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RUBY:

From Schwartz Media, I’m Ruby Jones, this is 7am.

New details have emerged in the divorce of Rupert Murdoch and Jerry Hall.

After speculation that their marriage ended over everything from smoking and drinking, to Hall controlling how much Murdoch could see of his adult children, it’s now clear that the real disagreement was over the division of the $71 billion deal to sell his film and television interest to Disney.

Today, Paddy Manning - contributor to The Saturday Paper and author of a forthcoming biography on Lachlan Murdoch, on the true story of the Murdoch divorce.

It’s Tuesday, July 19.

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RUBY:

So Paddy, you've been looking into what really happened between Rupert Murdoch and his most recent wife, Jerry Hall - why it is that they're divorcing. Before we get into what's gone on behind the scenes, the divorce announcement itself, it came about three weeks ago now, and it was a big surprise to a lot of people, wasn't it?

PADDY:

Yeah, this had been a happy relationship as far as everyone could tell, you know, close to the Murdochs, friends and family, to all intents and purposes, they look like a happily married couple.

And actually, as The New York Times describe it, an “October and December pairing”, with Jerry in her sixties and Rupert in his nineties now. And yeah, when they got together, Rupert had tweeted that he felt like in 2016 he was the luckiest and happiest man alive. So, you know, to all intents and purposes, it seemed like a very happy relationship.

The first public sign of any falling out between them came, when, what The London Telegraph described it as, a ‘mass absence’ of Hall and her family and friends at Rupert Murdoch's annual summer party at London's Serpentine Gallery, which is one of the highlights of the social calendar.

And, you know, still clinging on to his job, the British prime minister, Boris Johnson, was there and had a 15 minute conversation with Rupert. Hall's own kids weren't there, her friends weren't there. And The New York Times, which first broke news of the divorce, their scoop came two days later.

Archival tape -- Entertainment Reporter:

"Well now to billionaire media baron Rupert Murdoch calling it quits with his fourth wife"

Archival tape -- News Anchor:

"91 year old media mogul Rupert Murdoch calling it quits with former model Jerry Hall"

Archival tape -- News Presenter:

"Rupert Murdoch has made headlines this week with news he's divorcing wife number four supermodel Jerry Hall. The split has sparked worldwide speculation about the settlement"

PADDY:

So that was only three weeks ago. And since then, Jerry, through her lawyers in the Los Angeles County Court, has filed for divorce, citing irreconcilable differences and formally now, he [Rupert] has a month to respond to those divorce proceedings.

At first there was kind of a discussion about, you know, whether Jerry was drinking too much and smoking too much for Rupert. And people who knew Rupert, you know, he's fond of a drink himself and it was… just didn't ring true.

But then there were reports that a friend of Jerry Hall off the record told The Daily Mail that she had been a bit of a gatekeeper through the pandemic, you know, understandably trying to protect Rupert from COVID, but that she used to joke she was the ‘Covid police’ and a friend believed that this had been kind of misinterpreted by Rupert's kids.

And yeah, they couldn't get access to their dad. According to this unnamed friend, Jerry blamed Rupert's kids for the falling out. But that didn't quite ring true either, because they would support Jerry looking after their dad.

But there was a line in the Daily Mail report that did have a little bit more substance, and I think gave us a bit of an indication of the deeper reason for the divorce, and, of course, it's about money.

Earlier this year, apparently, there was a meeting with Jerry and the…Rupert's kids to talk about whether… how much money Rupert should leave or how much money Jerry should get when Rupert passed.

And at that meeting, my understanding - and The Daily Mail also reported this - is that Rupert's children were adamant that Jerry should not get anything further than what was in the prenup that they signed when they got married in 2016. And so that's an indication of how that… you can imagine how that kind of meeting went, and didn't sit well with Jerry...

RUBY:

Hmm. Okay, so that's some of what has been reported so far on the split. But during this time, you've actually been working on a book about Lachlan Murdoch. So can you tell me what you have uncovered then about what actually happened? What have you been told about why it is that Jerry Hall and Rupert Murdoch are divorcing?

PADDY:

Yeah, well, I mean, I have to say, I wasn't chasing this story. As you mentioned, I was working on…I’m right at the finishing stages now of a biography of Lachlan Murdoch, and have been going back to all my sources. And of course, naturally in that, through those conversations, I’m talking to people who…about what’s going on right now… and, yeah, I get told that there is a deeper reason, and it suddenly makes sense.

Archival tape -- News Presenter:

"Now in one of the biggest media deals in history, Disney is to buy 21st Century Fox from Rupert Murdoch for some 39 billion"

Archival tape -- Entertainment Reporter:

"Disney CEO Bob Iger sealing the deal with Rupert Murdoch, who built the Fox Global Empire"

Archival tape -- Entertainment Reporter:

"The deal means, in effect, that Mr. Murdoch is dismantling his media empire by selling the company that owns Sky and one of Hollywood's biggest studios"

PADDY:

The way it was explained to me is that ever since, you know, the 2019 sale of the bulk of the Murdoch empire, in particular the 21st Century Fox Film and Television Studios - which was sold to Disney in an absolute mega deal in 2019 for 71 billion USD - out of that sale came a massive windfall to the Murdoch family.

