This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.nytimes.com/2014/03/27/business/lachlan-murdoch-is-named-to-a-top-news-corp-position.html
The article has changed 3 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Putting 2 Sons in Top Posts, Murdoch Guards His Dynasty | Putting 2 Sons in Top Posts, Murdoch Guards His Dynasty |
| (35 minutes later) | |
| Two years ago, Rupert Murdoch was in retreat. His media empire was consumed by a phone-hacking scandal in Britain, threatening to engulf his son and heir-apparent, James. Family resentments boiled over into public view — he was distanced from both his son Lachlan and his daughter Elisabeth, and, according to friends, his marriage to Wendi Deng was showing signs of stress. Wall Street had grown impatient with his infatuation with newspapers, as had the leadership of the company he built, News Corporation. | Two years ago, Rupert Murdoch was in retreat. His media empire was consumed by a phone-hacking scandal in Britain, threatening to engulf his son and heir-apparent, James. Family resentments boiled over into public view — he was distanced from both his son Lachlan and his daughter Elisabeth, and, according to friends, his marriage to Wendi Deng was showing signs of stress. Wall Street had grown impatient with his infatuation with newspapers, as had the leadership of the company he built, News Corporation. |
| Even as his footprint grew wider in news, sports and entertainment, Mr. Murdoch seemed increasingly beleaguered, with no next act or obvious successor. | Even as his footprint grew wider in news, sports and entertainment, Mr. Murdoch seemed increasingly beleaguered, with no next act or obvious successor. |
| But in a career full of remarkable comebacks, Mr. Murdoch, now 83, had at least one more remaining. He closed the popular News of the World tabloid to stanch the British scandal, and he encouraged James to return to the United States. He split his company in two: News Corporation, to hold his beloved newspapers, and 21st Century Fox, with the lucrative entertainment assets. Wall Street loved the corporate split. Last fall he divorced Ms. Deng, and the hacking scandal has since landed on former executives. | |
| And on Wednesday, he named both Lachlan and James to senior positions at his companies, all but ensuring that a media conglomerate that has always been run like a small family business would have a Murdoch in charge for years to come. | And on Wednesday, he named both Lachlan and James to senior positions at his companies, all but ensuring that a media conglomerate that has always been run like a small family business would have a Murdoch in charge for years to come. |
| Lachlan, 42, became nonexecutive co-chairman of the News Corporation and 21st Century Fox, returning to his father’s side after a nine-year absence. James, 41, was appointed co-chief operating officer at 21st Century Fox. Mr. Murdoch announced the moves to staff in internal memos that he signed himself. | Lachlan, 42, became nonexecutive co-chairman of the News Corporation and 21st Century Fox, returning to his father’s side after a nine-year absence. James, 41, was appointed co-chief operating officer at 21st Century Fox. Mr. Murdoch announced the moves to staff in internal memos that he signed himself. |
| The bold nature of the appointments — the fact that he is able to install his sons in leading roles at companies with a combined market cap of about $83 billion — underscores Rupert Murdoch’s unique standing in American business. Huge public companies are almost never inherited, and in this instance, Mr. Murdoch is elevating not one son, but two. It not only illustrates the force of his personality, but reflects years of calculated moves combined with an ability to live above consequence when trouble looms, as it did during the hacking scandal. | |
| The moves were broadly in line with Wall Street expectations, said David Bank, an analyst with RBC Capital Markets. Within 10 years, he said, it is likely that the companies will be run by a new Murdoch. “It feels like, by increasing the operational portfolio for James, they are grooming him for a bigger role,” he said. | The moves were broadly in line with Wall Street expectations, said David Bank, an analyst with RBC Capital Markets. Within 10 years, he said, it is likely that the companies will be run by a new Murdoch. “It feels like, by increasing the operational portfolio for James, they are grooming him for a bigger role,” he said. |
