How the Murdoch Family Feud Is Like "Succession" | Pivot

1. 0:00 – 0:36

   Murdoch trust fight: the basics and why it’s erupting now

   1. KSKara Swisher0:00

      This is an interesting story. Did you see this? Murdoch family and a court battle over who will leave-

   2. SGScott Galloway0:03

      Wild.

   3. KSKara Swisher0:03

      ... News Corp and Fox.

   4. SGScott Galloway0:04

      It's wild.

   5. KSKara Swisher0:05

      Or, according to-

   6. SGScott Galloway0:05

      What do you think of this?

   7. KSKara Swisher0:06

      Oh, I know a lot about it. Th- Let me just go through it for people. Currently, the family trust gives each of Rupert Murdoch's children, four children, equal votes. He has two others, but they have ownership, but not votes. Uh, he wants to change that. He made this when he divorced from his wife Anna, um, to, she, this, she insisted on this. Um, Rupert has filed a petition to amend the trust, it's, it's an irrevocable trust, but that's what he's done to give exclusive control to his oldest son, Lachlan. As reasoning, he cites political differences with his other children that could impact editorial stance of his companies. Uh, three other children

2. 0:36 – 1:07

   Why Kara thinks the move is bad governance (and bad for shareholders)

   1. KSKara Swisher0:36

      have responded with a legal challenge. The trial is expected to begin S- September. It's, it's in Nevada where this is, so it's one person who deals with trusts and estates. Um, you know, there's one tiny little out that he's saying he's doing it for the benefit of these people and he's doing it for political reasons. That's not the benefit of shareholders or anything else that L- Lachlan, who's presided over disaster after disaster at the company, including the lawsuits and behaviors and payoffs and everything else. I mean, Lachlan has been a terrible CEO in that regard.

3. 1:07 – 1:51

   “Succession” dynamics: siblings realigning against Lachlan

   1. KSKara Swisher1:07

      Um, I don't think this helps shareholders. Um, I've, uh, you know, what's interesting, I have a little knowledge of these k- these people. Um, they were not together, James, um, uh, Liz, and I think it's Prudence. They were not aligned at all. Liz moved back and forth like Shiv on Succession. You know, she was, she's very much wanting her dad and her to get along. Um, so this united them, which was, of course, another stupid thing Lachlan does 'cause he's as dumb as a box of hammers. Um, so it's really interesting. Um, uh, you know, this is a family that has huge impact on our society, and he's trying to live beyond the grave. This old, crusty old, uh, Dracula is trying to live beyond the grave. What do you think?

4. 1:51 – 2:51

   Scott on Fox/News Corp’s outsized influence relative to market value

   1. SGScott Galloway1:51

      Uh, there are few companies I c- I have difficult time thinking of a for-profit company who-

   2. KSKara Swisher1:55

      Mm-hmm.

   3. SGScott Galloway1:57

      ... um, has a greater impact relative to its market capitalization. I mean, I think the market cap of... (sighs) I forget what the market cap is, but it's essentially, you know, it- it- y- you have... Oh, it's $33 billion, which is, um, you know, Warner's 20, which is unfair 'cause it has 40 billion in debt, so it's 60 billion in enterprise value. But it's $33 billion, which is, you know, big, but this is arguably... I mean, you could make a no- you could definitely make an argument this is one of the five or 10 most influential companies in the world, and a lot of people think that this company literally picks the Republican nominee, uh, for president and has a huge influence. And Fox's viewership is really strong. I mean, he's, actually, I don't think it's fair to, to say Lachlan's done a terrible job. I, I think the Dominion case was obviously a huge stubbed toe, but I think that's more about the fact that... Well, anyways, uh, y- I think y- I think it's unfair to say he's mone- done a bad job. What I took from this entire story-

5. 2:51 – 2:57

   Kara vs. Scott on Lachlan’s performance and looming legal exposure

   1. KSKara Swisher2:51

      Oh, come on. The two cases, there's Smartmatic coming. Bill O'Reilly and other gropers at that company. But go ahead. Go ahead.

6. 2:57 – 4:03

   Scott’s personal takeaway: family relationships as the real scorecard

   1. SGScott Galloway2:57

      Let me say the HR has not (laughs) been very good here, but the company is, the company is as influential as it has ever been, and the Wall Street Journal is amazing. Um, anyways, uh, uh, uh, uh, up for debate whether you think he's done a good job or not. What I took from this had nothing to do with business. Nothing. And that is, I'm, I'm turning 50 and my sole objective right now, all the money I'm spending, almost every... M- like, my biggest thing right now, and my kids are-

   2. KSKara Swisher3:28

      Mm-hmm.

   3. SGScott Galloway3:28

      ... about to be 14 and 17, I'm buying homes in beautiful places, I'm thinking about where we're gonna live, and making huge investments in my kids, because all I want, m- first and foremost, is I wanna spend a ton of time with my boys when, when they're older. And this is a man who, by any stretch of the imagination, whether you think he's Satan's devil or whatever, has had a remarkably successful career in terms of influence and impact. And when he's getting married, three of his four kids didn't show up.

   4. KSKara Swisher3:58

      I know. Wasn't that incredible?

   5. SGScott Galloway3:58

      Which in my view, which in my view, means you have failed.

   6. KSKara Swisher4:02

      Yeah.

7. 4:03 – 4:22

   Dynastic wealth and taxes: Scott’s argument for higher rates

   1. SGScott Galloway4:03

      And i- i- uh, I also reverse engineered to another thing. Tax policy. I think we dramatically need to increase tax rates above, say, 10 million a year or on trusts, because I'm telling you, Kara, creating dynasties, it doesn't do anyone any good. Do you think this has been good for their family?

