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Rupert Murdoch Expected to Hand Reins of 21st Century Fox to Son James Rupert Murdoch Expected to Hand Reins of 21st Century Fox to Son James
(about 2 hours later)
Rupert Murdoch, the 84-year-old chief executive of 21st Century Fox, is planning to hand over the reins of the media conglomerate to his son James, two people briefed on the plans said on Thursday. Rupert Murdoch is planning to hand over the reins of the media conglomerate 21st Century Fox to his son James, multiple people briefed on the plans said on Thursday.
James Murdoch is expected to take over as chief executive, and the elder Mr. Murdoch will remain at the company as executive chairman. Another son, Lachlan, is moving from Australia to Los Angeles to become co-executive chairman, the people, who spoke on condition of anonymity, said. James Murdoch is expected to take over as chief executive, and his 84-year-old father will remain at the company as executive chairman. Another son, Lachlan, is moving from Australia to Los Angeles to become co-executive chairman, said the people, who spoke on condition of anonymity.
The exact timing for the changes is unclear, but it is said to be part of Mr. Murdoch’s long-term succession planning with the board. The changes are expected to be discussed at a board meeting next week, one person said.The exact timing for the changes is unclear, but it is said to be part of Mr. Murdoch’s long-term succession planning with the board. The changes are expected to be discussed at a board meeting next week, one person said.
As part of the reorganization, Chase Carey will step down from his role as chief operating officer at Fox and work as an adviser to the company. Mr. Carey, widely respected on Wall Street, is said to have played an integral role in the succession plans and has built flexibility into his contract with Fox to ease the transition, one person said. The elder Mr. Murdoch is expected to continue to provide broad strategic oversight for the company and come into the office regularly, one person said. He is not ill, and he still appears to be energized, this person added. The Murdoch family trust controls almost 40 percent of the voting shares of both 21st Century Fox and News Corporation, and Rupert Murdoch has more rights in the trust than his children.
“The matter of succession is on the agenda at our upcoming, regularly scheduled board meeting,” Nathaniel Brown, a Fox spokesman, said in a statement. As part of the reorganization, Chase Carey will step down from his role as chief operating officer at Fox and work as an adviser to the company. Mr. Carey, who has worked as the second-highest executive at Fox since 2009 and is widely respected on Wall Street, played an integral role in the succession plans, one person said. To ease the transition, he built flexibility into his contract with Fox last year when he agreed to a two-year contract extension through June 30, 2016.
The appointment to chief executive reflects a remarkable recovery for James Murdoch, 42, who was battered by the phone hacking scandal that engulfed the company while he oversaw the British businesses. Along with his father, he was called before Parliament to answer grueling questions and discuss embarrassing emails related to the hacking. James soon departed London for New York in an effort, those close to him said, to distance himself from the fallout and rebuild his reputation. People with knowledge of the family say that James and Lachlan Murdoch have a good relationship. But while the move appears to signal that James will take control of the company, one person knowledgeable about the family dynamics, who spoke on condition of anonymity, said the announcement had not completely clarified the situation. The person said that tension could still arise over which of them would truly succeed their father, and even perhaps which will end up at 21st Century Fox, a lucrative business, and which at News Corporation, which faces the same powerful headwinds as other traditional journalism companies.
The elder Mr. Murdoch put the succession plan in place in March 2014 when he named the two sons to senior positions in his companies. James was appointed co-chief operating officer at 21st Century Fox, and Lachlan, 43, became nonexecutive co-chairman of News Corporation and 21st Century Fox, returning to his father’s side after a nine-year absence. Thursday’s developments do not directly concern News Corp., the other half of the Murdoch empire, which owns The Wall Street Journal and a portfolio of British newspapers. The two companies separated in 2013. But the elevation of James Murdoch, 42, will most likely raise concerns that when his father finally steps aside completely, the print businesses may come under more skeptical scrutiny.
The new development first was reported by CNBC. The moves, first reported on Thursday by CNBC, were largely expected on Wall Street, and some analysts called James Murdoch an experienced executive who has vision for where the fast-changing world of media is headed. “James didn’t just graduate from high school,” said David Bank, a media analyst at RBC Capital Markets. “He is a pretty seasoned global media executive. His strength comes out in exactly the environment we face today and exactly the changes that we face in the ecosystem.”
The elder Mr. Murdoch is expected to continue to provide broad strategic oversight for the company and come into the office regularly, one person said. He is not ill, and he still appears to be energized, this person added. No imminent changes are expected at Fox News, which is a big revenue driver and whose chief, Roger Ailes, has in the past conflicted with Lachlan Murdoch. Mr. Ailes, president of Fox News, will continue to report to Rupert Murdoch, one person briefed on the plans said.
The succession plans for Mr. Murdoch’s media empire have long been the subject of fevered speculation, with Lachlan Murdoch, James Murdoch and their sister Elisabeth considered by various people at various moments as the leading choice. The company, for its part, said it had nothing to announce. “The matter of succession is on the agenda at our upcoming, regularly scheduled board meeting,” Nathaniel Brown, a Fox spokesman, said in a statement.
The moves were the latest in a series of incremental steps by Mr. Murdoch to ensure that his companies — publicly traded, with a combined market capitalization of nearly $80 billion — are handed over to his children. It was a prospect that seemed remote, if not impossible, a few years ago, when James had been tainted by the phone hacking scandal that engulfed the company while he oversaw the British businesses, and Lachlan showed little interest in returning permanently from his native Australia to the corporate boardrooms of Britain and the United States.
James, in particular, seemed to have a difficult path to the top ranks of the company after being battered throughout the hacking crisis that erupted in 2011. Along with his father, he was called before Parliament to answer grueling questions and discuss embarrassing emails related to the scandal. James soon departed London for New York in an effort, those close to him said, to distance himself from the fallout and rebuild his reputation.
The succession saga has played out in glossy magazines, books and British tabloids, partly because of intrigue surrounding Mr. Murdoch’s second wife, Wendi Deng, who at times was a source of tension between the father and his adult children. Mr. Murdoch completed his divorce from Ms. Deng in 2013, removing another obstacle to a neat succession.
Lachlan Murdoch decided in 2005 to leave his position as chief operating officer of News Corp., which at the time encompassed all of Rupert Murdoch’s holdings, after clashes with other executives. It was viewed, perhaps by all but his father, as a rejection of the leadership role for which he was being groomed.
But the elder Mr. Murdoch had worked over the years to bring Lachlan back to the businesses, two people with knowledge of the matter said. Last year the elder Mr. Murdoch named him nonexecutive co-chairman of News Corp. and 21st Century Fox, while elevating James to co-chief operating officer of 21st Century Fox.
James Murdoch, long seen as the most likely heir to his father, dropped out of Harvard in 1995 to start an independent music label, Rawkus Records. He subsequently moved to the family business and was widely praised for turning British Sky Broadcasting, the satellite television company, into a broader communications company.
Some raised eyebrows when, in his 30s, he was elevated to run News Corp.’s international businesses. And their misgivings seemed justified when he became embroiled in the hacking scandal.
He appreciated his brother’s support during that scandal, two people with knowledge of their relationship said, speaking on condition of anonymity, and had encouraged Lachlan to return to the fold.
James Murdoch has long been focused on assets other than the print holdings that his father holds so dear. He encouraged Rupert Murdoch to take a small stake in Vice, a company that has grown dominant in online video. And he was often seen on 21st Century Fox’s Century City lot in California.
Rupert and James Murdoch will be based in New York. Lachlan Murdoch will be based in Los Angeles.Rupert and James Murdoch will be based in New York. Lachlan Murdoch will be based in Los Angeles.