Activist Investor Calls Murdoch Family Dynamics Risky For Shareholders Amid Succession Drama, Will Fight News Corp. Dual Class Share Structure
deadline.comNews Corp. investor Starboard Value said today it plans to challenge the company’s dual-class share structure that gives control to Rupert Murdoch, and would then transfer it to four of his adult children.
The problem is that James, Elisabeth, Prudence and Lachlan Murdoch, the sole chair of News Corp. as well as CEO of Fox, may not agree on how to run the family business, creating uncertainty that “represents a risk to shareholders,” Starboard said in a letter today.
The super voting stock that allows the family to control News Corp. with a relatively small economic stake is not in the best interests of average stockholders and certainly not something that should be transferred, it said. “This transition of power from Rupert Murdoch to his children has allowed for complicated family dynamics to potentially impact the stability and strategic direction of News Corp.
While we can understand how some could see a benefit to a visionary founder retaining outsized control for a limited duration of time, that potential understanding vanishes as super-voting power and the associated protections transition to others,” it said. “The four Murdoch siblings with voting rights within the Trust are reported to have widely differing worldviews, which, collectively, could be paralyzing to the strategic direction of the Company; more importantly, we are not sure why their perspectives should carry greater weight than the views of other shareholders.” The Sept.
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