A court case is brewing over Rupert Murdoch's plans for succession of his family business and the media empire he has built. As a politically influential figure in the US and wider world, the ramifications go far and wide.

We have already written about the tangle around media tycoon Robert Murdoch and his children. A case of life imitating “art” or vice versa? The recent TV series, Succession, full of fascinatingly ghastly people (and playing to many clichĂ©s that people have about the super-rich), feeds off such stories. (See this article about why such wrangles prove the value of family offices.)

To explore what is happening with the Murdoch story, here is Tamasin Perkins (pictured), partner at law firm Charles Russell Speechlys.

Tamasin Perkins

The editors are pleased to share these views; the usual editorial disclaimers apply. Email tom.burroughes@wealthbriefing.com if you wish to respond.
 

Rupert Murdoch has been revisiting his succession planning, to the chagrin of at least three of his children and in ways that could impact global politics in years to come. 

As a multibillionaire, patriarch of the Murdoch family and founder owner of News Corp and Fox Corporation, Rupert Murdoch’s legacy arrangements were never going to be straightforward. The parallels to the HBO series Succession are so striking that they can’t be coincidental and, if anything, Murdoch’s situation makes Logan Roy’s worries seem a walk in the park. Murdoch is now 93 years old; he has recently married his fifth wife and he has six children who vary in age from their 20s to their 50s and who vary from having no interest in the family business to being its CEO.

Succession planning has long been in Murdoch’s mind. He previously created an irrevocable family trust that gave each of his six children an equal interest in the business and voting rights (one vote each) to his four eldest children. This would have meant consensus would have to be reached between the children for all key decisions about the family business – he created a democracy, but also a serious risk of impasse.

Now, reports suggest that Murdoch intends to alter the “irrevocable” trust arrangement so that Lachlan, Murdoch’s eldest son â€“ chairman and CEO of the Fox Corporation with a shared political outlook and vision with his father – has been marked out as the chosen successor. Lachlan will have increased voting rights and be able to secure a majority

Perhaps unsurprisingly with so much at stake, Murdoch’s decision has reportedly been challenged by three of his children in the Nevada Courts. Whatever the outcome of that trial, Murdoch must have faced difficult decisions in the way he chose to hand over power and the timing for doing so. Those decisions will secure his personal legacy and, given the influence of his media empire in the US and globally, will have wider political ramifications spanning beyond his lifetime. This process provides useful legal lessons for others who may be negotiating that path.

Tackling issues head-on
It is better to pull off the band-aid and be accountable for your decisions even if there is backlash. Murdoch could have left a will setting out his wishes and kept that will confidential to maintain family harmony and an easy life. That would only have postponed the battle until after his death, prolonging family upset and business uncertainty. It is usually kinder to everyone to make a difficult decision early and to be transparent about that decision. 

Having the right team in place
Murdoch not only updated his wishes but changed his personal representatives to reflect the increased risk of a dispute. Where an estate is likely to be contentious, it can be better to appoint executors who are going to be robust, who understand the complexities of your business and who are not personally invested.

Matching your business plan with your succession plan
Previously Murdoch’s succession arrangements did not reflect Lachlan’s primacy in the business. A succession plan should enable the people you have chosen to run your business now to continue to do so. When family and business matters collide, it is increasingly important to factor these into your approach to succession planning.

Keeping wider stakeholders in mind
Much of succession planning is about wanting the best for your family, but there is a wider picture for successful business owners. For Murdoch, this included considering the impact of Fox’s political leanings on the future of US government, but for any business founder there will be employees, service users and a wider community who want to be sure that there will be business continuity and that they will have stability personally.

Being flexible
Family dynamics and relationships are constantly changing, and businesses may grow and evolve. Build in flexibility to any estate planning and keep going back to your plan to make sure it continues to reflect your wishes.

Ultimately, this case is unique but it does highlight the universal challenges of balancing business continuity, family happiness, and individual aspirations in succession planning. Whilst there is no easy way of going about these delicate family matters, these strategies, on top of consulting legal advisors, can help family businesses and individuals managing valuable assets avoid similar conflicts and ensure a smooth transition of control and management.

For now, we can only wait and see. Unless a resolution is reached, the fight for the future of Fox could go to court in September, just two months before the US election, which could complicate things even further. The scriptwriters for Succession may be wondering whether to commission a fifth series.