Markets took the news of Rupert Murdoch’s decision to step down as chairman of News Corp (NASDAQ:NWS) and Fox Corporation in their stride Thursday, with shares of the publisher of titles, including The Wall Street Journal, Dow Jones and the UK’s Sun and The Times newspapers, edging higher.
Fox’s shares also rose.
In a letter to colleagues, the 92-year-old wrote that it was time for him to take on different roles following a career spanning seven decades.
The news comes after Murdoch scrapped plans earlier this year to reunite News Corp (NASDAQ:NWS) and Fox.
His son Lachlan Murdoch, groomed for the role, will take over as chairman of New Corp while maintaining his role as chief executive of Fox. Murdoch Senior will become chairman emeritus of both organizations.
“Undoubtedly he will still be involved and not want to remove himself entirely given the media empire he has created. It is always hard to let go, even though we are not getting any younger,” commented Paolo Pescatore, media analyst at PP Foresight.
“He’s had a significant impact, one that cannot be underestimated from content creation, delivery and the way users access media across connected devices."
In his new role, Lachlan Murdoch’s first job will be to manage the transition as smoothly and seamlessly as possible to ensure no instability, Pescatore noted.
“It is too early to say what the future holds and unclear what direction the company will take under Lachlan’s stewardship," he added. "In the short term there should not be any drastic changes given he has been heavily involved for some time. However, he will want to cement his own position and create his own legacy.”
While markets were not rattled by the news, political pundits will be taking note due to his long-standing support for the Republican Party as the presidential race heats up ahead of the 2024 elections in the US.
In May, Fox Corporation and Fox News agreed to pay Dominion Voting Systems US$787.5 million to settle a US$1.6 billion defamation lawsuit after Fox News aired false claims that Denver-based Dominion's ballot-counting machines were used to manipulate the 2020 US election in favour of Joe Biden.
News Corp (NASDAQ:NWS) stock traded 1.8% up at $20.02 by noon in New York. Fox was 2.4% up at $29.43.
Contact the author at stephen.gunnion@proactiveinvestors.com