News Corp. Said to Weigh Giving James Murdoch TV Role
Murdoch would oversee the Fox broadcast network and cable channels including FX, said the people, who requested anonymity because the deliberations are private. Peter Rice, chairman and chief executive officer of Fox Networks Group, would report to Murdoch, the people said. A decision hasn’t been made, they said.
The 39-year-old son of Chairman and Chief Executive Officer Rupert Murdoch has been seeking a more defined role at News Corp. after moving to New York from London and stepping down from roles heading the company’s U.K. newspapers and as chairman of British Sky Broadcasting Plc. His rise in the corporation stalled amid criticism of his handling of the hacking scandal at the News of the World publication.
“It’s a way to get him back in the game without any regulatory issues,” said Brett Harriss, an analyst at Gabelli & Co. in Rye, New York, who recommends buying the stock. “He’s the heir apparent, he’s not going to be relegated to the sidelines.”
The U.S. cable and television businesses would hand Murdoch much of a portfolio that contributed 41 percent of News Corp.’s revenue in the year ended June 30, and 74 percent of operating income. The Fox News cable channel would remain under Roger Ailes, the people said.
Murdoch was promoted to deputy COO, under President and Chief Operating Officer Chase Carey, in March 2011. The company said in February that he would focus on pay-TV and international television businesses.
The New York-based media company has been trying to move past the scandal. Yesterday, U.K. regulators criticized James Murdoch’s response to the hacking, which has led to arrests, resignations and a series of investigations. Ofcom, the U.K. media regulator and competition authority, said in a report that BSkyB, 39 percent owned by News Corp., could keep its broadcast license.
“We consider James Murdoch’s conduct, including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged,” Ofcom said.
Murdoch resigned as chairman of News International in February, following revelations of the hacking scandal. In April, he stepped down as chairman of pay-TV company British Sky Broadcasting Group Plc (BSY), amid demands that he resign.
News Corp. has announced several management changes since announcing in June plans to split into separate publishing and entertainment businesses. The Financial Times reported yesterday that James Murdoch may gain oversight of television.
In a statement yesterday, News Corp. defended James Murdoch, saying the Ofcom report confirmed there was no evidence of wrongdoing.
“We disagree, however, with certain of the report’s statements about James Murdoch’s prior actions as an executive and director, which are not at all substantiated by evidence,” the company said. The company said he deserves credit for his record at BSkyB during his tenure.
News Corp. competes with Bloomberg LP, owner of Bloomberg News, in providing financial news and information. The company’s Class A shares added 0.6 percent to $25.02 yesterday in New York. They have gained 40 percent this year.
“The U.S. public markets will be extremely disappointed,” said Laura Martin, an Pasadena, California-based analyst at Needham & Co. who recommends buying News Corp. shares. “If his last name wasn’t Murdoch he wouldn’t be considered for this position.”