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Younger Murdoch May Get Key Post

Installing James, 30, as head of BSkyB signals his ascent in the News Corp. empire.

September 18, 2003|Sallie Hofmeister | Times Staff Writer

In an ascension that could spark a heated rivalry for the News Corp. throne, Rupert Murdoch's younger son, James, is poised to take the helm of British Sky Broadcasting, Britain's dominant pay TV provider and a jewel in the family's media conglomerate.

News Corp. declined to comment on potential management changes at BSkyB. But sources close to the situation said Wednesday that the BSkyB board could vote within two weeks to make the 30-year-old its next chief executive.

James is proving to be a rising challenger to his older brother Lachlan, 32. Both men have been working in the ranks for nearly a decade, being groomed to one day run the company built by their father.

Rupert anointed Lachlan several years ago as his heir apparent. But as James has successfully tackled important assignments, his father has given him more prominent tasks.

News Corp. owns the Fox broadcast network and cable channels, a movie studio, newspapers and satellite TV operations around the world, including a 35% stake in BSkyB that gives it board control.

James would replace Tony Ball, a News Corp. veteran and superstar executive in Britain. Subscribers have doubled since he took charge in 1999.

Naming James as head of BSkyB would put him at the top of a publicly traded company that is the centerpiece of News Corp.'s worldwide satellite operation. BSkyB also is seen as a template for DirecTV: News Corp. is awaiting regulatory approval to purchase the U.S. satellite leader.

"James is a star," said one News Corp. executive. Another described James as "impressive" because of his skillful turnaround of StarTV, the troubled Asian satellite service he has run since May 2000. Star turned its first profit last year.

James is also credited with building a beachhead in China even as another satellite competitor, AOL Time Warner Inc., bailed out. Through Star, James also established a powerful Hindi-language pay TV channel in India that now accounts for 48 of the country's top 50 programs.

While James moved with his wife to Hong Kong, 8,000 miles from his father and mentor, Lachlan stayed closer to home, in New York, where he serves as deputy chief operating officer of News Corp. His responsibilities include U.S. print operations including HarperCollins and the money-losing New York Post. Lachlan is also chief executive of News Ltd., the company's Australian operation, closely aligning him with the disastrous collapse of OneTel, the telecommunications company.

Ball's expected departure from BSkyB is a blow to News Corp. After orchestrating the successful expansion of the publicly traded satellite TV company, Ball came to be considered one of Europe's top executives. Friends say he plans to pursue an entrepreneurial venture.

A multimillionaire from his lucrative stock and pay package at BSkyB, Ball has celebrity status in Britain, where the heads of the two dominant television outlets -- the British Broadcasting Corp. and BSkyB -- are treated almost like royalty.

Prior to joining BSkyB, Ball, 47, served as head of News Corp.'s regional sports channels in Los Angeles. For months, he has been rumored as a candidate to run DirecTV. Sources say News Corp., however, could never meet the executive's steep demands.

Ball's friends say his wife, Gabriella, who is from Spain, also was not eager to move back to Los Angeles. Also, sources say, Ball, who is British, wanted to leave BSkyB on a high note. With nearly 7 million subscribers, the service could have trouble continuing to grow.

Continued expansion would require a careful investment of its cash in either programming in Britain or other pay TV services throughout Europe.

Investors worry that a huge acquisition could damage the stock. BSkyB's biggest rival in the region, Vivendi Universal's Canal Plus, Europe's largest satellite provider, has still not recovered from huge losses undertaken when it expanded beyond its home turf in France.

Speculation that James Murdoch was destined for the top BSkyB job was fueled within News Corp. this year when he was named to the board of the satellite concern.

Rumors that Ball would leave circulated in Europe in early August, after his sudden sale of a large chunk of stock after the company's upbeat quarterly results.

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