Lachlan wins Murdoch succession war as siblings take major buyouts, legal battle settles. The big question: what comes next?
Welcome to Talking Business, a podcast produced in Melbourne Australia. The podcast is available on the Acast site, my own website, the Apple Podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at www.businessacumen.biz.
I am Leon Gettler. My job is to review and monitor the week’s news in business, finance and economics. I bring it all to you, every week.
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
This is episode number 31 in our series for 2025 and today’s date is Friday September 12
First, I’ll be talking to Francis Prince Thangasamy, the managing director for Asia-Pac of Lumen Technologies. We’ll talk about how Lumen helps companies digitise now, remain relevant, despite market conditions and the big challenge of addressing cyber security.
And I’ll be talking to independent economist Saul Eslake about what we can expect from the government’s tax and productivity round table.
But first, let’s Francis Prince Thangasamy.
So what’s happening in the news?
The blockbuster war in the Murdoch family over the future direction of News Corp and Fox Corporation has been settled. Siow what’s the deal? Rupert Murdoch has agreed to sell billions in shares and give them to three of his children in exchange for Lachlan Murdoch retaining control. The agreement ends a bitter Succession-style dispute that had pitted the Murdoch siblings against each other in an American court, and it means Rupert’s media outlets are likely to retain their right-wing bent after his death. In a statement released on Tuesday morning, News Corp announced a long running legal dispute over the Murdoch Family Trust had been resolved. Rupert and Lachlan had attempted to change the terms of the family trust that gave four of his children – Lachlan, Prudence MacLeod, Elisabeth and James – equal voting rights when he died. The fear was that when the Murdoch patriarch, now 94, died, Lachlan’s siblings would vote to kick him out of the trust, jeopardising his leadership of both media companies. Lachlan is executive chairman of Fox Corporation, which owns Fox News, and chairman of News Corp, which owns newspapers including The Wall Street Journal, The Times, The Australian, Sydney’s The Daily Telegraph and a majority stake in property platform REA Group. The family, which has built a media empire spanning several continents over 70 years, will create two new trusts to settle the dispute, the statement said. Lachlan and his two youngest siblings, Grace and Chloe Murdoch, will be members of one trust, while Prudence, Elisabeth and James will each have their own trust filled with the proceeds of roughly 14.2 million News Corp Class B shares and 16.9 million Fox Corporation Class B shares. Class B shares are those with voting rights. • These Class B shares give them real voting power, unlike Class A shares which are essentially passive investments. However, unless their trusts act in concert or challenge Lachlan’s leadership, he retains centralized control, especially if the Murdoch Family Trust remains aligned with him. Rupert only needed to convince one of his three unhappy children to agree to a deal, for the united front they held to collapse. That’s the mechanics of the current Murdoch trust. So a peace deal doesn’t necessarily mean playing happy families. It sees Elisabeth, James and Prudence being paid out $1.1 billion each. The deal secures Rupert Murdoch’s legacy as the founder of the world’s most powerful conservative media empire. The insistence in the News Corp announcement that after the deal closes that “none of the Departing Beneficiaries will have any interest, directly or indirectly, in News Corp or in Fox Corporation” gives a hint of the bitter feelings here. Not only are Prudence, Elisabeth and James out, they will have to stay out: “The Departing Beneficiaries will be subject to a long-term standstill agreement preventing them, and their affiliates, from acquiring shares of FOX and News Corporation and taking certain other actions with respect to the companies.” So the deal secures Lachlan’s leadership of the media companies which is what Murdoch wanted. But his siblings get voting rights. So, what happens when 94-year-old Rupert, still chairman emeritus of News and Fox Corp, dies? That’s no longer a question, or even a risk. It’s the Lachlan show. He’s the chairman of both companies, he’s got voting rights on the family’s remaining investment (about one-third of News Corp B class shares, which is the voting class), and he’s got the financial disclosure to make sure he’s aligned to investors. Once the dust settles, Lachlan’s camp will control about 33.55% of News Corp’s voting shares and 36.15% of Fox’s, plus tiny stakes in the non-voting shares. The Murdochs are selling precious voting stock because they had already sold almost all of the non-voting shares the trust once held, to finance earlier family peace deals. The selldown has reduced the family voting stake in Fox from 42.7% to 36.2%. And the News Corp stake is down from 40.2%to 33%. That’s the lowest stake the Murdochs have held in the empire in decades. If a raider wants to make a run at the group’s most valuable arm, REA, then 33% of News may not be enough to cement Lachlan’s control. The other jewel in Lachlan’s crown is Fox News, which is the powerhouse that produced much of the $US3 billion in profits that Fox Corp’s cable networks churned out in the last year. Servicing the new debt in the family trust will make Lachlan even more beholden to keeping Fox News subscribers on side, following their remorseless moves further to the right. With a $US2 billion debt to service, Lachlan doesn’t have the room for expensive mistakes that alienate Fox News subscribers. It’s great for News Corp’s Australian shareholders to have the drama sorted; however, the lingering question is whether it’s also great buying for News Corp chairman Lachlan at a time when traditional media and information businesses, such as News Corp, are pressured by technology, fragmentation of the media, a rise in automation and artificial intelligence. That’s now all Lachlan’s pressure, not his selling siblings. While Lachlan comes out of this the winner, the deal leaves the Murdochs’ hold on News Corporation and Fox Corp looking more vulnerable than it has been in decades. And then there is the Wendi Deng wildcard. There is no payout for Deng’s daughters, Grace and Chloe, in the family peace deal. They will be stuck in there still with no control. Together they are entitled to one third of the assets in the family trust, even if they can’t vote on decisions. In Murdoch world, trust beneficiaries only come of age when they turn 30. But as beneficiaries they could possibly derail this deal. Or rather, their guardians/trustees could. That would be Rupert Murdoch and Wendi Deng. It’s reported that Rupert reached out to his ex-wife to accept the deal, and Deng agreed. No doubt she had her reasons, or her price. But unlike the fallout elsewhere in the family, we’re unlikely to discover what that was. That’s so Wendi.
