Rupert Murdoch's son and heir apparent at the News Corporation, Lachlan Murdoch, abruptly resigned from his executive posts at the media company on Friday and said he was moving back to Australia with his family.
His departure raises fresh questions about executive succession at one of the world's most successful and powerful media companies. Though Rupert Murdoch, 74, has refused to publicly pick a successor, it was widely believed that he favored Lachlan, his oldest son, to replace him as chief executive and chairman upon his retirement.
The company said Lachlan Murdoch, 33, would remain on News Corporation's board but would relinquish his executive posts, which include deputy chief operating officer. He is also the publisher of the New York Post.
PHOTO: AP
"I look forward to returning home to Australia with my wife, Sarah, and son, Kalan, in the very near future. I would like especially to thank my father for all he has taught me in business and in life. It is now time for me to apply those lessons to the next phase of my career," he said in a statement.
Rupert Murdoch said: "I am particularly saddened by my son's decision and thanked him for his terrific contribution to the company, and also his agreement to stay on the board and advise us in a number of areas."
With Lachlan's departure, the front runners to replace Rupert Murdoch now are James Murdoch, his 32-year-old son who runs the company's British satellite-TV operation, and Peter Chernin, News Corp's president and chief operating officer.
"The investment community has an interest in figuring this out as well because you would probably come down on the side, in the near term, of Peter Chernin vs his sons. We are in kind of an ambiguous place right now," said Michael Nathanson, an analyst at Sanford C. Bernstein & Co.
Though Murdoch has long wanted one of his sons to succeed him, investors and analysts prefer Chernin, 51, with his greater experience and lack of family ties.
"From an investor's standpoint there was an ongoing fear of nepotism that is lifted, or at least partially lifted, by his departure," Richard Greenfield, an analyst with Fulcrum Global Partners, said referring to Lachlan Murdoch.
Other media companies like Disney have eyed Chernin as a candidate for top jobs, a factor that could play into the thinking of News Corp's board, which would not want to see such a senior executive leave to join a competitor.
Greenfield said he doesn't expect Lachlan Murdoch's decision to have any significant impact on News Corp.'s operations, because Rupert Murdoch and Chernin remain in control.
"It further cements the fact that if anything happens to Murdoch in the next year or two that Peter Chernin, the No. 2, will take his place," he said.
Rupert Murdoch built News Corp from a small Australian newspaper company that he inherited from his father into one of the world's biggest and most prominent media companies over the course of several decades. Now based in New York, it owns or controls properties that include the Fox network, the Times of London and DirecTV. The Murdoch family's 30 percent stake in the company is the largest of any entity.
But how much control the family will be able to maintain has recently been called into question. Liberty Media, which is led by Murdoch's friend and sometime business ally John Malone, has amassed an 18 percent stake in News Corp and may be considering buying even more shares. News Corporation and Liberty executives have been in negotiations over the matter.
News Corp shares were down US$0.14 to US$17.43 in New York trading at midday on Friday.
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