James Murdoch might be out if Fox sells
Son of media mogul prefers entertainment side of empire, clashes with network’s news
LONDON— For James Murdoch, chief executive officer of 21st Century Fox Inc., a surge in interest from potential acquirers may lay the groundwork for a career reset.
Murdoch has spent years helping build Fox’s international, entertainment and sports assets, from a stake in satellite provider Sky Plc to channels such as National Geographic and Star India — the very holdings now being eyed by Comcast Corp., Walt Disney Co. and others.
At the same time, Murdoch has had his hands full managing a steady barrage of scandals at Fox News, an organization he had technically overseen but had limited control over until recently.
International assets such as Sky and Star India are more in line with his global expertise, according to a person familiar with his thinking.
If Fox sold the entertainment businesses and kept the news channel, James Murdoch would consider parting ways with the company, the person said, asking not to be identified discussing private conversations.
Fox News is the pride and joy of Murdoch’s 86-year-old father, Rupert, who built Fox into a multinational empire and is now contemplating whether to sell off major parts of the business. After being approached by Disney about a potential deal, the Murdochs — Rupert and his sons James and Lachlan, Fox’s executive chair — have been entertaining a breakup of the company because they’ve been frustrated with the market undervaluing their assets, another person familiar with the matter said. If Rupert can get what he thinks the holdings are worth, he’s willing to reshape his empire, the person said. James and Rupert Murdoch declined to comment through a spokesperson.
The discussions of a deal come at a time when James has been contending with more fallout from the sexual harassment scandals at Fox News, whose conservative-leaning commentators also run afoul of his own more liberal views.
The uproar over treatment of women at Fox News, which led to the ouster of network chair Roger Ailes and top TV host Bill O’Reilly, has tainted the company’s takeover bid for Sky in the U.K. The Fox News issues came as a blow to James, surfacing years after the phone-hacking scandal in the U.K. that bruised his reputation.
James would consider moving to Disney or Comcast if those compa- nies asked him to join in a management role, bringing along his expertise in the assets he’s developed, the person said. It remains unclear whether those companies would make such an offer. James could also go off and create his own venture, given his experience in media and technology.
Rupert Murdoch would happily maintain his hold on Fox News, the Fox broadcast network and perhaps sports channels, depending on the deal, people familiar with the matter said last week. Those assets are some of Fox’s most profitable, and Fox News is the most-watched cable news network.
Steven Cahall, an analyst at RBC Capital Markets, valued the assets Disney sought at more than $20 billion (U.S.). The remaining company would be worth about $46 billion, assuming it keeps all of the debt, he said.
It’s possible that no deal materializes and the Murdochs remain in charge of the empire they built together. They’ve said repeatedly that they have the right mix of assets to succeed in the industry. But it’s clear that the traditional media business is under threat. The biggest cable and satellite providers lost more than 400,000 subscribers last quarter alone, even when including gains from their online-only packages, according to Leichtman Research Group. If the Murdochs forge ahead without a deal, they’ll have to find another way to ensure there’s a future for the business James spent much of his career fostering.