A Federal Court ruling that could result in a near $1 billion one-off hit to Woolworths and Coles is likely to result in fewer staff being put into salaried roles, undermining secure employment for workers. But it has implications for all retailers: Bunnings, JB Hi Fi, McDonalds, Hungry Jacks and KFC will need to examine whether they are paying staff correctly and could face a wave of new class action. The warning came after the country’s two big supermarkets told investors to expect bills into the hundreds of millions of dollars to remedy a growing underpayment issue, with Woolworths alone expecting the additional cost of remediation could reach beyond $500 million. The estimates follow a Federal Court ruling on Friday that Woolworths and Coles had not properly recorded overtime for up to 28,000 salaried managers dating back to 2013, and relied too much on rosters. The decision, Woolworths said on Monday, would require “significant and widespread changes to accepted retail practice” for thousands of businesses. Store managers working longer hours than rostered were allegedly underpaid their rates and penalties, as well as overtime. The court found Coles and Woolworths failed to keep complete records. Almost 9000 Coles staff at Coles and 19,000 at Woolworths were considered in the ruling. The retailers’ failure to keep complete records meant, under tougher laws effective from 2017, they bore the onus to disprove additional underpayment claims brought by the Fair Work Ombudsman and class action firm Adero. On Monday, Woolworths said its preliminary review of the decision meant it expected a one-off before-tax charge of between $250 million and $470 million. After tax, that would range between $180 million and $330 million, Including superannuation and payroll tax, Woolworths expects the after-tax liability to be as large as $530 million, which comes on top of the $486 million already repaid. In total, Woolworths could pay over $1 billion. “Woolworths Group’s estimate of further potential liability includes an assessment of the impact on all salaried store team members primarily relating to the court’s ruling on set-off provisions, minimum breaks and treatment of leave in relation to overtime,” the company said. “The estimate includes further remediation related to historical underpayments from 2013 to 2019 and the impact of the ruling on set-off from 2019 to 2025.” The impact on rival Coles was expected to big too, given it back-paid staff only a fraction of what Woolworths had. However, Coles has since told investors it estimates a bill of between $150 million and $250 million, including interest and costs such as superannuation, to resolve the underpayment issue. That is on top of the $31 million that it has already paid, taking its total to almost $300 million. But Adero class action principal Rory Markham questioned Coles’ provision, and estimated that the supermarket’s bill could eventually total $500 million. “In our experience, employers frequently underestimate the ultimate cost of remediation programs,” he said. “With Coles, for example, we’ve acted for hundreds of employees who report that payroll records bear little resemblance to the reality of the employment.” The fall-out from the 200-page judgement will be wide, according the Australian Retailers Association, the industry’s main lobby group, which said the costs and compliance burden on businesses of all sizes was likely to rise, and both undermine productivity and hurt career opportunities. The ARA chief executive Chris Rodwell said this judgement is likely to impact the future distinction between hourly paid and senior salaried employees, and create heavier burden for businesses.
Australia is trapped in a catastrophic public policy stalemate over a $5bn-a-year tobacco black market and underworld war, spawned by years of steep ¬cigarette tax increases that ¬gifted “the most rolled-gold ¬opportunity” for organised crime in the nation’s history. The escalating crisis has seen Treasury downgrade expectations for the tobacco tax take by nearly $7bn, despite the excise having increased to about $28 per packet – a 75% rise since 2019. That tax represents more than half of the cost of an average 20 pack of cigarettes, which is selling at between $35 and $50, compared to $13 to $18 on black market. “We’re running out of time to fight off this black market,” Rich Insight founder and leading economist Chris Richardson warned. “Every scrap of evidence from around the world is, the longer a black market is in place, the harder it is to stop it. We have offered the most rolled gold opportunity for organised crime that I can think of in Australian history. It’s a failure on health, it’s a failure on tax collections, it’s a failure on the fight against organised crime. And we know this, the numbers are screaming exactly this at us.” NSW Premier Chris Minns on Sunday said the federal tobacco excise was to blame for a surging black market in his state and urged “commonsense discussion” on the issue. “I just think this is plainly ridiculous – to suggest that if you jack up the price of legal cigarettes, you haven’t contributed to the explosion in the black market,” Mr Minns told Sky News. “Taxing rates have increased; they haven’t decreased. This would be the only tax in the world where it’s doubled, but the rate of revenue collection has halved over the same period of time. Something’s obviously happening here.
