But behind that facade, the disclosure of widespread phone hacking at News Corporation’s British newspaper division was only the latest and most serious episode to test a father-son relationship that has frayed over the last few years, leaving both men at times not even on speaking terms. And that rift, which has been known only to those closest to the company, has opened up a question central to Rupert Murdoch’s legacy — can one of his children ever take the helm of his $62 billion media giant?
Their disagreements, which were described in detail by more than half a dozen former and current company officials and others close to the Murdochs, stemmed in large part from the clashing visions of a young technocratic student of modern management and a traditionalist who rules by instinct and conviction. The tension grew worse as the gap between the New York headquarters and James’s London operations, where he oversees the company’s European and Asian holdings, proved difficult to bridge.
The elder Mr. Murdoch reached his boiling point last winter, said one of the former officials, and delivered a blunt ultimatum to his son.
“You’re coming back to New York, or you’re out.”
The son consented. But now, as investors place more pressure on the Murdochs to disentangle themselves from the company they have tightly controlled for three generations, his role in the company is under threat. Shareholders will meet on Friday in Los Angeles to decide whether to re-elect the News Corporation board, which includes Rupert, James and Lachlan Murdoch, the eldest son. Though the family holds a 40 percent stake, giving the Murdochs effective control, and most analysts expect them to be re-elected, several large shareholders and a prominent investor advisory firm have recommended voting against them.
James Murdoch, 38, who approved a settlement in 2008 of more than $1 million to help resolve allegations of voice mail hacking at News of the World, the tabloid that News Corporation shut down in July, faces additional pressure back home in London. He is scheduled to testify before Parliament for a second time next month to address questions about the payment, with several ministers suggesting that it was part of an intentional cover-up of the phone hacking.
Within the company, James’s position became tenuous enough at one point this summer that he and other senior executives considered whether he should step aside, said one person with knowledge of the conversations.
Both Murdochs, through representatives, declined interview requests.
Rupert Murdoch, now 80, has long said he hopes one of his children will eventually run the company he built from an Australian newspaper franchise into one of the world’s most powerful and profitable media empires. With his daughter Elisabeth focused on her television production company in London, and Lachlan determined to continue running his media business in Sydney despite the elder Murdoch’s desire to bring him back into the company, James has been the heir apparent. But the hacking scandal and the simmering animosity with his father have destabilized his once inexorable ascent within the company.
“Rupert always thought of News Corp. as a family company because it had been given to him,” said Barry Diller, who helped the elder Mr. Murdoch build Fox into a formidable rival to the traditional networks. “It had been given to him through a tiny newspaper in Adelaide, but nevertheless it was his father’s company. I think that meant to him that tradition should continue. If, as he’s always said, his children were worthwhile.”
Succession Twist
James was not always viewed as the Murdoch who would end up running News Corporation. That mantle, it seemed to everyone inside the company, belonged to Lachlan. James, the youngest of Rupert’s four adult children, was a willful child. When he was served last at dinner, as was the family custom for the last born, James strenuously objected and, according to the Murdoch biographer Neil Chenoweth, repeatedly tried to rearrange the seats around the table.
He attended Harvard, but in 1994 dropped out to start a hip-hop record label, Rawkus, which News Corporation bought two years later.
Bill Carter contributed reporting.
Article source: http://feeds.nytimes.com/click.phdo?i=81e60b72b1e0c29ce7dffaae10992694
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