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Lachlan Murdoch faced down a shareholder vote on Wednesday aimed at weakening the Murdoch family’s control over their media empire.
The activist investor Starboard Value had challenged the ownership structure of News Corp, the parent company of dozens of news outlets globally including the Wall Street Journal and publisher HarperCollins in the US, and the Times and the Sun in the UK.
At the company’s annual meeting, the company announced the proposal had been defeated.
The Murdoch family controls 41% of company votes, despite having a 14% stake in the company. The family shares are currently held in a trust controlled by Rupert Murdoch, 93. Control of the trust is expected to be passed on to his four adult children upon his death.
Even if the proposal had passed, the company’s board could have chosen not to take it up. But the proposal sends “a clear and direct message” to the board about concerns over the company’s voting structure, said Jeffrey Smith, Starboard’s chief executive, in a letter to shareholders earlier this year.
“We are not sure why their perspectives should carry greater weight than the views of other shareholders,” Smith wrote in his letter. Smith’s hedge fund, Starboard Value, is a major shareholder of News Corp, with 3.7% of non-voting shares of the company and 4.6% of voting shares.
Other major hedge funds and advisory firms had supported the proposal and argued that News Corp should have a “one share, one vote” capital structure that would dramatically reduce the power the Murdoch family has over the company.
“Multi-class capital structure with unequal voting rights create a misalignment between economic interest and voting rights, which can disenfranchise shareholders holding stock with inferior voting rights,” said advisory firm Institutional Shareholder Services, another News Corp shareholder, in a statement supporting the proposal.
A similar vote took place in 2015, and though 90% of non-Murdoch shareholders agreed to the proposal, it was equivalent to 49.5% of the total vote, because of Murdoch’s power.
In September, News Corp said in a statement that it “believes 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”.
Murdoch is currently battling three of his adult children in a Nevada court over who will control his assets after his death.
Murdoch is trying ensure that his oldest son, Lachlan, has complete control over the media company’s assets. The move is being contested by Murdoch’s three other adult children, Prudence, James and Elisabeth.
The proceedings are happening out of the public eye, despite multiple news outlets arguing for access to the trial.
Lachlan succeeded his father as chair of News Corp and executive chair and CEO of Fox News after his father’s retirement in 2023.
Lachlan is known to be more politically aligned with his father, who has proffered conservative news and opinions around the world. While Lachlan has not publicly spoken about his political views, reports suggest that he is less interested than his father in political influence and more interested in company profit.
In contrast, Lachlan’s adult siblings have expressed reservations about the company’s direction, especially after the first election of Donald Trump in 2016. Though Rupert has wavered in his own support of Trump over the years, it is undeniable that Trump has been a boon for the Murdochs, particularly for Fox News; Fox brought in 10 million viewers on election night, the network announced. It is consistently the most-watched news channel in the US.
Meanwhile, Trump has found some of his biggest and most influential supporters on the network. Two of Trump’s new cabinet picks come from the cable news channel: Pete Hegseth, a weekend cohost of Fox & Friends, was announced as Trump’s pick for defense secretary, with Sean Duffy, a host on Fox Business, as secretary of commerce.
