shares held steady Friday as investors mulled over the surprise departure of Lachlan Murdoch.
Murdoch, the 33-year-old son of CEO Rupert Murdoch and deputy operating chief at the New York media titan, said he'd
leave his duties to return to his native Australia with his family.
Lachlan Murdoch has held the post of deputy chief operating officer of News Corp. since October 2000. The resignation is effective Aug. 31, though Murdoch will remain on the board and serve as an adviser. Rupert Murdoch said in the News Corp. statement he was "saddened" by the move.
The loss of Lachlan Murdoch isn't necessarily a huge blow in and of itself to the big media company, considering its extensive management depth. News Corp. operating chief Peter Chernin is seen as a strong executive, and his name has come up in the past as CEO vacancies have emerged at rivals like
. Lachlan's brother James runs the highly successful BSkyB satellite TV division of News Corp. in the U.K., while their sister Elisabeth left News Corp. years ago to run her own TV production company in London.
But Friday's move did reignite succession questions about 75-year-old Rupert Murdoch, as well as speculation about the motives of big News Corp. shareholder and
chief John Malone.
A Merrill Lynch report Friday said the firm expects Chernin to take over Lachlan Murdoch's responsibilities, and that the impact on the company should be minimal. In her note, media analyst Jessica Reif Cohen said she believes James Murdoch becomes the heir apparent.
"However, this remains a very long-term issue, as we continue to expect Mr. Chernin will take the helms of the company when Rupert Murdoch retires," Cohen wrote. "James, who has also ran News Corp's StarTV in Asia, should eventually take control, but not until Mr. Chernin decides to leave the company and/or the board deems him 'ready.'"
The notoriously hard-charging Malone shocked Wall Street last year by quietly doubling his stake in News Corp. to 17%. The move seemed to unsettle Rupert Murdoch, and News Corp. responded by adopting a so-called poison pill plan aimed at preventing any further accumulation by Malone.
Malone subsequently said all the right things about seeing Murdoch as a partner. Liberty CEO Dob Bennett said in November that Liberty was increasing its voting stake not because of any unfriendly intentions toward News Corp.'s management, but because Liberty had seen an opportunity to buy voting shares cheaply, and pay for them with nonvoting stock the company expected to increase in value.
Still, some observers have continued to scratch their heads over the episode and the next logical step between the companies.
On Friday, News Corp. shares were down 11 cents at $17.46.