Frank Gaffney picks up on a securities transaction that is raising alarm bells among conservatives, in Front Page Magazine. Saudi  Prince Al—Waleed bin Talal has purchased a 5.46% share in the voting equity of the parent of Fox News, News Corporation.

Given the nature of the Saudi regime and the Prince's previous public statements, there is cause for concern. News Corporation is currently controlled by the Murdoch clan, but a challenge to its control ios feasible, given the holdings of John Malone's Liberty Media. A bloc of shares like the Prince's could swing control, putting him in a position of decisive influence.

I took the trouble of looking up the SEC filing (Schedule 13D) required when a large bloc of shares changes hands. Two interesting items emerge:

1) The Prince exchanged a bloc of Class A shares for a bloc of Class B shares. He (actually some holding companies he controls) already owned a large bloc of shares with lesser voting power. (On multiple classes of shares with different voting rights, see Ed Lasky's article discussing control of the New York Times Company.) 

2) The disclosure contains the following intriguing language:

HRH has stated 'Last November I said that I had the utmost confidence in Mr. Murdoch, his management team and his succession planning, and that if necessary, the Kingdom companies would replace their non—voting shares with voting shares and potentially purchase additional shares in support of Mr. Murdoch and his plans. The Kingdom companies now own a significant interest in News Corporation voting shares...and may purchase more if the situation warrants.'

In other words, it appears as though the Prince is in Rupert's corner. The question now is whether or not the transaction is a two—way street.

Hat tip: Dennis Sevakis

Thomas Lifson   9 30 05