Why James Murdoch Is Heir Apparent at News Corp.
NEW YORK -- James Murdoch, the 38-year-old son of News Corp. chairman and CEO Rupert Murdoch, cemented his position as his father's eventual heir to run the entertainment conglomerate when he was elevated this week to the No. 3 position in the company's executive ranks.
News Corp. on Wednesday named Murdoch deputy COO and chairman and CEO, international, and said he will move from London to New York. He will continue to report to his father's righthand man and day-to-day operator, Chase Carey, who is deputy chairman, president and COO. The promotion was his latest step toward potentially running News Corp. one day.
Better known in industry circles overseas, he has interacted with News Corp. executives in the U.S. in the past but will be more involved internally and in the industry overall once he moves by the summer.
Industry observers expect no immediate shockwaves at News Corp., but predict James will bring his interest in developing new services and business models, especially in the digital space, to bearing over time.
The fourth of Murdoch's six children has developed the reputation of a sharp and digitally savvy business operator who is interested in evolving traditional media brands in the digital age -- even if it means ruffling feathers of industry executives and observers. Putting this focus on trying new things that challene the status quo into words, he recently described global media firms as "gray and tired."
Murdoch is described as energetic, competitive, decisive and willing to make tough decisions. And -- much like his father -- he is willing to take a risk and ruffle feathers in the process.
Not afraid to pick a fight from a public platform, he launched a now famous attack on the BBC at the Edinburgh Television Festival two years ago: A scathing attack on what he described as the U.K. public broadcaster's "chilling scale" drew audible gasps from the audience, and his assertion that profit was the only guarantee of quality earned him few friends in a room full of BBC execs.
In personal interactions, though, Murdoch is known for a more reserved and formal style, which some attribute to a cadence of speech that is a mix of growing up, living and spending time in the U.S., the U.K. and elsewhere. Some also point out his tendency to use management speak, but many laud him for knowing his businesses and key numbers for those businesses.
One person who used to work around Murdoch described his management style this way: "He liked to get ideas from a number of sources and always brought his own strong ideas to the discussion. He enjoyed debating strategies and ideas - forcefully - but always did it in a non-threatening way."
He also has an interest in protecting the environment. His "green" initiatives at BSkyB set an early example that was later brought to News Corp.'s other business. The conglomerate recently said it has become the first entertainment conglomerate to become carbon neutral.
No one doubts Murdoch's ability to get results. After stepping into the sizable shoes of U.K. satellite TV provider BSkyB's former CEO Tony Ball, he shocked investors by announcing a major strategy switch, shifting the U.K. pay TV provider into a range of new products, including broadband access, high definition and on-demand content. The news sent a tremor through the share price that took a while to recover, but the bet paid off: Sky has eclipsed all its critics and rivals and appears to have a near unassailable position as the most successful pay TV platform in Europe.
Under his guidance, profitability and subscribers increased, which gave Murdoch credibility. "He fundamentally transformed that business" and improved service, said one insider.
One move during his time at BSkyB though that observers say was a miscalculation was his acquisition of a 17.9% stake in U.K. broadcaster ITV, which Murdoch had described as a financial investment. It led cable operator Virgin Media to abandon a play for ITV, but ITV's stock declined, and BSkyB eventually had to write down the value of its investment after regulators ruled it had to reduce its stake.
Over all though, people give him high marks for his work at BSkyB. "James' ascendancy is no surprise," said Larry Haverty, portfolio manager at Gamco Investors, which owns News Corp. stock. "He did a great job with BSkyB."
More recently, he has worked on re-energizing Asian TV provider Star and helping return it to profitability. He has also focused on emerging markets in Eastern Europe and Asia, including India, which he recently called "a sleeping tiger."
While he continues to head up the conglomerate's European and Asian business, observers expect that in his new role he will bring that focus on digital, innovation and customers to News Corp.'s U.S. assets, where Carey has worked on developing new revenue streams, such as retransmission consent fees for broadcasters.
With some saying he seems less interested in the traditional newspaper business, new ways to digitally distribute movies and other content is likely to be one area that will attract Murdoch's interest, according to observers.