As a seasoned gamer with a knack for following corporate drama, I must say this News Corp saga is starting to feel like a never-ending role-playing game (RPG). The Murdoch family feud, the power struggle, and the dual-class share structure – it’s all very reminiscent of a medieval dynasty trying to claim the throne.
A significant investor in News Corp. is contesting the power transfer from Rupert Murdoch to his son, Lachlan Murdoch.
Starboard Value, a well-known hedge fund, recently made its views public in a letter directed towards the shareholders of the newspaper conglomerate that owns The Wall Street Journal and New York Post. In this letter, they urged the company to abolish its dual-class share system and alluded to an ongoing disagreement within the Murdoch family.
The shift in authority from Rupert Murdoch to his offspring might complicate the structure and strategic path of News Corp, according to a letter penned by Jeffrey C. Smith of Starboard. The Murdoch family’s ownership of News Corp is handled by the Murdoch Family Trust, which appears to be primarily influenced by Rupert Murdoch and four of his children. Recent media reports suggest a legal dispute regarding control of this Trust, with Rupert Murdoch and Lachlan Murdoch against three other children of Rupert Murdoch.
Smith stated, “It’s clear that one major reason for the ongoing conflict is a disagreement about the future strategic vision for News Corp and Fox Corporation. This disagreement introduces an investor risk, which becomes even more significant due to the Murdoch family’s control shares and the suboptimal governance and oversight resulting from the dual-class share system.
In September, the elderly Murdoch, aged 93, declared he was relinquishing his position as chairman from the businesses he established, Fox Corp. and News Corp, and would instead hold an emeritus title. This decision precedes a court case in Nevada that’s drawing significant attention, where the management of his empire is being debated, with Lachlan and other siblings James, Elisabeth, and Prudence at odds over who should take the lead role.
After a report in The New York Times on July 24, which revealed a leaked confidential court document about disputes between Rupert regarding the arrangement of the family trust, Starboard Value wrote their letter.
The hedge fund argues that instead of getting entangled in a dispute over political viewpoints (Lachlan is perceived as more conservative, while James has backed Kamala Harris’ presidential campaign), removing the dual class structure could avoid this disagreement entirely.
In Starboard’s letter, Smith expressed that the four Murdoch siblings who hold voting rights in the Trust allegedly have diverse viewpoints. These contrasting opinions, when combined, could potentially hinder the Company’s strategic course. Furthermore, it remains unclear as to why their opinions should be given more importance than those of other shareholders.
More to come.
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2024-09-09 18:54