James Murdoch stands to win in proposed Time Warner deal

Company takeover could make the career of scandal-tarred son of magnate Rupert Murdoch

PUBLISHED : Saturday, 19 July, 2014, 12:19am
UPDATED : Saturday, 19 July, 2014, 12:19am


Two years ago James Murdoch's career seemed all but over, derailed by his pivotal role in the British phone hacking scandal that shook the foundations of his father Rupert's media empire.

This week his comeback looked all but complete when he got a prominent name check as Rupert announced what could be the biggest deal of his career.

When The New York Times revealed that 21st Century Fox had made a play for Time Warner on Wednesday, Murdoch Kremlinologists were fascinated to see that James was named as instrumental to the proposed deal.

I do think this deal means he is completely back, but he will be ever marked

It was a telling moment in the mission to rebuild the 41-year-old's corporate reputation, left in tatters in the wake of the UK phone-hacking scandal. In 2012 James had been ignominiously forced to resign as head of News UK - publisher of the Times titles, The Sun and the now-defunct News of the World - and as chair of BSkyB, he said he had become a "lightning rod" for criticism.

"Without question there has been a planned rehabilitation from his time swimming with the fishes," one former colleague said. "I do think this deal means he is completely back, but he will be ever marked a little bit by what happened on his watch."

Rupert Murdoch has been laying the groundwork for the transition of power, but the question the Time Warner deal throws up is which of his sons will be his successor. A deal to buy Time Warner's TV and film assets plays to James's strengths: at 28 he ran Fox-owned Asian broadcaster Star, by 31 he was chief executive of BSkyB.

This year he was promoted to co-chief operating officer, serving alongside Fox president and chief operating officer Chase Carey, with direct responsibility for Fox's pay-TV strategy globally.

"I think the real question with this big audacious deal is whether he is the right hand man or not," the former colleague said. "He is incredibly smart and accomplished, without question he will continue the Murdoch media dynasty, the question is who is first among equals" among the sons.

The move further complicates the dynastic doings at the House of Murdoch. This year Murdoch enticed eldest son Lachlan back to the family business, almost 10 years after he left to set up an investment company in Australia. He was named non-executive co-chairman of the entertainment and publishing companies, seemingly positioning him as the heir apparent.

However, a takeover of Time Warner - a move rebuffed by TW but regarded as far from over - would be the biggest media deal since AOL/Time Warner in 2000. It would double the size of 21st Century Fox and play to James's broadcast strengths.

"This is the colossal deal that makes James's career," said Claire Enders, founder of media research firm Enders Analysis. "Time Warner's profitability is modest, management is relaxed and James and Chase Carey are the Fox executives with credibility in the TV business. Doing the deal will undoubtedly catapult [James] into the stratosphere, not just because of its scale, but because it is the deal to seal his reputation for years to come."

David Folkenflik, NPR media correspondent and author of Murdoch's World, said: "The real question is how Wall Street looks at them. They look at Rupert Murdoch and they see a man who has certainly squandered a lot of money on his impulses and yet he has made them a tonne of money. James has been capable in broadcast, Lachlan has had his struggles in Australia. Wall Street doesn't look at them with the same kind of admiration."

Wall Street analysts largely ignored the hacking scandal once it became clear that Murdoch was unlikely to he hauled away in chains. US investors have never shared Rupert's love of newspapers, which contributed little but red ink to his old empire. Now the empire has been split, they concentrate on Fox's fortunes.