Discussion of Fox's succession plans for Murdoch, 84, have intensified amid a stock that has dropped 15% in 2015 as its flagship network has struggled for ratings and revenue. Murdoch, 84, who founded the broadcast, cable and film company originally as News Corp., has mostly hinted that he would prefer to pass its reigns to one of his children. James, 42, his youngest son, has shared the position of chief operating officer with Chase Carey.
But with James Murdoch's promotion to CEO, Carey has apparently lost an internal power struggle though he reportedly will remain at the company yet in an advisory role, CNBC said. Lachlan Murdoch, 43, Rupert's oldest son, will become a co-executive chairman of Fox, working with James to run the company, CNBC anchor David Faber reported. Both James and Lachlan as well as Carey are members of Fox's board of director.
"It has been pretty clear all along that Rupert has intended to hand the company over to James at some point," Doug Creutz, a media analyst at Cowen & Co. said in an investor note. "We have always viewed Rupert as an empire builder who is more concerned with accumulating assets than with delivering shareholder returns. James does have extensive operational experience, and could turn out to be a good or even great CEO who is more sensitive to shareholder concerns than Rupert was."
An official announcement is expected in the near term though it remains unclear when the changes would take place, CNBC reported. Fox, in statement, said that "The matter of succession is on the agenda at our upcoming, regularly scheduled board meeting."
Shares of New York based Fox were slipping 0.2% to $32.90.
James Murdoch's duties at Fox have steadily increased in recent years, and he has often represented the company at investor forums as often as Carey. At present, James Murdoch has direct responsibility for Fox's global television business, including the Fox Networks Group as well as its European and Indian operations, BSkyB, Sky Deutschland, Sky Italia and STAR India.
Carey, meanwhile, is entering the second year of a two-year contract extension that he signed a year ago. The extension, which was only half the length of his previous four-year contract, lasts through June 30, 2016. Carey has the right to leave as early as the end of 2015, a timetable that may fit with James' promotion.
In assuming the CEO position, the younger Murdoch will be tasked with trying to figure out how to bolster ratings and advertising revenue at the Fox network, which sits in a distant fourth place among the four major U.S. networks. Apart from its program Empire and Gotham, Fox has failed to generate a compelling schedule at a time when viewers, especially younger viewers, are embracing to any number of online video platforms.
Carey's departure from the senior ranks of Fox will leave the company's leadership without someone outside of the Murdoch family. Carey replaced Peter Chernin, who departed as New Corp's operating chief in 2009. 21st Century Fox was created in 2013 when News Corp was split into two companies with Fox retaining its television and film units and the News Corp retaining its legacy print businesses.
TheStreet Ratings team rates TWENTY-FIRST CENTURY FOX INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TWENTY-FIRST CENTURY FOX INC (FOXA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels, expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
You can view the full analysis from the report here: FOXA Ratings Report