Activist investor Starboard Value has taken steps to dissolve News Corp’s dual-class share structure, potentially threatening the Murdoch family’s control over the Wall Street Journal parent company. This move was made through a non-binding shareholder resolution, indicating a significant push for change within the company. News Corp’s current structure, giving Rupert Murdoch almost 40% control of the voting stock, has been a point of contention for Starboard.
Starboard, which owns approximately 2% of News Corp’s Class A shares, has been vocal about its desire for the company to spin out its real estate assets, including its stake in REA Group of Australia. The firm’s managing member, Jeff Smith, has highlighted the potential value creation that could result from restructuring the company’s assets and governance.
Legal Battles and Leadership Changes
In addition to the challenge from Starboard, Rupert Murdoch is also facing a legal battle to pass control of the family trust holding the News Corp stake to his son, Lachlan Murdoch. This transition of power has been the subject of reports from publications like the New York Times and Wall Street Journal. Rupert Murdoch recently stepped down as the chair of the board at News Corp and Fox Corp, with Lachlan Murdoch taking over as the sole chair of News Corp and maintaining his role as Fox Corp’s executive chair and CEO.
Following news of Starboard’s move to dissolve the dual-class share structure, News Corp’s shares experienced a slight decline of about 1%. Starboard, known for its activist campaigns at companies like Autodesk, Match Group, and Salesforce, has a track record of pushing for change to unlock value for shareholders. In addition to its flagship publication, The Wall Street Journal, News Corp also owns media entities like The Sun and publisher HarperCollins.
The challenge to News Corp’s dual-class share structure by Starboard Value represents a significant push for change within the company’s governance and ownership structure. This move, along with ongoing legal battles and leadership changes, signals a period of transition and potential restructuring for one of the media industry’s key players.