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The chosen son? ( 2003-09-22 16:37) (Telegraph.co.uk)
Rupert Murdoch is putting his son James in charge of BSkyB. Is he now the heir apparent to the News Corp empire?
It was, to Askew, a typical illustration that Murdoch is a media executive who "gets it". One would certainly hope so, given that Murdoch is Star's chairman and CEO. But there is a rub, and that is James's surname and the fact that his father is Rupert, whose News Corporation owns StarTV - which might lead some to presume he is another in a long line of mogul's sons who inherited their powerful jobs but not their parents' talents. But James Murdoch likes to say: "My credentials are in our results". So let's look at StarTV. When James moved from New York to Hong Kong to take its helm in 1999, the company was bleeding an estimated $100m (¡ê63m) a year. Today, according to the independent media analyst Richard Greenfield at Fulcrum Partners in New York, it is turning a small profit and poised for growth thanks to new channels and distribution deals that Murdoch has spearheaded in India, China and Taiwan. "Instinct cannot be learned," says Askew, "and James does instinctively get it." Yet questions about Murdoch's credentials keep being asked. That's because at just 30 years of age, he is expected within weeks to be named chief executive of BSkyB - a far bigger operation than Star - replacing the well-regarded Tony Ball, who is stepping down. Even with the successes he's wrought at StarTV, running BSkyB is an astonishingly big step up because of its sheer size and the fact it is a public company in which News Corp has a stake of just 35 per cent. In addition to obvious concerns about whether he will continue the strategies Ball set in motion at BSkyB, Murdoch's promotion fuels the endless wagering over whether he or his elder brother, Lachlan, currently News Corp's deputy chief operating officer, is in line to be the inheritor of Rupert's empire. Its colonies include the Times and Sun newspapers, Fox television's networks and movie studio, and the DirecTV US satellite service. Few Londoners have seen much of low-key James, who was raised and schooled in the US, married a marketing executive, Kathryn Hufschmid, two years ago and now has a baby daughter. That is not expected to change much in the future, as he has never been one for the fashionable party scene. Like his father, whom he calls "Pop" and with whom converses on the telephone almost daily, James is obsessed with business. He made a rare appearance in the Square Mile in May, making a lunchtime presentation to fund managers about Star's prospects. "As a holder of BSkyB, I would prefer not to have a Murdoch as chairman and chief executive [Rupert Murdoch is chairman of BSkyB]," says William Barlow, an investment manager at DNB Asset Management, who attended the lunch. "But I was impressed by his very strong grasp of Star. To a certain extent I wouldn't have known that he is the son of the father because he is so understated and down to earth. There is no suggestion that there is a daddy's boy behind it." James Murdoch declined to be interviewed, but he is witty, sarcastic, quietly ambitious and surprisingly erudite. He possesses an encyclopaedic knowledge of both high-brow and low-brow matters, the kind of person who is equally at home discussing Marshall McLuhan and Marshall Mathers (Eminem to the uninitiated). Friends who have kept up with him the past couple of years say he has upgraded his Buddy Holly glasses and tousled hair and has a generally sleeker look about him, having spent his time in Hong Kong attaining a black belt in karate (and even recently entering a martial arts competition). Mark Roybal, a long-standing friend, notes that Lachlan was traditionally the athletic Murdoch. "James is not the most physically co-ordinated person, but he's never half-assed about anything," says Roybal, a senior executive who works with the movie producer Scott Rudin. "Two years later he's super fit and has got a black belt and he can probably kick our asses." Roybal met Murdoch as a freshman at Harvard, where James focused his studies on film and puppet animation and produced a comic strip for the satirical magazine, Lampoon. In 1995, he dropped out to co-found a rap metal music label, Rawkus Records, with a group of friends. But a year later the label was sold to News Corp and the "rebel son" was back in the clan as head of the company's fairly insignificant music operations. Then the internet exploded, and Rupert charged James with sorting out News Corp's digital investments and strategy. Several of the deals he spearheaded or endorsed went sour. But in the end News Corp's track record for dud internet-driven bets paled compared with the damage inflicted to the likes of Disney (or for that matter the absurd sales of Time Warner to AOL and of Seagram to Vivendi). Ready for a new challenge, James accepted but then turned down the opportunity to run News Corp's New York Post tabloid. He opted instead to uproot with Kathryn to Hong Kong. So is he now the favoured scion? Well, Rupert Murdoch has in the past said that if anything were to happen to him, News Corp's president Peter Chernin would be his successor until one of his children was ready to take over. And he has also described Lachlan as the first among equals. In toto, the 72-year-old Murdoch has six children from three marriages, including Elizabeth, Lachlan and James, all the offspring of Anna, whom Murdoch divorced in 1999. Anyway, two years ago, Anna said she hoped none of the children would end up at the helm of News Corp. "I think they're all so good they could do whatever they wanted, really. But I think there's going to be a lot of heartbreak and hardship with this." Elizabeth, a former BSkyB executive, effectively took herself out of the running by quitting the company a few years ago. In public, the Murdoch brothers have always shied away from intra-family competition, with the exception of the odd skeet-shooting contest at their father's ranch in Carmel, California. While Lachlan doesn't have the bottom-line responsibility for a public company that James will have at BSkyB, several big groups within News Corp's US operations report to him, including the book publisher HarperCollins, Fox's television station group, and the Post. In family and tradition-oriented Asia, James found that he could use the Murdoch surname to door-opening advantage. Leading the team at StarTV, his accomplishments there include making it the largest broadcaster in India, as well as buying into cable TV companies there and launching radio stations. The company also took a stake in a big Taiwanese cable company, and James achieved his father's long-time goal of getting the rights to an entertainment TV channel in China. Unlike subscription-driven BSkyB, StarTV generates the bulk of its profits from television advertising, which means young Murdoch was constantly on the road. His main priority was tailoring programming for a wide range of local markets and languages. "I think he loved it," says Bruce Churchill, who until recently was StarTV's president under James and is now working at DirecTV. "It was a real chance for him to be on his own and have something that was clearly his responsibility." Now, apparently, he is ready for an even greater challenge.
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