Murdochs Still Believe They Can Run News Corp. Despite Hacking Scandal (Report)

Rupert Murdoch & Wendi Deng

Murdoch and Deng after their 1996 wedding.

Former Wall Street Journal writer Sarah Ellison analyzes the family turmoil in the upcoming issue of Vanity Fair.

LONDON - Rupert Murdoch's adult children went through therapy last year to come to terms with the succession issues that threatened to divide their family, according to report by former Wall Street Journal writer Sarah Ellison.

In the upcoming issue of Vanity Fair, Ellison claims that despite the turmoil of the phone-hacking scandal "inside the family, and the company" that James Murdoch can still be CEO of News Corp., taking over eventually after a period where Chase Carey replaces their father.

The piece - which will hit newsstands Friday, Nov. 4 - details a structure under which Lachlan Murdoch would be chairman, James Murdoch would be CEO and Elisabeth Murdoch would bow out of a role, despite having voting shares.

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Citing mostly unnamed sources, Ellison provides a study of the feuds and simmering conflicts that drive the Murdoch family yet seem to run in parallel with deep emotional relationships and a sense that - in the words of Elisabeth Murdoch, Ellison said the family view is - "it's us against the world."

Reps for Elisabeth said any input from the Shine CEO were from some years back.

Reps for News Corp. did not respond as this piece was posted.

The relationship between James Murdoch and his elder sister Elisabeth - whose Shine Productions was acquired by News Corp. for $675 million before the phone-hacking dispute exploded - is said to have massively deteriorated.

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Ellison claims that Elisabeth was dispatched to tell her brother that, in the wake of the phone-hacking scandal - he should step aside.

"Elisabeth blamed her brother for allowing the phone-hacking crisis to spiral out of control," Ellison writes.

"Elisabeth, at Rupert's suggestion, confronted James and said that he should step aside. James was infuriated," the piece went on.

Ellison's piece offers a portrait of a curious family structure where Rupert Murdoch's adult children are both devoted to their father and intensely doubtful of the extent of his love.

They are particularly wary of his habit of throwing them into the organization without his protection, an arena in which they have gone on to lose very public management battles with a succession of Murdoch's most senior rottweilers including Peter Chernin, Roger Ailes and Tony Ball.

To this end the children had undertaken therapy sessions earlier this year to help them manage both the succession process and their father's impulses.

"The siblings had been in family counseling with a psychologist over the issue of succession. They told James that if they worked together as siblings they could help him and his father have a better relationship," Ellison reports.

"Together the kids could hold Rupert to account to be a mentor to James and not to undermine him, as he had done with Lachlan so many years before."

Lachlan Murdoch left News Corp. in 1999 after a high-profile falling out with Fox News boss Roger Ailes.

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Ellison also claims that although Rupert's ambition is to make James - the News Corp. deputy COO and chairman and chief executive of News Corp. Europe and Asia - eventually his successor, their relationship had been under massive strain even before the phone-hacking scandal exploded early this year.

The "tensions between father and son were obvious to everyone," Ellison claims, detailing James' desire to build News Corp. Europe and Asia into a separate entity.

But despite the turmoil created by revelations of illegality at the now shuttered News of The World - and the far more damaging picture of a widespread executive cover-up which has now emerged - Ellison claims that "within the family" there remains a strong belief that James Murdoch can still control the global media powerhouse as CEO.

Ellison says that "close family confidante" of the family believes that Lachlan as chairman and James as CEO is the only way that Lachlan would lend his support to a future structure where he wields "a significant vote." But she goes on to describe Rupert Murdoch's third wife Wendi Deng as "an undeniable X factor in any discussion about the future."