Starboard Value, an activist investor, has made a bold move to dissolve News Corp’s dual-class share structure. This is seen as a direct challenge to the Murdoch family’s control over the Wall Street Journal parent company. The push was initiated through a non-binding shareholder resolution, indicating a strong desire to shake up the current ownership dynamic. As of September, Rupert Murdoch holds around 40% of the company’s voting stock, solidifying his control over News Corp.
Managing member Jeff Smith of Starboard Value has been vocal about the need for change within News Corp. With Starboard owning roughly 2% of the company’s Class A shares, there is a significant stake in the future direction of the company. Smith has previously mentioned the possibility of News Corp spinning out its real estate assets, including its interest in the REA Group of Australia. This aligns with Starboard’s strategy of unlocking shareholder value by restructuring underperforming companies.
Aside from the pressure from Starboard Value, the Murdoch family is embroiled in a legal battle over control of the family trust holding the News Corp stake. Reports from prominent publications such as the New York Times and Wall Street Journal have shed light on Rupert Murdoch’s efforts to pass on control to his son Lachlan Murdoch. This power struggle adds another layer of complexity to News Corp’s already turbulent situation.
Last November, Rupert Murdoch stepped down as chair of the board at both News Corp and Fox Corp, signaling a shift in leadership within the Murdoch family empire. His son, Lachlan Murdoch, has taken on the role of sole chair at News Corp and continues to serve as executive chair and CEO at Fox Corp. The changing of the guard reflects a transition in power dynamics that could have far-reaching implications for both companies.
Following news of Starboard Value’s push to dissolve the dual-class share structure, News Corp’s shares experienced a slight dip. This indicates investor uncertainty over the potential changes that may come as a result of Starboard’s influence. Starboard has a history of mounting successful campaigns at companies like Autodesk, Match Group, and Salesforce, demonstrating its ability to drive positive change and unlock shareholder value. News Corp, with its ownership of prominent media outlets like the Wall Street Journal and The Sun, is now facing a pivotal moment in its corporate governance.