James Murdoch steps down, Lachlan is now in play

By David Bain

The news that James Murdoch has stepped down as head of News International will again raise the succession stakes at the Murdoch-controlled family business – and no doubt fuel the  non-Murdoch-control media frenzy following on from the troubles at News Corp.

The ongoing Leveson Inquiry in the UK on press standards, sparked by a phone-hacking scandal involving the now deceased News International title the News of the World, has been reignited in the last week. Revelations about a supposed slush fund at News International, a subsidiary of News Corp, to pay for police information at the NotW and The Sun ratcheted up the pressure on News International and probably contributed to the resignation of James.

Always a reluctant newspaperman, James will now concentrate on News Corp’s TV and film business in the US. Given that much of the hacking problems occurred under his chairmanship at News International, his resignation must mean he’s taking some of the blame – albeit in a family business sort of way, still remaining inside the business.

It’s hard to tell what this means for succession plans at News Corp – it could easily mean nothing. Patriarch Rupert, almost 81, has shown a mercurial talent at keeping News Corp gazers constantly guessing wrongly about his next steps. Given this, he could still spring an enormous surprise and appoint, for example, his wife Wendy Deng as the heir apparent. He still holds all the cards.

But, in danger of guessing wrongly again, seasoned observers say the demise, or at least the sidelining of James, is likely to open the door to eldest son Lachlan. He was in London with his father recently overseeing the launch of the Sun on Sunday, effectively the replacement for the NotW. Recently Lachlan has maneuvered his way successfully into one of Australia’s biggest TV networks – a year ago he was appointed chief executive of Ten Network Holdings – after some earlier pitfalls. In a classic reverse succession way, he seems to be proving himself outside of the family business.

Speculation has suggested that Rupert might bundle all his newspaper businesses, or at least everything but the Wall Street Journal, together under his Australian unit News Limited, with the management based in Sydney. That would be convenient for Lachlan, who is a long-term resident of Australia’s biggest city – and has shown a reluctance to move to New York or London.

It might also give Rupert the chance to draw a line under the problems at News International and say he’s taking his newspaper back to his roots in Australia.