NewsCorp shareholders make another bid to democratize the Murdoch family empire

The traditional shareholder revolt at NewsCorp (owner of Fox, Fox News, Sky, Harper Collins, the NY Post, the Wall Street Journal, the Sun) is back for another run, and this time it's gathering steam and may indeed make it. Rupert Murdoch and his family own a minority of the shares in NewsCorp, but their shares are in a special class of voting stock that means that they effectively get to do whatever they want with the majority investors' money. Effectively, Murdoch's initial pitch to investors was, "I'll take your money, but I'm not interested in your advice -- just cough up, shut up, and let me run this thing and I'll pay you some fat dividends."

But it's all gone rather wrong. Murdoch's ideological projects and nepotism have cost the business millions -- between a sweetheart deal that saw the company buying his daughter Elisabeth's startup Shine for £413M of the shareholders' money, and his son James's presiding over a phone-hacking scandal that destroyed News of the World, the bestselling newspaper (sic) in Britain, the investors are getting a bit tired of Murdoch running NewsCorp like his own personal fiefdom. It's one thing to play Colonel Kurtz in the jungle when it's making the shareholders rich, but when you start frittering away titanic assets like the NotW because you need to give your idiot son a job, well, that's another story.

As I said, this isn't the first time the shareholders have taken a swing at Rupert and his spawn, but this is a bigger, more multi-pronged, and better coordinated approach that any to date. Fingers crossed.

Dissident shareholders are pressing once more for the media mogul Rupert Murdoch to step down as chairman of News Corporation.

Shareholders from the US, UK and Canada filed a resolution on Tuesday, calling for News Corp to appoint an independent chairman. A similar resolution attracted strong support at the media company's annual shareholder meeting last year.

The proposal was introduced by Christian Brothers Investment Services (CBIS), which manages $4.6bn for Catholic institutions worldwide. It is backed by the UK's Local Authority Pension Fund Forum, with assets of £115bn ($178.9bn), and British Columbia Investment Management Corporation, one of Canada's largest institutional investors.

In a separate resolution, Nathan Cummings Foundation, an ethical investment group, has called on News Corp to end the dual-class share structure that allows the Murdoch family to control its media empire despite owning a minority of shares.

Rupert Murdoch must step down as News Corporation chair – shareholders [Dominic Rushe/The Guardian]


  1. It hurts so bad that a company that produces the sheer beauty of FOX Soccer Channel also grimes up so many other things. (It’s like if ESPN was also connected to an evil empire of some kind.)

          1. an a-ha moment for me, thanks. (I guess I just thought that when they coded this site they left an open tag for all eternity

            Boing Boing

  2. Where to start?  Wow.

    (1) About time
    (2) Am I surprised the CBIS is in NewsCorp?
    (3) What’s the affiliation, if any, between UK LAPFF and CBIS?
    (4) Can the subsidiary-class shareholders muster enough to outmanoeuvre Murdoch?
    (5) £413m.

    I want to be a media baron too.  I’ve got 10 twitter followers and counting.

  3. As much as I’d like to see everyone’s least favorite loathsome Australian Liche pushed from his throne, I’m under-impressed by these now-whining investors.

    So, they purchased the stock(knowing about the…irregular… arrangement of voting shares, and the fact that Murdoch is a vile sleazoid, if not necessarily the full extent of his overt criminality), presumably because they liked the returns; but now that Murdoch isn’t bringing in the cash, they are oh so morally concerned about these failures of governance and ethical lapses.

    The Christian Brothers Investment Services (CBIS), especially(What Portfolio would Jesus’ moneychangers hold?), seem unimpressive in context.  Was a period of good returns really all the payoff it takes to get their money behind whatever Murdoch chooses to do? Apparently so, so long as it’s profitable.

    At least the overtly lawful-evil investment funds are internally consistent.

    1. This is not unheard of for newspapers, I think the NYT and others are run this way. You get the advantages of a publicly traded company, but also get to keep control. Google is another example of this.

  4. As far as I know, if you take non-voting stock you get non-voting stock.  This is one of the issues which might cause us to rethink allowing non-voting stock, but unless  we completely overturn non-voting stock, we can’t really pick on it in this one instance.

    1.  …why not?  I never took any non-voting stock and so I am not seeing any problem with criticizing those who have.

      1.  Oh, yeah, criticizing the ones who took the stock, as long as they were competent investors, absolutely.  To me, having stock that doesn’t allow you voting control seems to defeat the entire purpose of having stock to begin with.

  5. In other news, that bastion of right wing propaganda, the BBC, reports that Newscorp  has reported better than expected results, making over $2.85b income in first three months of the year, including a 17% increase in TV revenue.

    You might not like his politics (you’re free not to buy stuff off him if you do) – but it seems something of a stretch to claim “its all gone rather wrong”

    1. The financial statements are where it’s at.  You can play them to a degree, and it can be hard to decipher, but they’re designed to give as much transparency as the rules require.
      No much time to do this, but for the reported quarter
      Net income $2.85 bn, vs £0.9bn for year on year
      of which $2.43bn attributable to strategic purchases (inorganic growth – stakes in Sky Germany and Sky New Zealand)

      Like I say, not much time, but immediate impression:  core net income collapsed, hidden by net income from purchasing stakes.  More to it, but those acquisitions have really bumped up the revenue numbers.

      Publishing business is up the creek without a paddle.  Serious trouble there.

      If you can fool shareholders by blinding them with complex deals to mask under-performance, you can fend off shareholder resolutions that aim to alter the company structure.

  6. James Murdoch might not be an idiot, there’s always the possibility that he DID know about the phone hacking at the NotW, in which case he is a lying scumbag.

  7. Meh. Shareholders, schmareholders. I’m thinking Predator drone + Hellfire missile is the only way to be sure

  8. Meh. Shareholders, schmareholders. I’m thinking Predator drone + Hellfire missile is the only way to be sure

  9. It’s democratizing in a steep poll tax sort of way. I’m not convinced I’ll be able to see any difference.

  10. See? This is what happens when you let investors get involved in Art. Pretty soon, the pure & pitch-perfect satirical performance art of FOX news might soon be tempered by stiff-suited investors who just don’t “get it”

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