| When Lachlan decided in 2005 to leave his post as deputy chief operating officer of News Corporation, after clashes with other senior executives, it was viewed as a rejection of the leadership path for which he was seemingly being groomed. Since then, Rupert Murdoch, who will remain executive chairman of News Corporation and chairman and chief executive of 21st Century Fox, has worked assiduously to bring his oldest son back into the fold, said three people familiar with the process, who spoke on condition of anonymity to describe sensitive family matters. | When Lachlan decided in 2005 to leave his post as deputy chief operating officer of News Corporation, after clashes with other senior executives, it was viewed as a rejection of the leadership path for which he was seemingly being groomed. Since then, Rupert Murdoch, who will remain executive chairman of News Corporation and chairman and chief executive of 21st Century Fox, has worked assiduously to bring his oldest son back into the fold, said three people familiar with the process, who spoke on condition of anonymity to describe sensitive family matters. |
| A fourth person, who is close to the Murdochs, said Rupert had been “chipping away” at Lachlan for years at family gatherings and investor conferences. Last October the elder Mr. Murdoch posted a photo on Twitter showing the two leaning on boulders in Australia with glasses of wine, Lachlan wearing shorts and his father in a hat and a hoodie. | A fourth person, who is close to the Murdochs, said Rupert had been “chipping away” at Lachlan for years at family gatherings and investor conferences. Last October the elder Mr. Murdoch posted a photo on Twitter showing the two leaning on boulders in Australia with glasses of wine, Lachlan wearing shorts and his father in a hat and a hoodie. |
| James, according to two of the people, has also been pressing Lachlan to return. The brothers had become closer as a result of the hacking scandal and then their father’s divorce from Ms. Deng, which removed a significant source of tension between the father and the sons. | James, according to two of the people, has also been pressing Lachlan to return. The brothers had become closer as a result of the hacking scandal and then their father’s divorce from Ms. Deng, which removed a significant source of tension between the father and the sons. |
| The family saga, which has played out in part in the pages of the British tabloids and in magazines like Vanity Fair, has long been a source of fascination to Murdoch-watchers. Elisabeth Murdoch left the company in 2000 and has established a life apart from her father’s companies, living in London with her husband, the public relations executive Matthew Freud. Though she sold her television production company, Shine, to News Corporation in a deal that valued it at $670 million in 2011, she is considered unlikely to return. | The family saga, which has played out in part in the pages of the British tabloids and in magazines like Vanity Fair, has long been a source of fascination to Murdoch-watchers. Elisabeth Murdoch left the company in 2000 and has established a life apart from her father’s companies, living in London with her husband, the public relations executive Matthew Freud. Though she sold her television production company, Shine, to News Corporation in a deal that valued it at $670 million in 2011, she is considered unlikely to return. |
| James Murdoch had shown the most willingness to succeed his father, and had successfully taken on several executive roles. But inside the company it was felt that his prospects were tarnished by the phone-hacking scandal that engulfed the company’s British newspaper division while under his leadership. | James Murdoch had shown the most willingness to succeed his father, and had successfully taken on several executive roles. But inside the company it was felt that his prospects were tarnished by the phone-hacking scandal that engulfed the company’s British newspaper division while under his leadership. |
| Since then he has been seeking a new direction — he was instrumental in persuading his father to sign off on buying a stake in Vice Media, for example. | Since then he has been seeking a new direction — he was instrumental in persuading his father to sign off on buying a stake in Vice Media, for example. |
| Despite James Murdoch’s troubles, Rupert Murdoch has demonstrated a high degree of loyalty to him, and has even cut off ties with some former colleagues who have clashed with James. The new role suggests Rupert now believes James is ready to resume his upward trajectory in the company. | Despite James Murdoch’s troubles, Rupert Murdoch has demonstrated a high degree of loyalty to him, and has even cut off ties with some former colleagues who have clashed with James. The new role suggests Rupert now believes James is ready to resume his upward trajectory in the company. |
