Starboard Value Challenges News Corp Governance Structure

Activist investor Starboard Value is challenging News Corp's dual-class share structure, which grants significant control to Rupert Murdoch and his family, citing risks to the company's stability amid ongoing familial disputes. In a letter to shareholders, Starboard's CEO Jeff Smith highlighted internal conflicts between Lachlan Murdoch and his siblings, James, Elisabeth, and Prudence, regarding the company's future direction. The hedge fund, which holds a minority stake in News Corp, emphasized that the current governance structure exacerbates these tensions and poses a risk to shareholders. Rupert Murdoch's recent transition to a non-executive role has intensified scrutiny over the succession plan, with reports of legal battles over control of the family trust that manages the Murdoch's stakes in the company. Starboard argues that eliminating the dual-class structure would enhance governance and mitigate the impact of the family's complex dynamics on corporate strategy. The upcoming annual shareholder meeting will likely serve as a crucial platform for this debate.