Crikey V Lachlan Murdoch: What does it mean for the Murdochs?

Sascha: [00:00:04] I'm Sascha Kelly and welcome to the Dive, the podcast that asks who is a said the businesses needs to be all business. If you're joining us for the first time and welcome this is actually the second episode of a two part series we're releasing on the Dive on Monday. I spoke with Sarah Allison, staff writer at The Washington Post, and she talked to me all about the case. Beginning on the 17th of April, Fox News was Dominion Voting Systems. So if you haven't caught up with that episode, I suggest you start there because today we're turning closer to home where there's another defamation case playing out. Lachlan Murdoch personally filed defamation proceedings against Crikey, an online news outlet, in response to an article published on the 29th of June 2022. He argues it defamed him by naming his family as an unindicted co-conspirator of former US President Donald Trump. 

Audio Clip: [00:00:56] His lawyers allege in court documents that the article carried more than a dozen false and defamatory meanings about Lachlan Murdoch. 

Sascha: [00:01:04] The trial was originally scheduled to take place in March, but it's now been delayed until October, after a considerable back and forth between the two parties. Today, I want to know what is the story of this complicated case and is the result going to change anything long term for Rupert's empire and the plan for Lachlan Murdoch to take over? To help me untangle this story, today I am speaking to freelance investigative journalist Paddy Manning, also the author of The Successor, a fantastic biography on Lachlan Murdoch. I've put those details in the show notes below. Let's get into our conversation. Welcome Paddy, to The Dive. There has been a lot of back and forth between the two parties in this case. Can you please give me a quick rundown of what's happened since this article was first published mid-last year? 

Paddy: [00:01:59] Thanks for having me, Sascha. It's not a day to recap this been a hell of a lot of preliminary hearings and the trial's been rescheduled once and may be rescheduled again. Basically, what's happened since the case was originally brought by lockdown and I stress that has been brought by Lachlan personally, not by Fox or News Corp. What's happened is that the trial has been postponed. It was supposed to happen in March last month and now is set down for October, but it may be pushed back again. The reason it was postponed the first time was that Loughlin's lawyers went into court to argue to join the CEO of Private Media, which is the Crikey published job, Will Heywood and the chair Eric Beecher to the suit. Because what Lachlan's lawyers were arguing and it's an interesting kind of twist to this case, is that it's the republication of the article in August as well as the original publication which is at issue here, because Lachlan's lawyers argue that this was a business strategy. The trade publication was part of a business and marketing strategy for Crikey, where they wanted to use this case, this article and their dispute with Lachlan Murdoch to drive subscriptions and fundraising. And it is certainly true that Crikey has, you know, raised some hundreds of thousands of dollars to fund its defence and has attracted a huge amount of publicity as a result of being sued by Lachlan Murdoch. So now add it. Bringing that extra evidence and adding those witnesses meant that the case was postponed for six months until later this year. Now, of course, what's happened is that we have seen in the US a whole lot of emails, texts, internal communications and sworn testimony by everyone at Fox News and Fox Corporation, including Lachlan himself as CEO of Fox Corp and the chair Rupert, the founder of the Fox News. We've seen a whole lot of evidence in a defamation case being brought in the US by Dominion Voting Systems. The electronic voting machine maker, which is suing Fox News for defamation over the big lie in the wake of the 2020 election. And all of that evidence Crikey is now arguing is relevant to its defence, bearing in mind that what Crikey originally published was an opinion piece by a political editor, Bennett came which called the Murdochs the unindicted co-conspirators with Trump in the January six insurrection. What we heard this week is that the judge is starting to get a bit sick of this case getting sort of bigger than Ben-Hur, if you like, because the amount of evidence that might be involved in trolling through all of the material discovered by Dominion in its defamation suit in the US, that's going to take up a hell of a lot of court time. And he's saying it might blow out the schedule for October and perhaps. Postpone the trial again. And he raised the possibility that he might order the parties back to mediation. So it is turning into, you know, sort of lawyer's picnic. I watched a bit of the kind of procedural hearing this week and thought with the clock ticking and the amount of the metre running, the cost of this case is just going to get extremely high on both sides. 

Sascha: [00:05:28] Certainly, I mean, you've done a very good job because I think even trying to research this, it has definitely been back and forth, back and forth. And you mentioned that the judge is sending them back to mediation because they've already had one attempt at mediation that's failed. 

Paddy: [00:05:43] Yes, that's right. Compulsory. And it did fail because, you know, on Crikey side, they say they want their day in court and they've said that publicly as well as in court. Lachlan only wants an apology. That's what he wants. And yeah, he's clearly infuriated. I've written in the Sydney Morning Herald in an opinion piece that his blood is up. He's clearly not happy to have himself described as party to a criminal conspiracy to overturn the US election and other things, which is the imputations that he says arise from the original comment piece in Crikey. Yes. So he's clearly outraged and believes that, you know, the piece was absolutely defamatory of him and his father as well. Crikey. Just by the way, one of the things that issue in the case, according to some of the evidence that we heard this week, is whether in fact Lachlan was identified in the original piece and whether he was actually personally defined. So that's another of the issues that will be kind of disputed at trial.