8. 4:22 – 5:05

   Kara: Rupert’s “Succession” endgame and the death-clock reality

   1. KSKara Swisher4:22

      No. And I, I, I, I think it, it's succession. Is, we've got succession here. And he'll, you know, if he dies before this thing gets to trial, it stays the same and then we'll see what happens to this, um, to this company. Because the other three, I wouldn't call them united, but now they are. Now they're like, "Screw you, Dad." Like, it's really, it's, it is pathetic. It's path-

   2. SGScott Galloway4:43

      They're against their dad and their dad's fi- this is, this is, uh, like, the, the second thing I've, just behind wanting to spend a lot of time with my boys, you know what I really hope? I really hope that my boys are friends when they're older. And sometimes with the way they go at it, I think there's, that's not a given. (laughs) Can you imagine this? A family where three of the siblings-

   3. KSKara Swisher5:04

      It was already-

   4. SGScott Galloway5:04

      ... have side... Go ahead.

9. 5:05 – 5:53

   Is Lachlan influencing Rupert? Age, agency, and blame

   1. KSKara Swisher5:05

      Yeah. It's t- it was tense between Lachlan and the rest of them. And, but you know, uh-

   2. SGScott Galloway5:08

      Because of business.

   3. KSKara Swisher5:10

      Liz was between, Prudence is o- out in Australia, does her own thing, but it's just, it's, it's ridiculous. It's a ridiculous thing to do at this moment in time because he's gonna... Let me just tell you, Rupert Murdoch, you're gonna die at like... You know from Moonstruck? No matter what you do, Rupert Murdoch, you're gonna die, and you don't get to decide things after you're dead. That's it. That's it. And he's ruining the rest of his thing just because he has this... You know, some people think that Lachlan is unduly influencing him. He is 90 some years old. That's one of the little things, you know, that Lachlan's engineering this.

   4. SGScott Galloway5:40

      Well, uh, w- h- uh, how... You, you can make the same argument on the other three.

   5. KSKara Swisher5:44

      No, they didn't start this thing. This was, this has been in place for, for y- decades. Th- they didn't just move to change it. This, this, Rupert did. Yeah.

10. 5:53 – 7:57

    What an irrevocable trust is—and the legal ‘loophole’ Murdoch needs

    1. SGScott Galloway5:53

       A little bit of background. Uh, uh, an irrevocable trust is basically-

    2. KSKara Swisher5:57

       Mm-hmm.

    3. SGScott Galloway5:57

       ... a tax shelter. And this is what I'm getting at. Dynasties, as far as I can tell, don't do anyone any good.

    4. KSKara Swisher6:02

       Sure.

    5. SGScott Galloway6:03

       ... they remove tax dollars-

    6. KSKara Swisher6:04

       Mm-hmm.

    7. SGScott Galloway6:04

       ... from the commonwealth. Your kids d- end up fighting each other and not showing up at their father's wedding.

    8. KSKara Swisher6:10

       Mm-hmm.

    9. SGScott Galloway6:10

       And y- y- dynastic wealth and tax policies that lead to dynasties used to be something that we weren't down with. We used to have very high, um, inheritance taxes, and now we have raised the minimums-

    10. KSKara Swisher6:21

        I get that. I get that.

    11. SGScott Galloway6:21

        ... from $5 million per person to $11 million. And here's the thing, and this is where I'm going and I'm becoming Bernie Sanders and Elizabeth Warren, giving your kids financial security? Fine. No, like, okay. But if they each get $25 million, not necessarily bill- anything you give your kids above $10 or $20 million, it doesn't make them any happier. And at some point, when you have this dynasty that has all this political influence and impact on the world, it ends up separating families and dividing them.

    12. KSKara Swisher6:45

        That could be.

    13. SGScott Galloway6:46

        And-

    14. KSKara Swisher6:46

        But I'm saying this thing was in place for decades. He agreed to it, this is what it is, and now he's having buyer's remorse. It's all Rupert-

    15. SGScott Galloway6:54

        W- well, there's-

    16. KSKara Swisher6:54

        ... Ward Laughlin generated. This is not those other kids doing this.

    17. SGScott Galloway6:58

        But this is what you have to do. To put something in something that transfers to your kids-

    18. KSKara Swisher7:03

        Mm-hmm.

    19. SGScott Galloway7:03

        ... tax-free is called a trust. But the thing about the trust is it has to be irrevocable. Now, that term irrevocable is really important. It means that the construct and the agreements within the trust have to hold. You don't get to then decide to change it. And what he's claiming is, "No, I want the irrevocable trust to be revokable," and there's a loophole. And the loophole is the following. If you can prove you're making decisions that, um, h- help, help them economically, right? But he's basically gonna try and say that my view, my endorsement of someone who has a different political complexion than the other three will help them economically. And I would think legally, the other three would be able to swap that down, or just delay, just take a note, you know, a page out of the Trump lawyer handbook and just keep delaying this case 'cause he's not, his expiration date is about 10 years past due.

11. 7:57 – 8:14

    Closing: comparisons to other media dynasties and a grim forecast

    1. KSKara Swisher7:57

       Oh, no, his mother lived to, like, way past 100. I forget. She was riding around in a golf cart. Who knows? In any case, it's sad and pathetic and he's going right down the Sumner Redstone avenue, as they all... I thought maybe they would avoid this, but I don't know.

Episode duration: 8:14