LONDON / NEW YORK (Reuters) — Rupert
Murdoch has returned eldest son Lachlan to the leadership of his
media empire and promoted younger son James, paving the way for the
83-year-old tycoon to pass the reins to the family's next
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."
Each son has at various times been seen as heir apparent, and it is
unclear how well they will work together when Murdoch finally hands
over the companies.
The Murdoch family controls both Fox and News Corp through a trust that has a 38 percent ownership stake of Class B shares with
"If there is any surprise, perhaps it's bringing Lachlan back into
Fox," Evercore analyst Alan Gould said in a telephone interview,
referring to the movie studio and broadcaster split off last year
from the News Corp media holdings. "I would assume it does set up a
little bit of a bake-off as to who will ultimately succeed at Fox."
A source familiar with the companies said that the plan to elevate
Lachlan and James had been in the works for a while and that a
tussle over control would be unlikely.
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
James will have responsibility for Fox Networks Group, the U.S.
broadcast and cable channels business, and strategic oversight of
Fox's businesses in Europe, Asia and the Middle East. He will
continue to report to Carey, 60, who analyst Gould called one of the
best operating officers in the industry.
"As long as Chase Carey is still there and continues to run the
cable networks, that is critical," Gould said.
Still, it remains to be seen if Carey will stay with the company
long-term. His contract is up for renewal this June 30.
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.
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.
Guessing who will replace Murdoch has been a game among media
watchers as his children have jockeyed for 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, but in
2005 stepped down from his role as deputy chief operating officer of
News Corp after clashing with executives in New York.
In 2011, James replaced Lachlan as the favorite when he became
deputy chief operating officer of the old News Corp. But his
reputation suffered during 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 head of the British newspaper arm,
eventually stepped down as chairman of British pay-TV company BSkyB,
where he built his career. He said he did not want to act as a
lightning rod for the wider hacking scandal.
All Murdoch's four adult children including Prudence, his only child
from his first marriage, hold voting rights in the trust. Grace and
Chloe, two young daughters from Murdoch's marriage to Wendi Deng,
hold shares but no voting rights.
Murdoch and Deng divorced in 2013 after 14 years of marriage.
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. Those roles are 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.
Until recently, he also served as non-executive chairman of
Australian TV network Ten Network Holdings, whose shares are down 72
percent over the past three years.
Before Wednesday's promotion, James had been Fox`s deputy chief
operating officer, as well as chairman and CEO of its international
"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)