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Is James Murdoch the heir apparent at News Corp.?

James Murdoch, son of media mogul Rupert Murdoch, was named deputy chief operating officer and head of international operations, giving him a prominent role in the management of News Corp.'s media holdings.

March 31, 2011|By Dawn C. Chmielewski, Meg James and Joe Flint, Los Angeles Times
  • It has become accepted wisdom at News Corp. that bright and brash James Murdoch, 38, is the leading candidate to eventually become CEO.
It has become accepted wisdom at News Corp. that bright and brash James Murdoch,… (Rafiq Maqbool, Associated…)

Once seen as the rebellious son least likely to follow in his father's footsteps, James Murdoch now appears poised to one day run News Corp., the powerful media conglomerate that shapes entertainment, politics and culture around the world.

The 38-year-old son of media mogul Rupert Murdoch was elevated Wednesday to deputy chief operating officer and head of international operations, signaling the likelihood that he would be heir apparent to the News Corp. throne. He will play a prominent role in the management of News Corp.'s vast media holdings, which include the Wall Street Journal and the Times of London, Fox Broadcasting, the politically influential Fox News Channel, global satellite TV operations, the storied movie studio 20th Century Fox and social network Myspace.

For years, there has been intense speculation over who would succeed formidable patriarch Rupert Murdoch, who this month celebrated his 80th birthday. Murdoch's three adult children from his second marriage have all been viewed as contenders at one time or another. The situation was complicated when Murdoch left his second wife, Anna, in 1999 and quickly married Wendi Deng, an ambitious company executive who is 38 years his junior. That relationship produced two children, both under the age of 10, bringing to six the number of Murdoch heirs. He has another grown child from his first marriage.

Eldest son Lachlan, now 39, was originally the chosen one, declared in 1997 by his father to be "first among equals." That lasted only a few years. In 2005, Lachlan Murdoch left the company after bumping up against then-Chief Operating Officer Peter Chernin and Fox News Chairman Roger Ailes, who continues to wield tremendous clout in the company.

Lachlan Murdoch's departure cleared the way for the ascension of his younger brother. It has been the accepted Kremlinology within News Corp. that bright and brash James Murdoch had become the leading candidate to eventually assume the chief executive's mantle. He will relocate from London to New York this summer to assume his broader role and learn the company's U.S. operations from his boss Chase Carey, News Corp. chief operating officer.

While James Murdoch is being groomed for the top job, under one scenario Carey would be entrusted with the CEO position should the elder Murdoch decide to step back. Carey already handles the day-to-day operations of the company, which has annual revenue of nearly $33 billion.

A News Corp. spokeswoman declined to comment about Carey.

This is the second move this year by Murdoch to position his children to run the empire he built from a single Australian daily newspaper he inherited from his father in 1952. Last month, News Corp. said it was buying daughter Elisabeth Murdoch's London-based TV production company for nearly $700 million, a deal that some shareholders slammed as further proof of Murdoch nepotism.

The acquisition would return his entrepreneurial 42-year-old daughter to the corporate fold. She will join her two brothers, James and Lachlan, on the News Corp. board.

"We all assumed that this was going to be James' next step – to move to New York and oversee different parts of the company," said Michael Nathanson, media analyst with Nomura Securities.

An avid cyclist who started an office biking team, James Murdoch joined News Corp. in 1996 when the company bought a majority interest in his hip-hop record label, Rawkus Records, which he left Harvard University to run. As chairman and chief executive of operations in Europe and Asia, he already is responsible for a large and growing part of the media giant's business. Murdoch's elevation also represents a generational shift from an octogenarian steeped in the world of newspapers to one who grew up in the digital age.

"James has demonstrated in an array of roles that he is a shrewd and decisive operator who can deftly navigate complex issues to transform businesses," Carey said in a statement. "He has equally shown a unique understanding of the emerging technologies and the digital forces that are reshaping our industry."

James Murdoch has expanded the company's television business in the U.K., and been instrumental in its $12-billion bid to take full control of British Sky Broadcasting, the region's largest pay TV operator, which will further diversify the company's revenue base and make it less dependent on newspapers.

The company credits Murdoch with expanding its TV portfolio in Turkey, Germany and the Middle East, and revitalizing the company's money-losing Asian television group Star, which is now delivering a profit.

Jim Gianopulos, co-chairman of Los Angeles based Fox Filmed Entertainment, said James Murdoch has proven his mettle. "His stewardship of BSkyB has led it to new heights, and his leadership of Star TV gave him enormous experience in the fastest growing markets on the planet," Gianopulos said.

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