News Corp., owner of Fox Broadcasting, reduced the voting power of non-U.S. shareholders to comply with the country’s law governing broadcast station licenses.
The company suspended the voting rights of 50 percent of the Class B shares held by investors who aren’t U.S. citizens, according to a statement today. The change will last “as long as the company deems it necessary to maintain compliance with U.S. law,” News Corp. said.
Chairman and Chief Executive Officer Rupert Murdoch, who controls about 40 percent of voting shares through his family’s trust, agreed to not vote with respect to a portion of his shares during the suspension. Murdoch became a naturalized U.S. citizen in 1985 when he was buying Metromedia Inc.’s television stations, laying the foundation for the Fox network.
“This action secures the critical assets of News Corporation’s valuable television segment,” the New York-based company said in its statement.
The Communications Act of 1934 bars broadcasters from having more than 25 percent foreign ownership. News Corp., which owns 27 broadcasting stations, said it determined that non-U.S. stockholders own 36 percent of the Class B shares. Saudi Prince Alwaleed bin Talal is the largest owner of voting shares after Murdoch, with about 7 percent.
Broadcast television accounts for 14 percent of News Corp.’s annual sales, bringing in $4.78 billion in revenue in the fiscal year ended June 30, and $681 million in operating income, according to the company.
Neil Grace, a spokesman for the Federal Communications Commission, declined to comment.
News Corp.’s Class A non-voting shares fell less than 1 percent to $19.27 at the close in New York. The shares have advanced 8 percent this year.