News that Lachlan Murdoch was returning to the fold and James Murdoch was getting a promotion at 21st Century Fox caught many people on the Fox lot by surprise on Wednesday.
Not that it was unexpected in the grand scheme. Rupert Murdoch has always been clear that he hopes his children will one day take the reins of the sprawling global conglom that he's worked tirelessly to build for more than a half-century.
News Corp., under Rupert at both companies, brings him more formally back into the family business, although he has remained a board member. James' promotion to co-chief operating officer of 21st Century Fox cements his status as the No. 2 to 21st Century Fox president-COO Chase Carey. Carey is also in the midst of setting a new long-term contract with the conglom that calls for his title and responsibilities to remain status quo.
For Fox's film and TV businesses, the biggest change is that Fox Networks Group chairman-CEO Peter Rice will now report to James Murdoch rather than Chase Carey. 20th Century Fox film topper Jim Gianopulos, 20th Century Fox TV chiefs Gary Newman and Dana Walden and Fox News' Roger Ailes will continue to report to Carey.
James Murdoch and Rice are known to have a long relationship that extends beyond their professional association. But the shift in his reporting structure was done because the channels division that Rice oversees has been James' primary area of focus since he returned to the U.S. from the U.K. two years ago. He returned to Gotham on the heels of the politically explosive phone-hacking scandal at News Corp.'s U.K. newspaper division that was part of his domain at the time.
James has mostly kept a low profile since then, but sources said he has worked closely with Carey and Rice on plotting strategy for Fox Networks Group, particularly for the international assets. That plays to his strengths and his background of having previously overseen the former News Corp.'s international operations, as well as his stints running BSkyB and Asia's Star sat-TV services.
Lachlan's role is said to be focused on high-level strategy and planning decisions for both branches of the Murdoch Empire. Lachlan held top exec posts at News Corp. from 1994 through 2005, but left his post in New York to return to Australia, in part after famously butting heads with Fox News boss Roger Ailes. He returned to Australia where he has a mixed track record with his private investment banner, Illyria, and his investment in Oz's Ten Network.
Lachlan's appointment stirred immediate talk of his emerging as the heir apparent to his father, who is 83 and remains chairman-CEO of both News Corp. and 21st Century Fox. Execs close to the situation did their best to downplay the suggestion of a horserace between the two sons, noting that the two are very close. The posting of Lachlan with a 20,000-foot strategic view and James with a hands-on operational role could make for a potent combo down the road.
Absent from Wednesday's shuffle was sister Elisabeth Murdoch, who heads her U.K.-based Shine Group production-distribution venture. The company was bought out by News Corp. in 2011 and runs as an autonomous unit. By all accounts, she has removed herself from the succession fray and likes being able to call her own shots.
Murdoch Moves: What Lachlan and James' Ascent Means for Fox
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