Memo to Rupert Murdoch: now is the time to sell Fox News

The hubristic afterglow at Fox News following Donald Trump’s election victory was rudely punctured by the Nevada Probate Commissioner Edmund Gorman. The commissioner ruled against the action brought by Rupert and Lachlan Murdoch, and in favour of Lachlan’s siblings – Prudence, Elisabeth and James.

Without a hint of irony, Rupert had called his move Project Family Harmony. The project was an attempt to change the conditions of an “irrevocable” trust agreed to in 1999 when Rupert was divorcing his second wife, Anna.

That trust gave equal control to Rupert’s four children – Prudence, Elisabeth, Lachlan and James – after his death. Now Rupert and Lachlan have moved to instead cement Lachlan in control.

Read more: Rupert Murdoch loses his legal battle, leaving future of media empire in the balance

Because the trust could only be changed if it benefited all members, and because the other three siblings opposed the move, Rupert and Lachlan had to argue that these three would enjoy the commercial benefits of having Lachlan clearly in charge even if they didn’t think so.

Such a move was always likely to fail, and it says much about Rupert and Lachlan’s judgement that they initiated it. Instead of family harmony, the legal action has solidified the lines of conflict among the siblings. But apart from family relations, the ruling also has implications for Fox News and its employees.

Two facts are most pertinent:

1. Fox News is now at, or close to, what is likely to be its peak value. It is almost certain to be worth less in five years’ time.

2. The divided family is unlikely to be able to give coherent leadership to Fox News after Rupert’s death.

The present and immediate future for Fox News is very bright. Its more liberal competitors in cable news services – MSNBC and CNN – have seen their audiences drop precipitately since the election. MSNBC is down 46% compared with the first ten months of the year and CNN down 33%. In contrast, Fox News has surged, capturing 70% of the cable news market in November, the largest share in its history.

Fox News has been an enthusiastic participant in Trump’s victory celebrations. Amid much glitter, in front of an audience of 2000, it gave Trump its Patriot of the Year award. Trump flew from Florida to New York to accept it. He praised the incredible people at Fox and said how nice the award was.

Then followed a typically ungracious speech. He began by saying there were a couple of people at Fox he didn’t like, and then repeated his campaign themes – the rigged 2020 election, how Democrats tried to rig the 2024 election, and that other countries are emptying their mental institutions and insane asylums to send immigrants to the US.

With Trump continuing to be Trump, Fox’s immediate future looks very bright. During his first term, Trump “watched the network religiously”, often calling in by phone himself and tweeting responses to its reports. Several of his public statements and policy decisions were apparently influenced by Fox.

Fox will enjoy far greater access to the White House than any other media organisation, and a pivotal place in the flow of news unparalleled in any other liberal democracy. In a few years’ time, if political momentum is in the other direction, this may be less of a blessing.

Political fortunes aside, the longer term future for Fox News looks much less bright. Fox News was a good and faithful campaigner for Trump, but it is notable that when people explain Trump’s victory, Fox is never mentioned.

Instead, social media, such as Elon Musk’s X, and podcasts, such as that of Joe Rogan, are highlighted. Rogan’s interviews with Trump, JD Vance and Elon Musk, for example, have been viewed in total more than 78 million times on YouTube alone.

An estimated 135 million Americans say they listen to a podcast monthly, more than twice the share who said the same in 2016.

In contrast, subscription TV is on the decline. Fox News, CNN and MSNBC are all available in around 66 million pay TV households in 2024, but this is a 28% decline from 2016.

Now, into this already difficult mix comes Commissioner Edmund Gorman. According to the New York Times, in a 96 page judgement he “resoundingly” ruled against Rupert and Lachlan’s attempt to cement Lachlan’s control.

Gorman said Rupert and Lachlan had acted in bad faith. Rupert and Lachlan’s lawyer has already said that they will appeal. The avenues of appeal could go on for a very long time, but this only adds to the uncertainty for potential investors.

What happens if Rupert dies while the appeals are still in process?

Interestingly, during the campaign, Trump said on Fox and Friends that he was going to see Rupert about Fox’s campaign coverage “because I can’t talk to anybody else”.

This rather overlooks that Rupert was now only chairman emeritus, and Lachlan was the chair. Perhaps this was just old men’s solidarity. But it’s also possible that many things can be inherited but they do not include influence and reputation, whatever the official titles say.

Another element that may not long outlast Rupert is the dual voting system in his companies, which gives the family more than 40% of the votes with around 14% of the shares. This system is disliked by most investors, and while many shareholders would have given Rupert latitude as the genius who built the empire, they are less likely to be happy with Lachlan having such a privilege.

While the cable industry is in a long-term decline, and while there are likely to be shareholder rebellions, the family is divided, seemingly irreconcilably. But the main focus of the family conflicts seems to be Fox News. The best way to take the heat out of the family conflicts would be to sell, or to float, Fox News, and this is likely to be more profitable now than in a few years’ time.