The Challenge to News Corp’s Dual-Class Share Structure

Activist investor Starboard Value has taken steps to dissolve News Corp’s dual-class share structure, which poses a direct challenge to the Murdoch family’s control over the media conglomerate. This bold move has significant implications for the company’s governance and future decision-making processes.

Starboard’s initiative was in the form of a non-binding shareholder resolution, indicating a strong desire for reform within News Corp. The Murdoch family’s current control over approximately 40% of the company’s voting stock has long been a point of contention for activist investors like Starboard.

Managing member Jeff Smith of Starboard Value has been vocal in advocating for change within News Corp. Smith has emphasized the need for the company to spin out its real estate assets, which could potentially unlock additional value for shareholders. He has also raised concerns about the dual class structure, hinting at the possibility of declassification in the future.

Aside from the internal challenges within News Corp, the Murdoch family is currently embroiled in a legal battle over control of the family trust that holds the News Corp stake. Reports from reputable sources like the New York Times and Wall Street Journal have shed light on the complexities of this ongoing feud.

Recent changes in leadership have added another layer of uncertainty to News Corp’s future trajectory. With Rupert Murdoch stepping down as chair and assuming a less active role in both News Corp and Fox Corp, his son Lachlan Murdoch has taken on more responsibilities within the organization. These shifts in power dynamics could have far-reaching consequences for the company.

Following news of Starboard’s push to dissolve the dual-class share structure, News Corp’s stock experienced a slight decline before stabilizing. This development highlights the sensitivity of investors to potential changes in governance and ownership structures within the company. Starboard’s track record of mounting campaigns at other notable companies adds to the intrigue surrounding News Corp’s future.

The challenge to News Corp’s dual-class share structure by activist investor Starboard Value represents a pivotal moment in the company’s history. As stakeholders closely monitor the unfolding developments, the outcome of this battle could reshape News Corp’s leadership, governance, and market positioning in the years to come.