Breaking News: Starboard Value Throws Down Gauntlet, Aims to Shake Up Murdoch's Media Empire

Hedge fund Starboard Value is shaking up the media landscape with a bold move against News Corp. According to insiders, they've filed a shareholder resolution to scrap the dual-class shares that give Rupert Murdoch control over the publishing powerhouse, including the Wall Street Journal.

This resolution is a direct challenge to Murdoch's long-standing dominance over the company. At the ripe age of 93, he's currently embroiled in a legal battle with his children over the future control of News Corp and its sibling company, Fox Corp. Starboard's resolution aims to prevent Murdoch's son, Lachlan Murdoch, from automatically inheriting control.

Now, while we're not big on gossip, we still want to dive into the juicy details. Starboard, known for its activist investing approach, has reportedly amassed a 1.9% stake in News Corp. That's equivalent to 7.2 million Class A shares and 8.7 million Class B shares. They've been flexing their muscles lately, pushing for changes at big-name firms like Match Group, Autodesk and Salesforce.

But here's the kicker: the shareholder resolution won't legally bind News Corp. They could try to quash it at their next annual meeting. Nevertheless, this move puts Murdoch's reign in the spotlight. Previously, he's brushed off such votes—even when they garnered support from non-affiliated shareholders. But this time, it's different. Since Lachlan Murdoch took over as News Corp chairman, the company would have to convince shareholders that family control is still in their best interest without the founder's active involvement.

Curiosity piqued about how News Corp might respond? Same here! We'll have to wait and see if they try to exclude Starboard's proposal from the meeting agenda. In the past, companies have used the U.S. Securities and Exchange Commission (SEC) to halt these types of resolutions. They argue that they could lead to micromanagement or legal violations.

News Corp holds a respectable valuation of around $15.3 billion. Their portfolio is diverse, including a real estate listing business, book publisher Harper Collins and renowned newspapers like the Wall Street Journal, New York Post, Times, Sunday Times, The Sun and The Australian. Fox News, another media gem owned by Murdoch, operates separately under Fox Corp since the division in 2013.

Starboard has been making waves, urging News Corp to consider spinning off some assets to unlock shareholder value. One of their proposals involves separating the Wall Street Journal's parent company, Dow Jones, from the real estate division. Starboard claims this could add over $7 billion in value. Will News Corp listen? Time will tell.

Despite Starboard's calls for change, News Corp has been resistant. They recently reported better-than-expected revenue and profit, driven by their Dow Jones unit, real estate listings and book publishing. So maybe they don't feel the need to rock the boat just yet.

It's worth mentioning that Murdoch previously abandoned a proposal to merge News Corp with Fox Corp in the face of strong opposition from top shareholders. The merger needed majority approval, excluding Murdoch's interests. The plot thickens!

That's all the scoop we have for now. Stay tuned to see how this confrontation unfolds.

#activist