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News Corp should separate its digital real estate group, a move that will significantly boost the rest of the company's value, Starboard Value's CEO said Tuesday. 

Why it matters: Starboard is publicly calling out News Corp's leadership and what it sees as leadership's failure to generate value from the Murdoch family's flagship media company. 

Details: Starboard is recommending that News Corp separate its digital real estate business, which includes a stake in Australian online property firm REA Group, plus Realtor.com parent Move Inc.

News Corp's overall market value is more than $12 billion. Starboard CEO Jeff Smith pointed out that News Corp's stake in REA alone is worth $8 billion.

"We don't believe that News Corp is receiving full credit for this value, or, is not receiving credit for the rest of News Corp," Smith said at the annual 13D Monitor Active-Passive Investor Summit in New York.

Smith estimates that taking out the real estate business, the rest of News Corp's business portfolio is worth around $4 billion.

Catch up quick: News Corp has already made moves aligned with Starboard's campaign. It was in talks to sell Realtor.com parent company Move Inc. to CoStar Group. for more than $3 billion earlier this year.

That effort coincided with Rupert Murdoch's plan to combine News Corp and Fox Corp last year. Activist investor Irenic Capital, which had acquired around 2% of News Corp shares, publicly opposed the merger and, like Starboard is doing now, demanded the company spin off its real estate business instead.

News Corp abandoned the merger plan but the Move Inc. sale process fizzled out.

Zoom in: Smith did not detail the size of his fund's stake in News Corp.

In a presentation to a room full of investors and corporate advisers, Smith said that Dow Jones' valuation compared to the New York Times was completely out of whack.

"Dow Jones is a highly valuable business," he said.

What they're saying: "We have always maintained an active and engaged dialogue with our investors and are committed to driving shareholder value," a News Corp spokesman tells Axios. "We remain focused on executing our strategic plan, which has helped us set records in profitability over the past three years."

What we're watching: Whether Starboard is pushing on an open door or the two sides are squaring up for a fight.

Editor's note: The story was updated to reflect News Corp's statement. 

Starboard pushes News Corp to separate digital real estate group

"Dow Jones is a highly valuable business," CEO Jeff Smith says.

Starboard Value CEO Jeff Smith. Photo: Christopher Goodney/Bloomberg via Getty Images

Activist shareholders

News Corp should separate its digital real estate group, a move that will significantly boost the rest of the company&#x27;s value, Starboard Value&#x27;s CEO said Tuesday. Why it matters: Starboard is <a class="gtmContentClick" data-vars-link-text="publicly calling out" data-vars-click-url="https://www.axios.com/pro/media-deals/2023/10/16/starboard-news-corp-murdoch" data-vars-content-id="a8b3c82d-3779-454b-ac45-b344e3340966" data-vars-headline="Starboard pushes News Corp to separate digital real estate group" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/media-deals/2023/10/16/starboard-news-corp-murdoch" target="_self">publicly calling out</a> News Corp&#x27;s leadership and what it sees as leadership&#x27;s failure to generate value from the Murdoch family&#x27;s flagship media company.

Starboard pushes News Corp to separate digital real estate group

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