Starboard Value Challenges Murdoch’s Control Over News Corp

Rupert Murdoch‘s transition of leadership at News Corp is facing opposition from a significant shareholder, hedge fund Starboard Value. In a letter addressed to News Corp shareholders, Starboard Value called for the removal of the company’s dual-class share structure, which allows Murdoch to retain majority control.

The timing of the letter is notable as it was released just one day prior to Lachlan Murdoch‘s scheduled address at a Goldman Sachs conference. The hedge fund’s letter expressed concerns over the potential impact of complicated family dynamics on the stability and strategic direction of News Corp.

In the letter, signed by Jeffrey C. Smith, Starboard Value highlighted ongoing tensions within the Murdoch family regarding control of the Murdoch Family Trust, which reportedly involves Rupert Murdoch and four of his children. Recent media reports indicate a legal battle emerging between Rupert and Lachlan Murdoch on one side, and their siblings James, Elisabeth, and Prudence on the other.

Smith pointed out that this familial conflict stems from disagreements over the future direction of both News Corp and Fox Corporation. He warned that such uncertainty poses a risk to shareholders, exacerbated by the dual-class share structure that allows the Murdoch family to hold super-voting shares.

This situation follows Rupert Murdoch’s announcement last September where he stated he would step down as chairman of both Fox Corp and News Corp, opting for an emeritus role instead. Lachlan Murdoch, having taken the helm as CEO of ‘new Fox’ after the sale of 21st Century Fox assets to Disney, now also chairs News Corp.

Starboard Value’s concerns were further emphasized by recent press coverage detailing the family feud over the Trust structure. According to Smith, the differing worldviews among the four Murdoch siblings with voting rights within the Trust could hinder effective strategic decision-making for the company.