Starboard challenges News Corp"s dual-class structure valuation impact

Starboard Value LP, the largest shareholder of News Corp, has expressed concerns regarding the company's dual-class share structure, arguing that it undermines shareholder interests and does not align with best corporate governance practices. They criticized the practice of extending super-voting rights to the heirs of the founder, stating that it is unjustifiable and could lead to conflicts, particularly among the Murdoch siblings, which may impede strategic decision-making. Starboard believes that this governance model has contributed to a valuation discount for News Corp compared to its true worth. In response to these concerns, a stockholder has proposed a non-binding resolution for the 2024 Annual Meeting aimed at eliminating the dual-class structure through a recapitalization plan. However, News Corp's Board has defended the existing structure, asserting that it has provided stability and has been instrumental in executing the company's transformational strategy, which has led to long-term success for shareholders. The Board emphasized that the dual-class structure has allowed the company to navigate significant changes in consumer behavior during the digital revolution over the past decade. They argue that the governance model has facilitated effective leadership and strategic direction, despite the challenges faced in the evolving media landscape. As of the latest market update, News Corp's shares have seen a slight decline, reflecting ongoing investor concerns about the company's governance and valuation. The debate over the dual-class structure continues to be a focal point for shareholders as they weigh the implications for the company's future performance.