The younger Murdoch will move from London to New York and remain a senior executive with New York-based News Corp., which owns the Wall Street Journal, Fox News and other media and entertainment properties, the company said. But his surprise resignation from British-based News International, which operates the Sun tabloid and Times of London newspaper, suggests that the phone-hacking allegations that engulfed the division last year are continuing to resonate.
Murdoch, 39, has widely been thought of as his father’s heir apparent at News Corp., which Rupert Murdoch built into a globe-straddling behemoth since inheriting two ailing Australian newspapers from his father in the early 1950s. James Murdoch has served a long apprenticeship under his father, moving successfully through several News Corp. divisions. Most company watchers thought he had eclipsed his older brother, Lachlan, and sister Elisabeth, both of whom have served in the company, as the next in line (a fourth child, Penelope, from the first of Murdoch’s three marriages, hasn’t been involved in the company).
But the Harvard-educated James Murdoch has been struggling to contain the damage from the hacking scandal ever since he took over the chairmanship of News International in 2007. For several years before his arrival, reporters and private investigators at the News International-owned tabloid News of the World intercepted private phone calls and messages to British celebrities, politicians and newsworthy individuals, including a young girl who had been kidnapped and later found murdered.
The paper’s newsgathering methods also included bribing officers of Scotland Yard for information about ongoing investigations. A more recent government inquiry has exposed what a police official called “a culture of illegal payments” to government officials by executives and journalists at the Sun, Britain’s most popular newspaper.
News Corp. closed the News of the World last summer as the extent of its activities came to light. The scandal has led to more than a dozen arrests, several criminal convictions, millions of dollars in private settlements for victims and the resignations of top News International executives, including James Murdoch’s predecessor, Rebekah Brooks.
A lingering question is whether it has fatally damaged James, who has long maintained that he was unaware of the extent of the corruption within his organization.
James remains his father’s “preferred successor,” said Ian Hargreaves, a media expert at Cardiff University in Wales. “He thinks he is the right person and nothing that has happened so far in the U.K. newspaper scandal has deflected him from that view.” Removing James from the turmoil in London to take on an undefined role in News Corp.’s global television business — the company’s core business — indicates that James still has his father’s confidence, Hargreaves said.