An ongoing court case that will determine future control of Rupert Murdoch’s media empire is weighing on the share price of his television and publishing company News Corp. (NWSA).
A trial being held in a Nevada probate court has been temporarily suspended as media organizations argue that the proceedings should be open to the public. Murdoch, age 93, is trying to change the terms of s family trust to ensure that his media companies remain under the control of his eldest son, Lachlan Murdoch, upon his death. Those media properties include Fox News and The Wall Street Journal.
In The Public Interest?
The court proceeding has been halted after several media organizations, led by Reuters (TRI), try to open the closed proceedings to the public. The news organizations have asked the Nevada Supreme Court to unseal all the documents in the Murdoch probate case and allow the media to report on the proceedings, findings, and ruling.
The state Supreme Court is allowing a hearing into the news organizations’ request and has given the Murdoch family 28 days to address the media’s arguments that the court documents should be unsealed, with sensitive information redacted, as it’s in the public interest to do so. The drama surrounding the Murdoch trial has led NWSA stock to decline 6% in the last month. The company’s shares currently trade at $26.49 each.
Family Drama
The trust in question was created in 1999 and gives Rupert Murdoch control over News Corp.’s voting shares. Upon his death, News Corp.’s voting shares will be transferred to his four oldest children – Prudence, Elisabeth, Lachlan and James.
Murdoch is reportedly concerned that the current set-up of the trust will lead to future battles amongst his children, particularly as all of them are political moderates. Only Lachlan Murdoch shares his father’s right-wing political ideology. In probate court, Murdoch is trying to amend the trust to pass sole control of News Corp. onto his son Lachlan. The family drama is generating media headlines worldwide.
Is NWSA Stock a Buy?
The stock of News Corp. currently has a consensus Strong Buy rating among three Wall Street analysts. The rating is based on three Buy recommendations made in the last three months. There are no Hold or Sell ratings on the stock currently. The average price target of $37 implies 39.65% upside potential from current levels.
