Activist Investor Challenges Murdoch's Control over News Corp

Activist investor Starboard Value has made a move to dismantle the dual-class share structure of News Corp, aiming to reduce the Murdoch family's influence over the media conglomerate.

• Starboard, holding a 2% stake in News Corp's Class A shares, submitted a non-binding shareholder resolution to dissolve the dual-class system.
• The current structure grants Rupert Murdoch control over approximately 40% of the company's voting stock.
• News Corp has declared its intention to oppose Starboard's proposal, emphasizing the success of the current structure.

Starboard Value's Push for Change

Starboard's move comes after previous efforts to influence News Corp's direction.

• Last year, Starboard advocated for spinning off News Corp's real estate assets, including a stake in REA Group of Australia.
• The firm's managing member, Jeff Smith, previously acknowledged the potential for declassifying News Corp's shares but suggested alternative approaches to value creation.

Rupert Murdoch's Continued Influence and Legal Battle

Despite stepping down as chair of both News Corp and Fox Corp in 2023, Rupert Murdoch, at 93 years old, remains a powerful figure in the media landscape.

• Murdoch is currently engaged in a legal dispute to ensure his son, Lachlan Murdoch, takes control of the family trust holding the News Corp stake.
• Lachlan Murdoch has assumed the role of sole chair of News Corp, while also serving as Fox Corp's executive chair and CEO.

Starboard Value's History of Activism

Starboard Value is known for its active involvement in various companies, often pushing for strategic changes.

• The activist investor has previously launched campaigns at companies like Autodesk, Match Group, and Salesforce.

News Corp's Assets and Operations

News Corp's holdings encompass a diverse portfolio of media assets.

• The company owns publications such as The Wall Street Journal, The Sun, and HarperCollins.

Impact of Starboard's Push on News Corp Shares

News Corp's share price initially dipped upon news of Starboard's resolution but recovered slightly following Reuters' report.

• The outcome of Starboard's campaign and its potential impact on News Corp's future direction remain to be seen.