So Rupert has six children, to his three previous wives. Each of those six kids in the sale to Disney got a $2 billion windfall gain because they are equal financial shareholders in the Murdoch Family Trust, which owns roughly 40% of both Fox Corporation and News Corporation, and did own the same proportion of the voting shares in 21st Century Fox when it was sold.

So the bulk of the fortune was passed straight through to the kids. And at that point Jerry Hall is going, ‘What about my kids?’ She thought that it was reasonable that perhaps there should be something for her and her own kids with her former husband, Mick Jagger.

The source put it to me in these exact words: “Jerry was constantly trying to work out ways to channel some of Rupert's hard-earned through to her children with Mick. He turned the ATM off.”

RUBY:

We'll be back in a moment.

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RUBY:

Paddy, it sounds like this divorce, it's about money, but it's also about family dynamics, about who gets what and when they get it. I think we are all familiar to some extent with the Murdoch children in this scenario. But what about Jerry Hall's family, her children with her former husband, Mick Jagger, can you tell me about them?

PADDY:

Yeah, well, they're all, of course, also adults. The youngest is 24, but there are four kids that Jerry had through her 20 something year marriage to Mick Jagger. First, Elizabeth, 38, James 36, Georgia May, herself a supermodel, 30, and Gabriel, 24.

Jerry Hall, when she divorced from Mick Jagger - she got only a £10 million settlement out of that relationship. Mick Jagger was worth hundreds of millions of dollars then, and his fortune’s only grown since.

Although, you know, her four kids, you know, their father is extremely rich, but when they're looking over their shoulder at the six Murdoch kids who've all got $2 billion each, you can well imagine that there might be some sense of why can't we get a piece of that? And so what I'm told is that Jerry was trying to help her kids out with Rupert's money.

RUBY:

Right. And that didn't go down well. And that's where these divorce proceedings really began.

PADDY:

Well, that's what I'm told. And I have every reason to believe it. I've gone to the lawyers, I've gone to the public relations people on both sides. And, you know, I suppose we'll find out a bit more in due course.

RUBY:

So, Paddy, if this is all about money and this split has come about as a result of the way that profits are divvied up within the family. Are there, therefore, any other impacts on the Murdoch media empire of this divorce?

PADDY:

Well, it's highly unlikely. And the way the business empire is structured, the 40% voting share in both Fox and News Corporation is owned by the Murdoch Family Trust. The Murdoch family trust is split six ways, but the voting is divided four shares to Rupert and one each to their four older kids. And nothing in the divorce will affect the control of the business empire and will affect the trust.

But now what happens is you have a kind of argument over the division of a huge property portfolio, including, you know, some pretty significant acquisitions that have been made since Rupert and Gerry got married. They've bought two mansions in England, one at Henley, where they've been living in, one in the Cotswolds, which is that old estate that is going to be you know, they're going to spend £30 million renovating it.

And then Rupert's decided that like his old nemesis, Ted Turner, really needed a cattle ranch in Montana. The cattle ranch when it was bought it was supposed to be a romantic gesture, but apparently, as I was told “it’s fucking cold in Montana” and Jerry doesn’t want to spend that much time there, whereas Rupert loves it.

And then they've got properties in London. They've got a New York penthouse apartment at 1 Madison. It's 10,000 square feet. It's worth $78 million. They're trying to sell that. So, you know, there will be fallout. There will be financial fallout, no question. But it doesn't affect the running of Fox and News Corporation.

RUBY:

Okay. So no change to the control of the Murdoch businesses, which makes sense. But will there be an impact in terms of Rupert Murdoch's personal involvement in those media companies? Is this divorce likely to change how involved he is in the day to day running of his empire?

PADDY:

Well, Rupert has defied commentators and observers for decades with his longevity and his incredible commitment to and interest in and passion for the business that he's built. But yeah, Rupert has been stepping back. He's described himself famously as ‘retired’. But the thing is, with more time on his hands and no partner, you know, it's quite easy to imagine him wanting to get back on the phone and start running the business again.

And so there is a question as to whether it will complicate what has otherwise been a pretty clear succession from Rupert to Lachlan in recent years. Rupert has obviously great financial resources, the best healthcare in the world, and a family that is rallying around him as we speak.

And Rupert’s mother, Dame Elisabeth, lived to 103. She died in 2012. Rupert believes that he will outlive her - and no one's disagreeing with it. You know, he has every reason to expect that he's got another decade ahead of him.

RUBY:

Well, Paddy, thank you so much for your time.

PADDY:

Thank you.

RUBY:

Paddy Manning’s biography of Lachlan Murdoch, called The Successor, will be published by Black Inc in November.

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RUBY:

Also in the news today:

Ahead of next week’s national economic update, Treasurer Jim Chalmers has cautioned Australians to prepare for “confronting” news. Chalmers told the press that the Albanese government had inherited the “trickiest set of economic circumstances” in memory.

The economic update is expected to deliver information about higher inflation, which will mean a cut in real wages. It is also likely to contain the government’s plan for cost of living support.

And under increasing pressure, Sri Lanka’s acting president, Ranil Wickremesinghe, has announced a state of emergency - the terms of which are not yet known. As the economic and political crisis worsens, the process of electing a new president has begun in the parliament, with a vote set for tomorrow.

I’m Ruby Jones, this is 7am, see ya tomorrow.

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