Rupert Murdoch has given up trying to reunite the two halves of his media empire.
Amid opposition from leading investors, the 91-year-old mogul and his son Lachlan briefed their respective Fox Corp boards of directors on Tuesday. and News Corp. that the family is withdrawing their previous request to consider a combination of the two companies. Such a merger would have brought Fox News and the Wall Street Journal under the same corporate umbrella.
A merger would also have cemented the power of Lachlan Murdoch, Fox’s current chief executive, as he would have run the merged company.
The Murdochs have not detailed their reasons for abandoning merger talks less than three months after they were initiated. A statement from the company said Rupert and Lachlan Murdoch “have determined that a combination is not optimal for News Corp and Fox shareholders at this time.”
Major investment firms, including T. Rowe Price and Independent Franchise Partners, were reportedly skeptical that a combined entity would increase shareholder value. For the Murdoch family, which owns about 39% of the voting shares but less than 15% of the economic value of the two companies, it has become increasingly difficult to get enough shareholders to approve the deal.
Another wrinkle appeared more recently. News Corp. Negotiations have begun to sell one of its valuable assets – its 80% stake in Move Inc., the operator of the successful website business Realtor.com, according to knowledgeable people who were not authorized to speak publicly. News Corp. wanted to focus on maximizing this potential multi-billion dollar deal, these people said. Late Tuesday, News Corp. confirmed the sales talks in a regulatory filing in Australia and said it was “in discussions with CoStar Group, Inc. regarding a potential sale of Move, Inc.”
Rupert Murdoch wanted to rebuild the company he had spent more than 50 years building.
A decade ago, investors successfully pressured Murdoch to wind up the company, arguing that its print publications, including dozens of newspapers in Murdoch’s native Australia, diminished the company’s value. The split comes after the UK cellphone hacking scandal at Murdoch-owned London tabloids, which tarnished the family’s reputation and resulted in hundreds of millions of dollars in legal costs, including payouts to victims.
Now it’s the television company that may face significant legal jeopardy. Dominion Voting Systems has filed a $1.6 billion defamation lawsuit against Fox Corp. filed alleging Fox News perpetuated former President Trump’s false claims about the “stolen” election to placate viewers alienated by the network’s early but ultimately accurate call that Biden had won Arizona and put him on the path to victory.
At a hearing last month, a Dominion attorney unveiled some of the statements made by Fox News anchors and executives in affidavits, in which they acknowledged their skepticism about claims made by Trump’s officials. The attorney quoted Fox News host Sean Hannity as saying under oath that he “didn’t believe it for a second.”
The Dominion case will go to court this spring.
Fox News has claimed that its coverage of allegations of voter fraud during the 2020 election, as claimed by Trump and his attorneys, is newsworthy and protected by the 1st Amendment.
Murdoch’s empire is smaller than it once was. In 2019, the mogul sold much of Fox’s entertainment holdings to Walt Disney Co. for $71 trillion. That left Fox Corp. with Fox News, Fox Business News, the Los Angeles-based Fox network, two cable sports channels, and streaming service Tubi. The publishing titles – including Dow Jones, the New York Post, the Times of London and the tabloid Sun – are housed in News Corp., which also has Australian TV facilities.
In the statement, the companies said their board committees dealing with the merger proposal have been dissolved.
Stephen Battaglio, a Times contributor, contributed to this report.