| Though based in New York, where he is expected to primarily remain, James Murdoch has been increasingly visible on the studio’s Century City lot in California over the last year, Fox executives said. Indeed, Fox insiders positioned James’s new job as one that formalized a role he played for some time. He gained oversight of the Fox Networks Group, which includes the Fox broadcast network and the FX and National Geographic cable channels. (His purview notably does not include the Fox News Channel, which continues to be run by Roger Ailes.) | Though based in New York, where he is expected to primarily remain, James Murdoch has been increasingly visible on the studio’s Century City lot in California over the last year, Fox executives said. Indeed, Fox insiders positioned James’s new job as one that formalized a role he played for some time. He gained oversight of the Fox Networks Group, which includes the Fox broadcast network and the FX and National Geographic cable channels. (His purview notably does not include the Fox News Channel, which continues to be run by Roger Ailes.) |
| The move raised questions in Hollywood among those who work with and around 21st Century Fox. In a statement, Rupert Murdoch said James Murdoch would stand “alongside” Chase Carey, the chief operating officer and president. But it was not clear whether the position was an apprenticeship to Mr. Carey, or a partnership. TV agents noted that Mr. Carey’s title remained chief operating officer while James is co-chief operating officer, a subtle but potentially important distinction. Others speculated that Mr. Carey, a disciplined operator who is prized by Wall Street, might depart. | The move raised questions in Hollywood among those who work with and around 21st Century Fox. In a statement, Rupert Murdoch said James Murdoch would stand “alongside” Chase Carey, the chief operating officer and president. But it was not clear whether the position was an apprenticeship to Mr. Carey, or a partnership. TV agents noted that Mr. Carey’s title remained chief operating officer while James is co-chief operating officer, a subtle but potentially important distinction. Others speculated that Mr. Carey, a disciplined operator who is prized by Wall Street, might depart. |
| A spokeswoman for Fox, Julie Henderson, said James Murdoch and Mr. Carey stood as equals. She said Mr. Carey was going nowhere. “We are in the process of finalizing Chase’s extended employment agreement and are confident it will be complete shortly,” she said. She declined to give a length for Mr. Carey’s new contract. | A spokeswoman for Fox, Julie Henderson, said James Murdoch and Mr. Carey stood as equals. She said Mr. Carey was going nowhere. “We are in the process of finalizing Chase’s extended employment agreement and are confident it will be complete shortly,” she said. She declined to give a length for Mr. Carey’s new contract. |
| Within the company, the succession strategy involving the two sons was always viewed as a fait accompli, said one company executive familiar with the situation. The Murdoch family trust controls almost 40 percent of the voting shares and both sons have board positions on News Corporation and 21st Century Fox. When News Corporation was split, the executive said, the newspapers were unexpectedly paired with almost all of the company’s assets in Australia — where Lachlan Murdoch had a large footprint. | Within the company, the succession strategy involving the two sons was always viewed as a fait accompli, said one company executive familiar with the situation. The Murdoch family trust controls almost 40 percent of the voting shares and both sons have board positions on News Corporation and 21st Century Fox. When News Corporation was split, the executive said, the newspapers were unexpectedly paired with almost all of the company’s assets in Australia — where Lachlan Murdoch had a large footprint. |
| The spinoff, though prompted by the hacking scandal, had the effect of pulling Lachlan Murdoch back toward the fold. The companies said he would divide his time between Sydney and New York. | The spinoff, though prompted by the hacking scandal, had the effect of pulling Lachlan Murdoch back toward the fold. The companies said he would divide his time between Sydney and New York. |
| Though Rupert Murdoch has set a clearer path to succession, News Corporation, like other publishing companies, faces significant challenges in a changing market, with advertising declining precipitously. | Though Rupert Murdoch has set a clearer path to succession, News Corporation, like other publishing companies, faces significant challenges in a changing market, with advertising declining precipitously. |
| In an internal memo, Rupert Murdoch said that Lachlan Murdoch would add “strength and insight to our leadership team at a time of great opportunity and challenge for our company.” | In an internal memo, Rupert Murdoch said that Lachlan Murdoch would add “strength and insight to our leadership team at a time of great opportunity and challenge for our company.” |