Activist investor Starboard Value has taken steps to dissolve News Corp’s dual-class share structure, a move that could potentially challenge the Murdoch family’s control over the media company. The push was made through a non-binding shareholder resolution, with Starboard owning roughly 2% of the company’s Class A shares. This is a significant development, considering that as of September, Rupert Murdoch had control over around 40% of the company’s voting stock.
Managing member Jeff Smith of Starboard has been vocal about the need for change within News Corp. Last year, he expressed the firm’s desire for News Corp to spin-off its real estate assets, including an interest in REA Group of Australia. Smith also hinted at the possibility of declassifying the company’s shares, stating that it could be a way to unlock significant value for shareholders. This indicates a broader strategic shift that Starboard is advocating for within News Corp.
In addition to the shareholder activism, Rupert Murdoch is reportedly facing a legal battle to give his son Lachlan Murdoch control over the family trust that holds the News Corp stake. The Murdochs’ family dynamics and corporate governance structures are coming under scrutiny as the media empire undergoes significant changes. Last year, Rupert Murdoch stepped down as chair of the board at News Corp and Fox Corp, with his son Lachlan taking on a more prominent leadership role within the companies.
The news of Starboard’s push to dissolve News Corp’s dual-class structure had an immediate impact on the company’s stock price, with shares experiencing a slight decline. This move by Starboard also aligns with its track record of mounting campaigns at various companies, including Autodesk, Match Group, and Salesforce. News Corp, known for its ownership of prominent media outlets such as The Wall Street Journal and The Sun, is now facing increased pressure from activist investors to reevaluate its corporate structure and governance practices.
Overall, the challenge to the Murdoch family’s control over News Corp marks a critical moment in the company’s history, signaling a potential shift in power dynamics and strategic direction. As shareholder activism continues to gain momentum in the corporate world, News Corp will need to carefully navigate these challenges and adapt to the evolving demands of its investors and stakeholders.