Starboard Says Dual-Class Structure Hurts News Corp's Valuation, Calls For Elimination

News Corporation NWS disclosed that its largest shareholder, Starboard Value LP, believes dual-class share structures are not in the best interests of shareholders and do not reflect best-in-class corporate governance practices.

Starboard stated that extending super-voting rights to a founder’s heirs is unjustifiable. News Corp’s dual-class share structure, which transfers voting power from a founder to their children, exemplifies its worst aspects.

The Murdoch siblings’ differing views could hinder strategic direction, and it’s unclear why their perspectives should outweigh those of other shareholders.

They further added, “This is clearly not the appropriate governance structure for a public company, and we believe it has exacerbated News Corp’s valuation discount relative to its inherent value.”

News Corp confirmed a stockholder had submitted a non-binding proposal for the 2024 Annual Meeting to eliminate the company’s dual-class capital structure through a recapitalization plan.

However, the Board said that “the Company’s dual-class capital structure promotes stability and has facilitated the successful implementation of News Corp’s transformational strategy and long-term outperformance for all News Corp stockholders.”

“The Company has thrived under the current structure and guidance of the Board and senior leadership despite major changes in consumer behavior amidst the digital revolution of the last decade.”

Price Action: NWS shares are down 0.69% at $27.45 at the last check Tuesday.

Photo via Shutterstock

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