Prime Minister Anthony Albanese has called for corporate Australia to back Labor’s climate change agenda as the government prepares to unveil a crucial 2035 emissions reduction target and attempts to reset a fraught relationship with the country’s biggest businesses. In a speech to the Business Council of Australia’s annual dinner, Albanese warned that a political fight over decarbonising industry could damage the economy and laud efforts by business to reduce emissions. “Business has seen, firsthand, the damage done to Australia’s international relationships and to our economy by the ideological conflict of the climate wars,” Albanese said. “A decade in which energy policy became untethered from reality; where, even as 24 out of 28 of Australia’s coal-fired power stations were announcing their timeline for closure, there was no coherent plan to replace them. Business and industry don’t have that luxury of pretending change is not occurring. You have to deal with the real world.” The speech is the latest attempt to reset ties for the government, which has seen its relationship with business sour after the introduction of industrial relations changes that disadvantaged employers, including the reintroduction of industry-wide bargaining and a crackdown on labour hire. While opposed on industrial relations issues, the government hopes to find an ally in business as it finalises its climate policy, which will include the announcement of a 2035 emissions reduction target. Labor is thought to be considering a target range between 65 and 75% based on preliminary scenarios proposed by the Climate Change Authority. It has been besieged by climate activists and green groups pushing it to commit to the upper end of this range, while others have urged the government against what they describe as an impractical high target. When it came to power in 2022, Labor legislated a 2030 target of reducing emissions by 43% on 2005 levels. It also wants 82% of power to be generated from renewable sources by the end of the decade, although modelling suggests it will not meet that until 2037. The government wants to ultimately reach net zero emissions by 2050. The business community is pushing for clarity on long-term policy settings so it can invest with confidence, but it’s all over the place like a madwoman’s breakfast over where the target should be set. A group of businesses led by software giant Atlassian and iron ore heavyweight Fortescue in August published its own modelling arguing for the substantial economic benefits of a 2035 target of at least 75%. The BCA last week also released its own modelling that stopped short of recommending a number to the government, as it manages a membership base including banks and miners that have mixed views on how ambitious the government should be with emissions reduction. The BCA instead provided a “ground up” analysis of the potential costs and policies required to get to 50, 60 and 70% reductions over the next decade. The report argued that the bulk of emission reductions would need to come from the industrial, electricity and resources sectors. A target higher than 70% would risk harming competitiveness, it said. A 2035 climate target north of 60% will require more than $400 billion in new capital investment from government and industry.
Despite being on the brink of bankruptcy as a result of court proceedings, embattled former Liberal staffer Bruce Lehrmann has lodged legal action against the head of a corruption watchdog and a federal minister. The legal action was filed by Lehrmann personally at 9.30pm under the classification of a “judicial review”, which asks the court to review the legality of a governmental decision. Lehrmann has filed proceedings against the Commissioner of the National Anti-Corruption Commissioner Paul Brereton and federal Special Minister of State Don Farrell. The nature of the proceedings is unknown as of Monday afternoon. Lehrmann entered into the national consciousness after he was accused of raping his colleague Brittany Higgins inside Parliament House in 2019. He has denied the claims, which remain untested in a criminal court after a 2022 trial in the ACT was abandoned because of juror misconduct. But the Federal Court found in 2024 the allegations he raped Higgins were proven on the balance of probabilities, which is a lower civil standard of proof than its criminal counterpart. Lehrmann’s appeal against his defamation loss to Network Ten and journalist Lisa Wilkinson was heard by a panel of judges in August. The justices reserved their decision to be delivered at a later date. He claimed he was defamed by Wilkinson’s 2021 interview with Higgins on The Project in which Higgins alleged she was raped. Justice Michael Lee found the allegations were likely true in his headline-grabbing judgment in April 2024. “Having escaped the lions’ den, Lehrmann made the mistake of going back for his hat,” the judge quipped at the time.
And that’s it for this week.
And next week, I’ll be talking Jennifer McCloy, an established business strategist with a background in crisis communications and venture capital. Jennifer, the founder of Baseline, will talk about the company’s work tackling concussion and injury management.
And I’ll be talking to independent economist Craig James about what to expect in the week’s market. .
For the most exclusive access to leading economists and business leaders from around the world, subscribe to Talking Business from my website leongettler.com or whatever your favourite podcast platform is.
If you like Talking Business, please leave us a review with Apple podcasts. Thank you in advance.
In the meantime you can find me on Facebook, Twitter or X as it’s now known, Instagram, LinkedIn and YouTube.
If you want to contact me, email me at leon@leongettler.com. I answer all emails.
Also in my spare time, I have a copywriting business. If anyone needs newsletters, blogs, articles or advertorial, email me.
Looking forward to the next episode of Talking Business next week.
