| LONDON/NEW YORK March 26
LONDON/NEW YORK March 26 Rupert Murdoch has
returned eldest son Lachlan to the leadership of his media
empire and promoted younger son James, setting them up to
succeed the 83-year-old tycoon.
Lachlan, 42, will become non-executive co-chairman of both
entertainment company 21st Century Fox and publishing
operation News Corp, sharing both roles with his
father. He rejoins the company after quitting as deputy chief
operating officer nearly 10 years ago amid friction with other
News Corp executives.
James, 41, will become Fox's co-chief operating officer
alongside longtime Murdoch stalwart Chase Carey, the latest step
in the younger son's comeback after he was forced to relinquish
some roles during a phone hacking scandal in Britain.
"I think it underlines the fact that it remains a family
dynasty in spite of being a listed company," media commentator
and former Murdoch editor Roy Greenslade said in a telephone
interview. "The two boys are being prepared to inherit."
Both sons have at various times been seen as the heir
apparent to their father, and it remains to be seen whether they
will be able to work together when Murdoch finally hands over
The Murdoch family controls both Fox and News Corp through a
trust that has a 38 percent ownership stake of Class B shares
with voting rights.
"If there is any surprise, perhaps it's bringing Lachlan
back into Fox," Evercore analyst Alan Gould said in a telephone
interview. "I would assume it does set up a little bit of a
bake-off as to who will ultimately succeed at Fox."
It was largely expected that Lachlan might return to the
newspaper and publishing arm of his father's empire - which
includes the Wall Street Journal, Australian newspaper and TV
assets, and book publisher HarperCollins - once News Corp split
into two separate businesses in 2013. Fox operates the movie
studios, TV and cable properties.
The announcement of Lachlan's return is a boost to Murdoch,
who has always said he would like his children to be involved in
the running of his sprawling media conglomerate.
"Lachlan is a strategic and talented executive with a rich
knowledge of our businesses," his father said in a statement.
"James has done an outstanding job driving our global
television businesses," Murdoch added.
"Our collective future has never been brighter."
The question of who will replace Murdoch has been a game
among media watchers who have seen his children jockey in and
out of position over the years.
Daughter Elisabeth, who like Lachlan and James is a child of
Murdoch's second marriage to Anna Murdoch Mann, founded and sold
her television business Shine Group to News Corp in 2011.
She was set to become a board director at the company in
2011 before the corporate split but decided not to pursue the
nomination following the furor over the hacking scandal.
Lachlan had been expected to succeed his father at the helm
of Murdoch's businesses but in 2005 suddenly stepped down from
his role as deputy chief operating officer of News Corp after
clashing with his father's executives in New York.
James had replaced Lachlan as the favourite to one day take
over from Murdoch when he became deputy chief operating officer
of the old News Corp in 2011.
But his reputation was damaged by the fallout from the
scandal at Britain's News of the World Sunday tabloid, where
some staffers hacked into voicemail messages for stories.
James, who had also been the head of the British newspaper
arm, eventually stepped down as chairman of British pay-TV
company BSkyB, where he built his career, saying he did
not want to act as a lightning rod for the wider hacking
All of Murdoch's four adult children including Prudence, his
only child from his first marriage, hold voting rights in the
trust. Murdoch's two young daughters from his marriage to Wendi
Deng, Grace and Chloe, hold shares in the trust but no voting
Murdoch and Deng divorced in 2013 after 14 years of
Fox said on Wednesday that Lachlan would split his time
between his home in Sydney and News Corp's offices in New York
and work with senior management to develop the businesses -
roles more commonly associated with an executive position
despite his new non-executive chairman title.
During his time away from the head office, Lachlan had
remained as a director at News Corp and Fox. He had also focused
on interests in Australia through his private investment company
Illyria Pty Ltd, which owns various media assets.
He also until recently served as non-executive chairman of
Australian TV network Ten Network Holdings, whose
shares are down 72 percent over the past three years.
In his new role, James will have direct responsibility for
Fox Networks Group, the firm's broadcast and cable channels
business in the United States, as well as strategic oversight of
Fox's businesses in Europe, Asia and the Middle East.
James will continue to report to Carey.
"As long as Chase Carey is still there and continues to run
the cable networks, that is critical," said Evercore's Gould,
adding that Carey is one of the best operating officers in the
Still, it remains to be seen if Carey will stay with the
company long-term, since his contract is up for renewal this
A Fox spokesman said in a statement that the company is in
the process of finalizing Carey's extended employment agreement.
"We are confident it will be completed shortly," he said.
Before Wednesday's promotion, James had been Fox`s deputy
chief operating officer, as well as chairman and CEO of its
"It is every investors' expectation that at some point one
of Rupert's kids will succeed him," Gould said.
(Additional reporting by Paul Sandle in London, Arnab Sen in
Bangalore and Lincoln Feast in Sydney; Editing by Joyjeet Das,
Christopher Cushing, Mark Potter and Jonathan Oatis)