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James Murdoch resigns from News International (though not from News Corp)

James Murdoch resigns from News International (though not from News Corp)

News Corporation announced yesterday that James Murdoch, once seen as the logical heir to his father Rupert's media empire, has stepped down as News International chairman.

Although James Murdoch will remain deputy COO of News Corp, the company announced in a press release that he has "relinquished his position" at its subsidiary News International, which publishes the Sun and the Times of London.

Instead, James Murdoch will move to New York, where, according his father, he will "continue to assume a variety of essential corporate leadership mandates, with particular focus on important pay-TV businesses and broader international operations."

James Murdoch steps down as News International continues to deal with the consequences of the phone-hacking scandal that led to the closure of the News of the World last summer. Murdoch himself was twice called before the UK parliament's media select committee to answer questions about his involvement in the scandal.

As investigations continue, News International's papers are still dogged by allegations of wrong-doing. Metropolitan Police Deputy Assistant Commissioner Sue Akers told the Leveson Inquiry into media ethics last Monday that there was a "culture of illegal payments" at the Sun. Five Sun journalists were arrested and released on bail last month over alleged corrupt payments made to police officers.

As the bad press rumbles on, James Murdoch has become the most senior News Corp figure to step down from News International. He has been under pressure to do so since last year, when 35% of News Corp shareholders voted against his reelection to the board. The Guardian points out that when the shares controlled by Rupert Murdoch were subtracted, 67% of the vote was opposed to James Murdoch continuing in his position. Now, the paper writes, News Corp shareholders are planning to try to force James Murdoch out of News Corp altogether.

Commentators agree that, whatever else, James Murdoch no longer looks set to inherit his father's media empire. His resignation from News Interntaional "implies that 81-year-old Rupert Murdoch isn't planning to retire or step aside in favour of his son any time soon," writes BBC News business editor Robert Peston.

Different reasons have been suggested for the timing of James Murdoch's departure. Paul Connew, a former News of the World deputy editor, who is quoted in an article by the BBC, suggests that James Murdoch is being distanced from the scandal. "Quite clearly there's going to be criticism of James Murdoch in the culture and media select committee report, which presumably will be coming out in the not too distant future, and I think essentially he's been moved out of the firing line," he states.

The Guardian suggests that James Murdoch himself has been "eager to leave the UK and drop responsibility for the Wapping newspapers for several months."

Former editor of the Sunday Times Andrew Neil, who is quoted by the BBC, suggests that Rupert Murdoch regretted following James's advice to close the News of the World last July. Neil implies that the News Corp chairman and CEO wants to take greater control of the company's UK publishing business, as demonstrated by his decision to supervise the launch of the Sun on Sunday last weekend. "I think Rupert, who can be just as robust with his family as he can be with editors and executives who don't have the Murdoch gene in them, has decided James has nothing more to offer here in London," Neil tells the BBC.

It is still unclear what the consequences of James Murdoch's departure will be for News Corps's future in the publishing industry. An article in Bloomberg suggests that the company may be considering spinning off its publishing business altogether.

According to Bloomberg, News Corp's US television executive, president and COO Chase Carey told the Deutsche Bank media conference in Florida earlier this week that "there certainly is an awareness" that News Corp would do better business if it didn't own newspapers.

But former Scottish Sun editor Jack Irvine expressed confidence, speaking on Sky News, that News Corp was in the publishing business to stay. "It seems pretty clear to me that Rupert is now back in charge in Britain. Rupert is still in love with newsprint," he stated.

Sources: News Corp, BBC (1) (2), Press Gazette, SFN Blog (1) (2), ProPublica, Guardian (1) (2), Bloomberg, paidContent


Hannah Vinter


2012-03-01 16:19

Shaping the Future of the News Publishing

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