Rupert Murdoch preparing to step down as 21st Century Fox chief
This is a discussion on Rupert Murdoch preparing to step down as 21st Century Fox chief within the Sky news and announcements forums, part of the SkyUser Announcements category; Rupert Murdoch preparing to step down as 21st Century Fox chief | Media | The Guardian Mogul to continue as ...
- 11-06-15, 11:10 PM #1
Rupert Murdoch preparing to step down as 21st Century Fox chief
Rupert Murdoch preparing to step down as 21st Century Fox chief | Media | The Guardian
Mogul to continue as executive chairman of media and entertainment group, with his sons James and Lachlan taking leading roles
Rupert Murdoch has moved to ensure the future of his dynasty by putting his two sons at the top of 21st Century Fox while relinquishing the role of chief executive of the global television and film business. In a reorganisation expected to be ratified at a board meeting in New York as early as next week, the 84-year-old will hand his role of chief executive over to his youngest son, James.
The promotion to chief executive marks a remarkable turnaround for James Murdoch, who was mired in the phone-hacking scandal as chief executive of the company’s UK newspaper group before he left to join Fox in New York in 2011. While he won plaudits as chief executive of Sky, the UK-based satellite group, James Murdoch’s handling of the phone hacking scandal was sharply criticised by MPs and others.
The patriarch will remain executive co-chairman of the company behind the Fox television channels and films such as the X-Men franchise alongside his eldest son Lachlan, who also remains non-executive co-chairman of the family publishing empire News Corp.
With Chase Carey expected to stand down as chief operating officer of 21st Century Fox, the proposed reshuffle marks the first time that the top layers of management across the global business will all be in family hands. The position is highly unusual for a global US-listed business; the Murdochs own just 12% of the shares while controlling almost 40% of the votes.
The appointments do not necessarily clarify which of Murdoch’s sons will eventually take over at the helm of the global media business, but they suggest that succession planning has become an increasingly pressing issue for the media mogul. He is understood to have become detached from the film business over the past year, despite the fact that it is a far larger business than News Corp, with almost $32bn in revenues from a range of businesses. Its output spans Fox News, X-Men film studio 20th Century Fox, and a joint venture TV production group that is behind shows including MasterChef, Big Brother and American Idol. It also owns 40% of the UK’s Sky television.
“This will inevitably cause speculation as to whether Fox will sell its stake in Sky, or launch another bid for the remaining shares it does not own,” said Ian Whittaker, analyst at Liberum. “Any succession may just mean business as usual but, on balance, it is likely that this move increases the chances Fox sells its stake.” In 2011, Rupert Murdoch gave up on an £8bn attempt to takeover Sky after the fallout from phone hacking at News of the World engulfed News Corporation.
Meetings with newspaper editors as recently as last week and tweets about the British election have hinted that the octagenarian is just as interested in his British newspapers as he ever was.
Although James Murdoch now has the top executive role at Fox, Lachlan, who is expected to move from Australia to Los Angeles is executive chairman at both the film business and non-executive chairman of News Corp and so retains an essential role in both parts of his father’s empire. The younger son relinquished all involvement in the newspaper group, which includes the Wall Street Journal in the US and the Times and the Sun in the UK, following the hacking scandal. However, one source close to the company said: “That is it – James is running Fox.”
News of the reshuffle, first reported by CNBC’s David Faber, leaked out ahead of next week’s board meeting. A spokeswoman for 21st Century Fox confirmed that top-level changes were set to be discussed: “The matter of succession is on the agenda at our upcoming, regularly scheduled board meeting.”The 21st Century Fox entertainment business was split from Murdoch’s publishing empire News Corp – home to the Sun, the Times and the Sunday Times in the UK and the Wall Street Journal in the US – two years ago. Former editor of the Times Robert Thomson became chief executive of News Corp, while Rupert assumed the role of executive chairman.
Chase, whose contract was due to expire next year with an option allowing him to leave in December, is expected to remain as an adviser at the company. Carey, who has won plaudits from the company’s shareholders, replaced Peter Chernin, formerly News Corp’s chief operating officer, in 2009.
Lachlan Murdoch now lives in Australia but has spent much time working with his father since returning to the family firm last summer. Once he makes the highly anticipated move to Los Angeles with his family, insiders expect him to become even more involved in running the business.
The eldest son, he had quit News Corp and moved to Australia in 2005 after disagreements with senior executives. He only returned in March after a nine-year hiatus. His business record in Australia was patchy, with success at property company REA combined with weak investments and problems at Ten, a commercial television network.
As well as his two sons, Murdoch has two adult and two young daughters. Even Elizabeth Murdoch, the founder and former chief executive of Shine, an independent production company that has since been acquired by Fox, has no official role with the firm.
Feuding between the siblings reached such a peak during the phone-hacking scandal that Vanity Fair reported that they had had to turn to a “family counsellor” to discuss succession. Always close, the three children of Murdoch’s second marriage to Anna disagreed over the handling of the scandal and, in particular, the place of Rebekah Brooks, the former News International chief executive now set to make a return.
Fox A shares fell 1% or 28c to $32.67 immediately after the news.
21st Century Fox
Fox’s dual-class share structure means that the Murdoch family owns just 12% of the shares, but controls nearly 40% of the voting rights. Based in New York, it has a stock market value of $67bn and estimated profits of $4.6bn on revenues of $32bn.
Among its properties are Fox News, Fox Sports and Fox Movie channel (shows made include The Simpsons, Modern Family, 24 and Glee); National Geographic channel, Big Ten Network and Star India; movie studio 20th Century Fox, which has made films including the X-Men franchise, Slumdog Millionaire and The Fault in Our Stars.
It has a 39% stake in Sky, which owns Sky UK, Sky Italia and Sky Deutschland, and a 50% stake in a TV production group that makes shows including MasterChef, One Born Every Minute, Big Brother and American Idol. It also owns a library of films ranging from The Sound of Music to Ice Age and the Star Wars saga.
A separate publicly listed company with assets including the Sun, Times, New York Post, Wall Street Journal, the Australian and book publisher HarperCollins. In Australia, it still has TV assets Fox Sports and 50% of pay-TV company Foxtel.
It has a market capitalisation of $8.4bn. The company makes $8.5bn in revenues, Profits halved from $506m to $237m in the year to the end of June 2014, the last full year financial report.