The Murdoch Fortress: Why Jeff Smith’s Activist Campaign at News Corp Is a Battle for Control—and Value

In the high-stakes world of corporate activism, few campaigns have been as emblematic of the clash between entrenched power and shareholder value as Jeff Smith’s ongoing battle with News Corporation (NWS). Since Starboard Value unveiled its position in October 2023, the media giant has become a focal point for debates over governance, asset allocation, and the limits of activist influence. With the stock soaring 38.12% through April 2025—more than double the S&P 500’s gains—investors must ask: Is Smith’s campaign a catalyst for value creation, or a futile struggle against the Murdoch dynasty’s iron grip?

The Activist Playbook: Dissolution or Divestiture?
Starboard’s strategy hinges on two radical moves: dismantling News Corp’s dual-class share structure and spinning off its high-growth digital assets, such as the $20 billion REA Group stake. The dual-class system, which grants the Murdoch family 40% of voting power despite owning less than 15% of economic equity, has long been a thorn in the side of minority shareholders. Smith argues that this setup stifles strategic flexibility, leaving assets like REA Group trapped in a conglomerate structure that underperforms their standalone potential.

While NWS’s stock has risen sharply since Starboard’s intervention, the Murdoch family has steadfastly resisted structural changes. At the 2024 shareholder meeting, proposals to dilute their control were rejected by a margin of 67% to 33%, underscoring the board’s entrenched loyalty. News Corp’s management, meanwhile, defends the status quo, citing operational stability and the “synergies” of its media conglomerate model.

The Paradox of Performance
The stock’s robust gains raise a critical question: If Starboard’s demands have been rejected, what is driving NWS’s outperformance? Analysts point to two factors. First, the mere threat of activism has likely forced News Corp to accelerate asset optimization. For instance, the company’s 2024 decision to spin off its education division, Amplify, into a standalone entity—a move not directly tied to Starboard’s demands—delivered a 12% stock bump upon announcement. Second, macroeconomic tailwinds in media and real estate have buoyed REA Group’s valuation, indirectly boosting News Corp’s equity stake.

Yet Starboard’s broader portfolio tells a cautionary tale. Despite NWS’s gains, the fund’s flagship hedge fund returned under 5% in 2024—lagging behind peers’ 11.5% average. This suggests that while the News Corp campaign has been a high-profile endeavor, it may not yet be a financial triumph for Starboard itself.

The Structural Elephant in the Room
The crux of the conflict lies in governance. Dual-class structures, while common in media empires, are increasingly under fire from ESG-focused investors and institutional shareholders. A 2025 survey by Institutional Shareholder Services found that 62% of large fund managers view such setups as incompatible with long-term value creation. Yet News Corp’s governance remains a relic of an era when family control was nonnegotiable.

Smith’s argument—that REA Group’s separation could unlock $20+ billion in shareholder value—has yet to materialize. However, the mere visibility of the campaign has drawn attention to News Corp’s underappreciated assets. For instance, its 90% ownership of Dow Jones, valued at over $3 billion, operates in a premium news space with limited competition. Meanwhile, its book publishing divisions (HarperCollins, etc.) hold enduring cultural capital.

Conclusion: A Draw in the Boardroom, but a Win for the Street?
Jeff Smith’s campaign at News Corp epitomizes the paradox of modern activism: even failed efforts can catalyze value. While Starboard’s governance demands have been rebuffed, the stock’s 38.12% return since October 2023—versus the S&P’s 19.74%—suggests the market is rewarding the company’s incremental reforms. The Murdoch family’s refusal to budge also highlights a broader truth: activists targeting firms with concentrated control face an uphill battle.

For investors, the takeaway is twofold. First, News Corp’s portfolio of “boring but valuable” assets—real estate tech, financial news, and book publishing—offers defensive resilience in volatile markets. Second, the stock’s outperformance underscores that even symbolic victories (e.g., accelerated spinoffs, cost discipline) can pay dividends.

Yet the campaign’s unresolved tension remains. As Starboard pivots toward AI stocks—a sector where governance isn’t a barrier—News Corp’s saga serves as a reminder: in media empires, family legacy often trumps financial logic. For now, shareholders must decide whether to bet on the Murdochs’ vision or wait for the activist storm to reshape it. The jury is still out, but the stock’s ascent shows the market is willing to give both sides time to prove their case.