Sascha: [00:06:55] You've really clearly outlined, I think, Lachlan's argument for the case and you've talked about the fact that Crikey is now linking the defence to the Dominion case happening over in the US. Can you just outline what they have to kind of prove in their defence or what their argument is? 

Paddy: [00:07:14] Crikey is arguing that the comment piece was in the public interest for a whole range of reasons. It's very hard to predict how this case is going to how this argument is going to travel because we have a new public interest defence under the national defamation law that was agreed in the last few years and it has been implemented by most states. And you know, without getting too into too much detail, there are a number of different tests and criteria that apply as to whether Pace's was in the public interest. Some lawyers say, I mean, while the subject matter of the January six insurrection and the contribution made to it by Fox News and even, you know, the contribution made to it by the Murdochs, including Lachlan, would surely be in the public interest in general. There is a kind of question as to whether the public interest defence applies and if so, how it applies to comment pieces. It was meant to protect kind of according to the architects of the defence, they more clearly had in mind the kind of investigative journalism that, for example, Four Corners might do or rather than comment. And so what Crikey can't argue is that this was an honest opinion because that's a separate kind of defence, because Crikey has already admitted there is no evidence that Lachlan Murdoch was conspiring with Donald Trump to overturn the US election. Of course. And in fact arguably what we're seeing in the Fox and Dominion case is that the Murdochs did not believe whatsoever what Trump or his lawyers were saying about the election. They didn't believe the election was stolen at all. So, of course, there is no question that Lachlan Murdoch conspired with Donald Trump. So they can't, you know, to truth is normally a defence in a defamation case. They can't rely on the honest opinion defence at Crikey. So they having to rely on the article being in the public interest and to argue that no or no reasonable reader would have read Bernard Kane's piece and and truly taken from us that he was seriously suggesting the Murdochs had conspired with Donald Trump. And so they said the imputations don't arise. I mean, this is all very perilous, trying to paraphrase lawyers, of course, but in plain language, this is how I understand the argument. 

Sascha: [00:09:41] Sorry to interrupt. I'm going to be back with more of my conversation with investigative journalist Paddy Manning in just a minute. And when we return, he shares his thoughts on the real life succession story that's on the horizon for the Murdoch clan. He's got such fascinating insights. I cannot wait for you to hear it. That's in just a minute. 

Audio Clip: [00:10:03] My name is Will Hayward. I'm the CEO of Private Media, parent company of Crikey. It is the opinion of this paper and its journalists that Fox News actively supported and promoted a concerted attempt to jeopardise American democracy. 

Sascha: [00:10:17] Welcome back to the dive. Today I'm speaking with investigative journalist Paddy Manning about the defamation case Lachlan Murdoch has lodged against Crikey publisher Private Media. Let's get back to our conversation. I just love you to illustrate, which I think is a common misconception for lots of people, the difference between Australian defamation law versus the U.S. law, because of course these two cases are kind of happening concurrently or about to happen at the same time on two different continents, but they have quite different approaches to defamation. 

Paddy: [00:10:50] Oh, absolutely. And that's because in the US Constitution, the First Amendment guarantees free speech and we have no comparable guarantee in Australia at all. We have plenty of people will tell you we do not have free speech in Australia. We have the most restrictive defamation laws in the world, even though there has been this national effort to overhaul the defamation law to protect public interest journalism in the US. The test for newspaper publishers is not whether they allege defamation is true about whether it was whether they, a publisher, showed effectively actual malice towards the subject of the allegation. So actual malice is the test in the United States, and that means whether Fox News had reckless disregard for the truth of what it was putting to air about Dominion. And so Dominion, that trial have goes ahead in two weeks where it's going to be the media trial of the century. You're going to see Rupert and Lachlan in open court. But Latham hasn't been in court since the collapse of One.Tel, you know, 20 years ago. So now in Australia the test is very different. And as I said, normally truth is a defence against the defamation case, but Crikey is can't rely on truth in this instance. What it's relying on is a public interest defence. And the problem for all legal experts analysing this case is that the public interest defence is untested. It has not been. It's new. This is the first case that will be a test case of the public interest defence. In some ways, according to many media lawyers, it is unfortunate that the first case that comes to trial under this provision, Section 29, is on an opinion page because it wasn't exactly what the framers of the section of the Public Interest Defence had intended. They were more thinking about investigative journalism, as I said before. So you can find experts who will say Crikey is in trouble here because, you know, it isn't literally true that Lachlan Murdoch conspired with Donald Trump and there was some suggestion which might constitute malice as well, which is inimical to the public interest under the defamation law in Australia as well. If it was considered malicious on his part to make these allegations when it knew they weren't true, and then to publish them in an effort to draw subscriptions, This is what Lachlan's camp is arguing, that it's an abuse of free speech, in fact. And so there's been a lot of criticism of Lachlan that he is a media proprietor, unlike Rupert, his father, who never said to journalists. Lachlan has been described widely in the media as thin skinned and prepared to sue journalists, which is not a great look for a media proprietor. On the other hand, Lachlan's camp argued that Crikey has abused free speech by publishing and republishing this opinion piece and the associated headlines and marketing material and so forth. So, so very hard to predict because we've got new law here being tested. So you can say it's a very nuanced case. People that think, oh, it's signed, sealed and delivered. Now that we've got all the evidence out of the Fox and Dominion case that Lachlan is going to lose in his case against Crikey, I think are completely misreading the legal distinction between, you know, American defamation law and and the law we have in Australia. 

