Activist investor Starboard Value has recently made a bold move to dissolve News Corp’s dual-class share structure, a move that directly challenges the Murdoch family’s control over the media conglomerate. This comes as a significant challenge to the long-standing control that the Murdoch family has maintained over the Wall Street Journal parent company.
Striving for Change
Starboard’s push for change was initiated through a non-binding shareholder resolution, signaling a clear intent to shake up the current power dynamics within News Corp. As of September, Rupert Murdoch held approximately 40% of the company’s voting stock, solidifying his control over key decision-making processes within the organization.
With Starboard owning around 2% of News Corp’s Class A shares, the activist investor group is making its voice heard and calling for a restructuring of the company’s governance model. Managing member Jeff Smith has been vocal about the need for change, advocating for News Corp to spin out its real estate assets, including its interest in REA Group of Australia. This move is part of a larger strategy to unlock shareholder value and drive growth within the organization.
In addition to the push for corporate restructuring, Rupert Murdoch is currently embroiled in a legal battle to grant his son Lachlan Murdoch control over the family trust that holds the News Corp stake. This legal dispute has been widely covered in major publications such as the New York Times and Wall Street Journal.
Recent leadership changes within News Corp have also added to the existing turmoil. Rupert Murdoch, at the age of 93, stepped down as chair of the board at both News Corp and Fox Corp last November. He now holds the title of chair emeritus at both companies, while his son Lachlan Murdoch has taken on the role of sole chair of News Corp and continues to serve as Fox Corp’s executive chair and CEO.
News of Starboard’s push for change at News Corp has already had an impact on the company’s stock price, with shares dipping approximately 1% following the news. However, the stock did see a slight recovery after Reuters first reported on the activist investor’s actions. Starboard has a history of mounting campaigns at various companies, including Autodesk, Match Group, and Salesforce.
News Corp, known for its ownership of prominent publications such as the Wall Street Journal, The Sun, and book publisher HarperCollins, is now facing significant pressure from activist investors like Starboard Value. The outcome of this power struggle could have far-reaching implications for the future direction of the media conglomerate and its leadership structure.