Tue, July 19, 2011
World > Europe > News Corp. in hacking scandal

Britain: Murdoch dynasty in doubt

2011-07-19 03:40:37 GMT2011-07-19 11:40:37(Beijing Time)  SINA.com

LONDON — James Murdoch scaled the rungs of the global media empire that his father built. Now scandal taints the heir apparent, threatening to derail the expected succession and shaking the assumption that the Murdoch dynasty would preserve its tight grip over the multibillion-dollar business.

Founder Rupert Murdoch, 80, has long expressed a wish to hand his publicly traded News Corp. to his offspring, and he retains the voting power to make key decisions. But shareholders and board members are said to be troubled by revelations of wrongdoing on Murdoch's watch, and feel the U.S.-based company needs fresh leadership.

A pivotal moment for the family comes Tuesday when the media mogul and his son testify before British lawmakers investigating the hacking and alleged police bribery at a now-shuttered tabloid, News of the World.

"The future is looking increasingly gray" for James Murdoch, said Ivor Gaber, professor of political journalism at City University London. "There are now investors, particularly in the United States, who are suggesting that the time has come to end the Murdochs' dynastic hold on News Corp."

Some analysts believe Murdoch is positioning 42-year-old daughter Elisabeth as a successor in the event that 38-year-old James, chief executive of his father's European and Asian operations, is forced to step aside or faces arrest.

"At the end of the day, that's what made it a success. It's 'Brand Murdoch,'" said Richard Hillgrove, a London-based public relations consultant and former commentator for Murdoch-owned newspapers in New Zealand. "He's going to do anything in his power to make sure it stays that way."

Hillgrove described Elisabeth Murdoch, who is expected to join the board of News Corp. in October, as the "likely contender" for leadership of the company and noted that she appears "untainted and pretty clean" in comparison to the pressure bearing down on her brother, James.

There have been unconfirmed reports in the British media of family tension and dissatisfaction on the part of Elisabeth with how the company has been run; some observers speculate people close to the family have leaked information to elevate her stature.

However, a suit in the United States has questioned News Corp.'s move in February to buy Shine Group., the television production company founded in Britain by Elisabeth, in a $670 million deal viewed by some shareholders as overpriced and fueled by nepotism. And while the company is successful, Elisabeth lacks experience at the highest levels of international management.

Another Murdoch son, 39-year-old Lachlan, is on the board of News Corp., but he quit a high-level position in the company in 2005 and does not have a management role. He is saddled in part by the legacy of a failed investment in an Australian telecoms company a decade ago.

Chase Carey, the American deputy chairman and president of News Corp., could step in to head the group as an option from outside the family. He previously worked with Fox television, a company holding.

Murdoch crafted a behemoth over the decades, acquiring newspaper, television, publishing and entertainment interests in Asia, Europe, the United States and Latin America. New York-based News Corp., which employs more than 50,000 people, said it had total assets as of March of $60 billion, and total annual revenues of $33 billion, though the scandal has pushed down share prices.

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