Media tycoon Rupert Murdoch cedes some power to his sons
Rupert Murdoch reportedly is ceding some of his power over the media conglomerate that he has spent decades building to his sons James and Lachlan, in an apparent effort to avoid a battle over succession.
The 84-year-old Australian-born media tycoon will give up the title of CEO of 21st Century Fox (FOX) to James Murdoch, CNBC's David Faber first reported, citing unnamed sources. Fox Business Channel, the New York Times and Bloomberg later reported the news. Lachlan, 43, will assume the title of co-executive chairman, the reports say. The timing of the transition wasn't clear, according to Faber.
When asked by CBS MoneyWatch about the reports, a 21st Century Fox spokesman only would say, "The matter of succession is on the agenda at our upcoming, regularly scheduled board meeting."
The elder Murdoch will reportedly retain the title of executive chairman of Fox. Chief Operating Officer Chase Carey, who is well-respected on Wall Street, will stay at the company in a yet-to-be-defined role, according to Faber. He said James Murdoch, 42, will run the company's operations on a day-to-day basis while Lachlan Murdoch will focus on strategic issues. Fox News Chairman Roger Ailes will continue to report to Rupert Murdoch, according to Fox Business.
"While Carey has been a respected leader for some time, we sense investors are getting more comfortable with James Murdoch, who has led Fox's Star Asia and former BSkyB operations," wrote Tim Nollen, an analyst with Macquarie Capital, who rated the company's shares as "outperform." "While some may grumble about power consolidating in the Murdoch family, we also think this change at the top has been pre-ordained for a long time."
The Murdoch brothers have endured their share of challenges in recent years. James Murdoch and his father, for instance, were grilled by the U.K. Parliament about the role their newspapers played in the phone hacking scandal that led the family to shut down the tabloid The News of the World. Lachlan Murdoch was seen as the heir-apparent to Rupert before they had a falling out and he resigned from News Corp. in 2005. He moved back to Australia. Father and son have apparently made amends and Lachlan returned to his father's company last year.
Wall Street has been concerned about succession planning at 21st Century Fox for some time given the sometimes contentious relationship that Rupert Murdoch has had with his children. Faber said the Murdoch brothers see their relationship as a "partnership."
21st Century Fox includes the 20th Century Fox film studios, the Fox Broadcasting Network and Fox News. The family's slower-growth publishing assets such as the Wall Street Journal, New York Post, along with newspapers in the U.K. and Australia trade under the name News Corp. (NWS). The Murdoch properties were split up in 2013 amidst pressure from shareholders.
Shares of 21st Century Fox were down 0.4 percent in late afternoon trade at $32.73.