Sascha: [00:14:27] And as you said, you know, this all kicked off mid-last year. It's April now. It's going to start in October. It's just been rapidly developing. I imagine, as you said, very hard to predict if we had this conversation again on the eve of the trial in October, I'm sure we'll have completely different perspectives once again. Look, Pattie, you did write the book on Lachlan Murdoch, his biography, which I will put in the shownotes. So I can't let you go without asking, in your opinion, between the case in the USA and this case in Australia, do you think this will change anything long term for Rupert? Empire, the Murdoch empire and the plan for Lachlan to take over. 

Paddy: [00:15:07] Well, it's an interesting question. Sastre, basically. I mean, Lachlan is in charge right now. He is the successor as the title of the book because he's been appointed three years ago more now actually is probably is into his fourth year as CEO of Fox Corporation and the co-executive chairman with his father, Rupert James and Liz. The other candidates for the succession are out of the business altogether. Rupert has kind of anointed Lachlan a long time ago now, boss, but there is deep division, as I reported in the book between the siblings. That includes Liz, Lachlan and James five Rupert second marriage to Anna, but also an older sister of theirs. Prue from Rupert's first marriage. And they are the four Murdoch children that sit on the Murdoch family trust and the middle of Family Trust has eight votes. The Murdoch Family Trust controls 40% of the voting shares in both Fox and News Corp, and it's the vehicle through which the Murdoch family control the empire. And those eight votes are split four between Rupert, who has four, and the kids who have one each. Those four elder kids by his first two marriages, when Rupert dies and bearing in mind that has just turned 92 and that when Rupert dies, his votes expire. And so at the moment, Rupert and Lachlan equal five votes and they can control the Murdoch family trust without and through that the empire. But once Rupert dies, it's an open question as to whether Lachlan will be able to maintain control of the trust. He will only be one vote out of four. And the siblings are deeply divided. And as I was told on reporting, the successor, the siblings at one point were intending to sell out to Lachlan and Rupert and the documents were drawn up. And as the New York Times has revealed in the past. But what I reported was that the siblings are no longer interested in selling out. In fact, what they're interested in is reasserting control of the family business once Rupert dies and doing it in a way which and I'm quoting my own book here, protects and enhances democracies around the world rather than undermining them. And that's a clear statement of intent by Lachlan siblings that day. I mean, this is all off the record and on it's deep background that I, you know, got in the writing and researching of the book. But it's a clear statement of intent that they do want to bring Fox back to something like the centre and, and ditch this in particular election denialism that is, you know, roiling US politics now and in all of the cases there's dominion. There's also another voting machine manufacturer who's claiming even more money called Smartmatic that is also suing Fox News and then also the Crikey case all fade to the divisions inside the Murdoch family about the direction of Fox News in particular. And no doubt Lachlan's loudest critic has been his brother, James. And no doubt in James's camp, the current kind of defamation lawsuits are and potential potentially very expensive settlements will seem like a kind of vindication of their criticisms of of Fox's editorial direction. And I think that these cases will certainly fuel further division inside the Murdoch family and potentially some kind of reckoning if and when Rupert does formally retire and or pass away and lose. And, you know, those for his control of the family, trust is lost. So, yeah, I think it's all very high stakes. I mean, that's why they've called the book The High Stakes Life of Lachlan Murdoch. Everything he does as CEO of Fox and co-chair of News Corp, The stakes are always high for Lachlan, but right now I think he's definitely having a moment and I'll be absolutely transfixed, I suppose, as they are when when these cases do come to trial. 

Sascha: [00:19:40] Pattie, I think you said it transfixed. I mean, I could talk to you for another couple of hours. I think about all the stuff that you know, and I can see it's such a rich text. The siblings and the dynasty. Why have you spent a career investigating and researching them. I am going to let you go, though, because you've been so generous with your time. Paddy, thank you so much for joining us on the Dive today. 

Paddy: [00:20:00] Thank you. Sessions. I enjoyed it. 

Sascha: [00:20:02] I am so grateful for Paddy for coming on the show today and sharing his thoughts with us here at The Dive. I thought that was really insightful and so fascinating. He was just incredibly generous with his time. A reminder he wrote the book The Successor, which is a fascinating biography about Lachlan Murdoch. I've put details of that in the show notes below. Thank you for joining me for today's episode of The Dive. I'll be back in your ears with Darcy on Friday. Until then, take care.