Murdoch's rarefied heir

James on track to run News Corp.

A quieter and more nurturing style might be James Murdoch's secret weapon as he steps up to the role of chairman and CEO of News Corp.'s European and Asian operations — and heir apparent to father Rupert Murdoch's vast media kingdom.

When James Murdoch was picked as CEO of News Corp.-controlled U.K. satellite TV giant British Sky Broadcasting in late 2003 at age 30, most in the industry shrugged him off as an immature lightweight despite successes at Asian satellite TV arm Star TV. Even when the operation turned profitable, some observers gave the credit to a hit TV show, known in other parts of the world as "Who Wants to be a Millionaire."

But when the young — he'll turn 35 Wednesday — son of News Corp. chairman and CEO Rupert Murdoch last week was elevated to his new role, most observers said he has matured and shown his father's passion for the business, decisiveness and competitive instincts — though with his own twist.

The son, who began ascending more quickly after older brother Lachlan resigned from his News Corp. executive posts in mid-2005, steps down as CEO of BSkyB having unquestionably earned his spurs at the U.K. satellite giant. He has transformed the satcaster from a single-play pay TV platform to a mixed offering with high quality broadband, DVR and HD attractions to boot.

Even colleagues who might have been skeptical when he was controversially handed the post four years ago agree that his legacy might be more unexpected.

"Much has been written about his strategy and vision and ability to take risk, which might be described as fairly routine Murdochian attributes," said one senior Sky executive who declined to be named. "But less is made of the fact that he has really supreme people skills. He is one of those leaders who makes people who work for him feel like going the extra mile for him every time."

Internally, James is credited with dismantling the testosterone-fueled boys club that was BSkyB. "It was very territorial and quite political, and there was a sense that the fiefdoms were being pitted against each other," a former executive at the satcaster said.

"But because of the huge strategic risks we were taking, it had to become a place where people would pull together, and James is very good at that," that person added.

In his newly created role at News Corp., James Murdoch will oversee pay TV assets in Italy and Asia as well as remaining nonexecutive chairman of BSkyB. Additionally, he will take charge of Rupert Murdoch's beloved British newspaper stable, including the stately London Times and Sunday Times as well as the tabloid newspapers the News of the World and the Sun.

This will give him a sphere of influence quite separate from that of News Corp. president and COO Peter Chernin, who is most closely focused on the conglomerate's U.S. entertainment assets.

The Asian and especially the Eastern European businesses of News Corp. are expected by some analysts to grow during the coming years. But all agree the new gig will be tricky.

"Most people will be very, very comfortable with him in this elevated role after the terrific job he did at BSkyB," said Gamco Investors portfolio manager Lawrence Haverty, whose firm owns a stake in News Corp.

"He is the son, but he hasn't been thrown into easy situations," he said. New Corp.'s Asian initiatives have faced significant opposition in China. and Star TV has tripped up several top News Corp. execs. Even his father drew the ire of Chinese officials when he made a critical comment about the Beijing government's restrictions.

It also will be a challenge for the self-confessed digital whiz kid — James is far more MySpace and YouTube than newsprint and printing presses — to develop an emotional connection with the newspapers that were the base of his father's global empire and where much of his political influence was built.

He worked as a 15-year-old intern at the Sydney Daily Mirror but made headlines in the rival Sydney Morning Herald after he was photographed asleep on a sofa at a press conference. His backers, however, believe that he might well bring a new perspective to an industry that many fear is on the wane.

"What he did much more of at Sky was spend a huge amount of time doing customer closeness research," a former colleague said. "Actually understanding the customer and what they want is a huge strength and one that will be just as relevant if not more so when it comes to the way that newspapers will be impacted by digital technology."

Wall Street observers definitely have become more comfortable with the idea that he could take over from his father down the line and maybe even take some of Chernin's responsibilities when his contract expires in 2009 or thereafter.

"Young James has done well with the BSkyB responsibilities," said Hal Vogel, longtime media analyst and president of Vogel Capital Management. "I met him only once (and) thought he was quiet and reserved, couldn't figure out whether he had the executive stuff or not. But he seems to be on the right track."

David Joyce, analyst at Miller Tabak + Co., echoed that sentiment. "Ten years ago or so, he was behaving young and doing fun things, and everyone thought Lachlan was the heir apparent," he said. "But he has really proven himself very well."

While attending Harvard, James edited underground magazines and drew a comic strip for the college's satirical magazine, Harvard Lampoon. He dropped out of college in 1995 and with college friends Brian Brater and Jarret Myer, he backed the establishment of Rawkus Records, an independent hip hop record label. The label drew critical praise but had to be bailed out financially, and the company was bought by News Corp. in 1998.

At BSkyB, he fully seemed to come into his own. One of James Murdoch's best calls at BSkyB was his "rapid move to block Virgin (Media) from (buying) ITV, which was a wise move," Joyce says, referring to BSkyB's November 2006 decision to take an 18% stake in ITV.

"He can be very tough — just like his father, even when it has a near-term financial effect," argued Haverty, who said his handling of the ITV situation was "a page right out of his father's playbook."

While his business and personal styles seem to be growing more comparable to his dad's, all eyes will be on the young heir to the News Corp. throne in the coming years as he tries to further prove his worthiness.

Said one Wall Street observer: "I expect he will nearly get as much attention from industry folks as Prince Harry and William get in the British press."

Mimi Turner reported from London; Georg Szalai reported from New York.