Some shareholders resistant to Fox Corp/News Corp merger, claim reports

A key shareholder in Fox Corp and News Corp has reportedly expressed its doubts about the Murdoch family’s plans to reunite the two leading media firms. The reports started with the Wall Street Journal, which is part of the News Corp empire.

Lachlan Murdoch

According to insiders, Independent Franchise Partners, which controls sizeable stakes in both firms, told a special merger committee orchestrated by News Corp that it was skeptical about the ability of the merger to unlock the full value of both entities. Indeed, IFP also suggested a break up of News Corp should be considered.

IFP is not alone in questioning the merger, which is also opposed by Irenic Capital. Irenic is concerned about the soft ad market and a lawsuit involving News Corp.

The possibility of a merger was first mentioned in October 2022 and is believed to be driven by media mogul Rupert Murdoch and son Lachlan – whose family is the dominant shareholder across the two entities. Such an alliance would bring together assets including the Fox broadcast network, Fox News Channel, Fox Sports, TMZ, Harper Collins, the Dow Jones and various international newspaper holdings.

“We are always exploring opportunities to strengthen and grow our business, particularly at a time of such dynamic change in the media industry,” Lachlan Murdoch, a senior executive at both companies, told employees in a memo. “However, I want to emphasise that the special committee has not made any determination at this time, and there can be no certainty that any transaction will result from its evaluation.”

The current media market offers both positive and negative signals regarding the wisdom of a merger. Both Hasbro and Lionsgate are in the process of trying to divest or demerge divisions as a way to boost shareholder value. However the current structure of Walt Disney, Warner Bros Discovery and Paramount are all the result of mega-mergers that have taken place in recent years to drive scale.