Rupert Murdoch's son Lachlan resigned unexpectedly as a senior executive at News Corp. today, ending his father's hopes that he would someday command the sprawling media empire.
NEW YORK — Rupert Murdoch’s son Lachlan resigned unexpectedly as a senior executive at News Corp. today, ending his father’s hopes that he would someday command the sprawling media empire that owns Twentieth Century Fox and Fox News Channel.
The sudden departure put the spotlight back on the issue of who would eventually succeed Murdoch, who is 74 years old. The next most likely candidate in the Murdoch family is Lachlan’s 32-year-old brother James, but given his youth he would not likely be a candidate for many years.
Lachlan said in a statement that he would move back home to Australia with his wife and son, but he did not elaborate on his reasons for leaving, and a company spokesman declined to comment. He will remain on the company’s board of directors.
Rupert Murdoch said in a statement that he was “particularly saddened by my son’s decision.” He also said he “respected the professionalism and integrity that he has exhibited throughout his career” at the company.
Murdoch has said he hopes that News Corp. would eventually be run by a member of his family, which controls 30 percent of the company’s voting shares. However, Murdoch, who seems healthy and fit, has given no sign that he intends to step aside any time soon.
Lachlan, who is 33, had been considered his father’s favorite to eventually succeed him, though his youth and relatively short business experience made his succession unlikely in the near term.
Lachlan joined the company’s Australian newspaper business in 1994, and eventually became News Corp.’s deputy chief operating officer, in charge of its Australian newspapers, the New York Post and a group of U.S. television stations.
Lachlan’s departure renews pressure on News Corp. to clarify its succession plans. For the moment, chief operating officer Peter Chernin is seen as the one who would run the company should Murdoch retire or become unable to serve as CEO.
Chernin, who is 54, is a highly regarded media executive whose name had been mentioned as a possible successor to outgoing Walt Disney CEO Michael Eisner, before Robert Iger was tapped for that job. Chernin signed a five-year contract with News Corp. last year.
“We think it’s an important thing for the company to re-address this matter, and no doubt they do too,” said Heather Goodchild, a credit analyst and a managing director of Standard & Poor’s.
Before taking over BSkyB, James had been CEO of News Corp.’s Asian satellite broadcaster Star Group Ltd. and also held other senior posts at News Corp., including executive vice president.
James gave up his positions at News Corp. in 2003 as well as a seat on the company’s board when he took the reins at BSkyB. James’ appointment there had raised opposition from shareholders and led to accusations of nepotism.
Murdoch’s daughter Elisabeth, 36, left BSkyB in 2000 to set up her own television production company in England, and seems to have exited the running to succeed her father for now.
Lachlan’s departure comes shortly after Murdoch had taken steps to shore up his control of News Corp. Last fall Murdoch put in place a defensive “poison pill” measure after media investor John Malone, a longtime friend and sometimes rival of Murdoch’s, unexpectedly doubled his voting stake in News Corp. to about 18 percent.
Malone is believed to be interested in winding down his stake in News Corp. and perhaps swapping it for one of News Corp.’s entertainment assets, although neither he nor Murdoch have given a clear indication of how or when that may happen.
Investors took the news of Murdoch’s departure in stride. News Corp.’s shares fell 19 cents, or 1.2 percent, to close at $16.38 on the New York Stock Exchange today, in line with a decline in the overall market.
Jessica Reif Cohen, a media analyst with Merrill Lynch, said Lachlan’s departure makes James the new heir apparent, though she stressed that this was a “long-term” proposition. “I think that as long as Rupert’s healthy he’s going to be around for a long time,” she said.
News Corp. is one of the largest global media companies. Its properties include the Twentieth Century Fox movie studio, the Fox broadcast network, Fox News Channel, DirecTV and the HarperCollins book publishing unit.
“I would like especially to thank my father for all he has taught me in business and in life,” Lachlan said in a statement. “It is now time for me to apply those lessons to the next phase of my career.”