlan to have “permanent exclusive control” over Fox where he serves as chair and chief executive, according to the New York Times, in part to maintain Fox News’ conservative views and prevent any ensuing battles over political matters.

It’s easy to see why Lachlan’s siblings may not love this idea. But investors in Fox have done well with him at the helm, at least compared to peers. The company’s five-year annualized return to shareholders is 1%, where Warner Bros Discovery and Paramount Global have produced negative returns. It also beats Comcast and Walt Disney. Shares in News Corp, where Lachlan serves as chair, have done even better with a 16% return.

Conflict and gridlock, meanwhile, are surefire value-incinerators. Consider Paramount, where owner Shari Redstone’s strategic dithering led to the exit of CEO Bob Bakish, four board directors and now a lawsuit from angry shareholders. Discord among the Bancroft media clan, former owners of the Wall Street Journal, enabled Murdoch to wrest control of that paper in 2007.

Conversely, investors often tolerate supreme leaders: look at Meta Platforms controlled by boss Mark Zuckerberg, whose shares have more than doubled over 5 years. Lachlan’s record isn’t flawless; he stumbled with his ham-handed attempt to merge News Corp and Fox in 2022. But better an unelected emperor than a squabbling committee. Reuters