The heirs to Rupert Murdoch’s media empire are still fighting over his succession. The battle was thrust back into the limelight on Friday with fresh allegations that sons James and Lachlan stole Rupert’s largest U.S. newspaper when he was head of the publishing company, which now prints the Wall Street Journal.
The new allegations were made in documents filed in the US on Thursday by an independent committee of 21st Century Fox. The company is trying to avoid regulatory approval for the $52bn (£39bn) takeover of Sky which it is pursuing in a complicated series of deals and takeover defences.
The battle between the Murdoch brothers has been a consistent subplot to the deal, and the latest development sees the family at loggerheads about who was in charge of the newspaper business when the deal was struck.
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James Murdoch, who is chief executive of Fox, was the company’s only board member when it agreed to take over the Journal’s publisher Dow Jones in 2007. He was put in charge of the newspaper to allow Rupert Murdoch the easier task of selling the company to News Corp when he bought the New York Post in 1981.
In a deal agreed with the U.S. Department of Justice over its merger with MySpace, Rupert Murdoch had agreed to sell the newspaper and other Murdoch holdings to rival Bancroft family for $5bn in cash and stock. But after the deal fell through in 2008, James Murdoch was given the keys to the Dow Jones computer systems.
The Murdochs and the Bancrofts formed a consultancy of sorts to smooth the deal after which they began to fight over who was in charge of the media empire. On 8 August 2014 James Murdoch, the second oldest of the four sons, was installed in charge of the newspaper business, which saw a radical makeover of the broadsheet.
Advertising revenues rose 70% while the newsroom size halved. While James held the position the Bancroft family shared power on the boards of the newspaper group with other directors.
James Murdoch resigned from the board in April 2017 but the dispute over who was running the company remains.
The new allegations include claims that Lachlan was in charge of the television business, while James had a responsibility for the newspaper business. In a fresh document filed with the Department of Justice, Fox said James Murdoch had repeatedly transferred the trading of the company’s stock, which could have helped to block the deal.
Lachlan was appointed deputy chief operating officer at the time, which critics said gave him an unfair advantage. At the very least the claim of “successful” management could add to the controversy caused by allegations of bribery and sexual harassment made by Fox staff.
Fox will appear before the DoJ on 27 February to argue against the ability of the Murdochs to keep control of the newspaper business, even after the merger of Sky and 21st Century Fox. The DoJ recently recommended that the deal should be blocked and shareholders are due to vote on the deal in June. If the Murdochs lose, it will send them back to the drawing board.
In the new filing Fox said: “The [independent committee] began reviewing the now-public July 2016 issue and, together with counsel for the Bancroft family and others, determined that there was significant additional information that was not previously disclosed that should be disclosed. The independent committee also concluded that there was a need to increase the transparency of the company and the process.”