Rupert Murdoch is preparing to step down as chief executive officer of 21st Century Fox Inc. and hand the title to his son James, according to sources, confirming a long-expected generational succession.
Mr Murdoch, the company’s 84-year-old founder, will remain chairman, said the the source, who asked not to be identified because the deliberations aren’t public.
The changes will include the appointment of Mr Murdoch’s older son, 43-year-old Lachlan, to the role of co-executive chairman. “The matter of succession is on the agenda at our upcoming, regularly scheduled board meeting,” Fox said in a statement Thursday, without elaborating.
The Murdochs control Fox, which owns film, cable and broadcast businesses, through a family trust, as well as News Corp, owner of the Wall Street Journal.
A phone-hacking scandal at their now-defunct News of the World newspaper four years ago led to questions in the UK about their fitness to lead a media empire and forced the Murdochs to abandon efforts to buy Sky TV.
“It’s a logical succession,” Mario Gabelli, chairman and founder of Gamco Investors , said in an interview in New York. The Murdochs “control the vote. This is expected.”
The elder Murdoch will still drive strategy at Fox, according to the source. James, 42, is currently the co-chief operating officer with Chase Carey, who is expected to stay on in an advisory role, the source said. ‘
“Chase Carey has done a fantastic job,” said Mr Gabelli, a longtime media investor whose company owns both voting and nonvoting shares of Fox. “I don’t think very much changes in terms of allocating of capital.”
Fox fell 0.8 per cent to $32.58 at noon. in New York.
The Class A nonvoting shares had declined 14 per cent this year up to Wednesday. CNBC earlier reported the changes in leadership.
Succession in family companies raises questions of corporate governance, according to Doug Creutz, a Cowen and Co analyst who has a neutral rating on Fox shares. Best practices would involve a search by the board to find the best candidate for the position, he wrote in a note on Thursday.
“James does have extensive operational experience, and could turn out to be a good or even great CEO who is more sensitive to shareholder concerns than Rupert was,” Mr Creutz wrote. “However, the bigger issue is the appearance that he is inheriting the role largely by dint of his last name rather than exclusively due to his qualifications.”
Fox and News Corp, operated separately since Mr Murdoch split his media empire in 2013, were embroiled in a scandal over hacked voice-mail accounts by journalists at the News of the World newspaper.
The 2011 scandal led Mr Murdoch to close the tabloid, and both he and James were called to testify before a parliamentary committee in the UK.
News Corp., which at the time owned both the publishing and entertainment businesses, dropped a £7.8 billion pound bid for full control of Sky.
James Murdoch, who led the UK newspaper unit of News Corp, dropped his role as chairman of BSkyB, as Sky was then called.
Lachlan is now co-chairman of News Corp, along with his father. Fox has struggled with shrinking ratings at its flagship Fox broadcast network, once the audience leader with the former hit show “American Idol.”
- Bloomberg
