James Murdoch primed to fill Carey-sized Fox hole

There is a moment about 10 minutes after the start of each 21st Century Fox earnings call - usually following some perfunctory opening remarks from Rupert Murdoch - when the energy level dials down a few notches.

This is when Chase Carey, Fox's chief operating officer, takes over to talk about the performance of the company's various business units.

With his somnolent voice and tendency to delve into the most granular aspects of operations, Mr Carey is not the most dynamic of public speakers. Yet he is revered by investors - his ability to ensure the company gets top dollar for its content is as notable as his impressive handlebar moustache.

He is also valued by Mr Murdoch, who has described him as his "partner and trusted adviser". When Fox made its shortlived $71bn bid for Time Warner last summer, it was Mr Carey who made the initial approach to Jeff Bewkes, its chief executive.

Mr Carey has overseen Fox's investment in sport, led tricky negotiations over fees for the "retransmission" of its networks by cable and satellite operators and was a stabilising presence for Mr Murdoch during the phone-hacking crisis.

But with a contract that expires in June 2016 and an option to leave this December, his days by Mr Murdoch's side may be numbered. Publicly, at least, he has not shown interest in signing a new deal. The word on Wall Street is that he has decided to retire.

Lined up to succeed him is Mr Murdoch's youngest son, James. He has a long record in the family business having run Star, its Asian television group, Sky and News International (now known as News UK), which operates the portfolio of newspapers owned by Fox's sister company, News Corp.

The phone-hacking scandal marked a low point, with criminal investigations and a public and political outcry causing severe reputational damage. Since then News Corp - and James - have moved on.

Two years ago News Corp was separated into two companies: 21st Century Fox, to house its entertainment assets; and News Corp, to be the home of its print and publishing businesses. James, meanwhile, stepped down as chairman of News International in 2012 and moved to the US to work for Fox.

He has taken on a more visible role with investors since he was appointed co-chief operating officer alongside Mr Carey last year in a managerial reshuffle that also marked the return to the fold of Mr Murdoch's older son, Lachlan. James has worked closely with Mr Carey, managing Fox's global operations and working on several big deals, including the sale of Fox's holdings in Sky Italia and Sky Deutschland to Sky of the UK, to create Sky Europe.

If, as expected, James succeeds Mr Carey there will be no repercussions on the Murdoch family's succession plans. This is because the succession was effectively sealed last year when the two sons took their new roles, and Lachlan was named co-chairman of both Fox and News Corp.

There was no new role for their sister, Elisabeth, whose relationship with Mr Murdoch had hit the skids although has since improved.

Lachlan's new role came nearly a decade after he resigned as a News Corp executive and moved to Australia. His record there was spotty. Ten, the commercial television network, lost ratings and profits while he was chairman.

But he scored with REA, a real estate listings company. At Lachlan's urging, News Corp bought a 44 per cent stake in the business for less than $10m in 2001. It later increased its stake to 66 per cent, paying another $100m. Today REA has a market value of approximately $4.8bn.

As co-chairman of both companies, Lachlan is first in line to succeed his father. The 84-year-old Mr Murdoch shows no signs of slowing down, though, and has said on numerous occasions that he has no plans to retire.

Still, at some point James and Lachlan will almost certainly hold the top two jobs at Fox, a scenario their father had always hoped for.

The company and its investors will miss Mr Carey's calming influence if, as seems likely, he does not renew his contract. Mr Murdoch will, too, but he has faith in James. The younger Murdoch has big shoes to fill.

[email protected]

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation