Can the Murdochs Hang on to News Corp?

Do Rupert Murdoch and his brood face the very same fate as the Roy family, who lost control over their media empire amid a messy succession battle? 

On Tuesday, an activist investor and a pair of proxy advisory firms joined the ranks of those backing a recapitalization plan that would end the company’s dual-class share structure, which gives the Murdoch family outsized control of the company.

Election Day

The Murdochs own just 14% of News Corp, the parent company of The Wall Street Journal, HarperCollins, and a bevy of other publishing properties. But thanks to the dual-class share structure, the family controls roughly a 40% voting share. It’s not the first time anyone’s taken note of this disparity. About a decade ago, a similar move was made to strip the Murdochs of their disproportionate power, with roughly 90% of non-Murdoch-aligned voters backing the ultimately doomed effort. 

But the movement has been reborn. Back in September, Reuters reported that Starboard Value, the activist hedge fund run by Jeffrey Smith, filed a resolution to put to vote the company’s share structure at its shareholder meeting on Nov. 20. And this time around, the rebels have earned support from big-name backers:

• Last Thursday, the influential proxy advisory firm Institutional Shareholder Services came out in support of Starboard’s plan. On Tuesday, it was joined by fellow proxy advisors Egan-Jones and Glass Lewis.
• Fellow activist investor Irenic Capital Management came out in support of the measure on Tuesday, though in a letter sent to News Corp’s board and seen by CNBC, the firm stressed that it backs the current management’s leadership: It just supports a “one share, one vote” principle.

Starboard has criticized the company’s recent performance, and has pushed for News Corp to spin off its valuable portfolio of real estate listing sites. Expect all eyes to be on News Corp’s earnings report — scheduled for Thursday — before the Nov. 20 meeting.

Family Matters: Elsewhere in medialand, Bloomberg reported Tuesday that Shari Redstone and her son, Tyler Korff, will leave the board of Paramount Global after the company completes its planned merger with David Ellison’s Skydance Media, bringing the family’s long reign to an end. Let this be a lesson to the Murdochs: Sometimes you just have to let go.