News Corp, the parent company of the Wall Street Journal, has faced a challenge from activist investor Starboard Value aimed at dissolving its dual-class share structure. This move poses a significant threat to the Murdoch family’s control over the company. The dual-class structure, which gives Rupert Murdoch control of around 40% of the voting stock, has come under scrutiny from Starboard Value, which owns approximately 2% of the company’s Class A shares.
Starboard Value made its push for change through a non-binding shareholder resolution, signaling its intentions to challenge the existing structure at News Corp. Managing member Jeff Smith has been vocal about the need for the company to spin out its real estate assets, including its stake in REA Group of Australia. Smith emphasized the potential for creating value through alternative paths, such as declassifying the shares, and highlighted the importance of considering different strategies to unlock value for shareholders.
Rupert Murdoch, the 93-year-old media mogul, has been embroiled in a legal battle to transfer control of the family trust, which holds the News Corp stake, to his son Lachlan Murdoch. This development has been reported by major publications such as The New York Times and The Wall Street Journal. In November, Rupert Murdoch stepped down as chair of the board at News Corp and Fox Corp, assuming the role of chair emeritus at both companies. Lachlan Murdoch now serves as the sole chair of News Corp and retains his positions as executive chair and CEO of Fox Corp.
Following reports of Starboard Value’s challenge to News Corp’s dual-class structure, the company’s shares experienced a slight decline of about 1%. However, there was a modest uptick in the stock price when Reuters first broke the news of the activist investor’s move. Starboard Value has a history of mounting campaigns against various companies, including Autodesk, Match Group, and Salesforce. News Corp, in addition to owning the Wall Street Journal, also has stakes in other prominent publications such as The Sun and book publisher HarperCollins.
The challenge from Starboard Value highlights the ongoing debate surrounding dual-class share structures and corporate governance. The outcome of this push for change at News Corp could have significant implications for the company’s leadership, shareholder value, and future strategic direction. It remains to be seen how News Corp will respond to these pressures and whether it will take steps to address the concerns raised by activist investors like Starboard Value.