News Corp. chairman and chief executive Rupert Murdoch was stepping onto an elevator at the Allen & Co. media gathering in Sun Valley, Idaho, last year, when he was asked about a $1.1 million settlement his company had just paid. The money went to resolve a claim that reporters at a News Corp. newspaper in London had illegally listened to the voice-mail messages of a British sports official.
He hadn’t heard of any such settlement, Murdoch said.
“If that had happened, I would know about it,” he told Bloomberg News at the time.
Murdoch’s son, James, knew, according to two people familiar with the situation. James Murdoch, head of News Corp.’s businesses in Europe and Asia, negotiated the settlement himself in an effort to end the controversy, the people said.
“James Murdoch has been doing things to prove himself beyond his father’s shadow,” said Shahid Khan, chairman and chief strategist at MediaMorph Inc., a New York-based digital media-tracking service. “He’s been determined to show that he’s his own man.”
The younger Murdoch is the leading contender to succeed his father at the helm of News Corp., says Hamilton Faber of London-based Atlantic Equities. The 37-year-old not only bears his father’s name, he’s worked at the company for 14 years and run many pieces of the business, including a group that now accounts for about 20 percent of the company’s $32.8 billion in revenue.
No decision has been made on the next CEO and the timing is unpredictable because it’s tied to how long 79-year-old Rupert can keep running the company, two people familiar with the situation said. Alternative candidates, such as chief operating officer Chase Carey, may prove more palatable to the board if a decision must be made in the near future, they said. Meanwhile, James must show he’s capable of the top job and more than just a Murdoch, Faber said.
“James Murdoch looks like he’s being particularly groomed to be the successor,” the analyst said in an interview. “But it appears that he has to kind of prove himself.”
James works out of London for New York-based News Corp. His glass-enclosed office overlooked the newsroom of the company’s Sunday Times, until employees were relocated this month to a new site.
James has plenty of opportunity to prove himself in his current post, says analyst David Bank of RBC Capital Markets in New York.
James oversees newspapers, pay-TV operations and broadband services that generate about $7 billion in revenue — and account for a growing number of the company’s most pressing challenges.
One paper in his portfolio, News of the World, sparked the phone-hacking uproar. Rather than being resolved, it has escalated in the past year, with two committees in Parliament investigating. The political fallout has fueled opposition to News Corp.’s bid for full control of British Sky Broadcasting Plc, the U.K.’s biggest pay-TV operator.
