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The fallout for Fox as Rupert Murdoch prepares for his eventual departure




News Corp. CEO Rupert Murdoch pauses as he delivers a keynote address at the National Summit on Education Reform on October 14, 2011 in San Francisco, California. Rupert Murdoch was the keynote speaker at the two-day National Summit on Education Reform.
News Corp. CEO Rupert Murdoch pauses as he delivers a keynote address at the National Summit on Education Reform on October 14, 2011 in San Francisco, California. Rupert Murdoch was the keynote speaker at the two-day National Summit on Education Reform.
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For a little bit Thursday, it seemed like the biggest news surrounding 21st Century Fox might be the upcoming separation between Marge and Homer Simpson. However, that was quickly overshadowed by news surrounding Rupert Murdoch, the head of the company.

The elder Murdoch has begun the plan for his succession at Fox and News Corp., which involves his two sons — 42-year-old James Murdoch will become CEO of 21st Century Fox, and 43-year-old Lachlan Murdoch will become co-executive chairman of the company along with his father. Rupert will continue to have a strong hand, but this is clearly a big step in the company’s succession plan.

Joe Flint, a media and entertainment reporter for the Wall Street Journal (also part of the Murdoch media empire), joined us to talk about Rupert Murdoch's direct involvement with Fox's TV and film holdings, the future of the Fox network and the two familial successors to Fox and News Corp.

Interview Highlights:

We know Rupert Murdoch is very involved in newspapers, but is he as hands-on with TV and film production in the studios there?

He is hands-on and there are things he gets involved with. The first thing that comes to mind is the Fox News Channel, which he was very instrumental in launching and putting Roger Ailes in there to run it. Obviously, that channel has come to reflect a large view of the company.

On the movie and TV side, he does get involved — on the movie side, Stacey Snider was brought in from Dreamworks to work at the studio along with Jim Gianopulos, and our understanding is that was a move that Mr. Murdoch was very involved in making happen.

On the television side, one of his top lieutenants is Peter Rice, who's often described as the fifth Beatle — that's how close he is to Rupert. It's not unusual that Rupert shows up to the scheduling meetings before they're going to lay out the schedule, so yeah, he's hands-on.

I talked to someone this morning who's worked there a long time, and he said that they hire people they expect to do their jobs, but that doesn't mean they don't come in and offer their thoughts or debate things.

In early May, the company reported a decline in quarterly income, largely because of the struggles at the Fox Broadcast Network, as well as higher sports costs, even as Fox was doing pretty well in movies and on cable TV. On television, how has Fox been doing?

The Fox network has been struggling for the last few years for a variety of factors, the most obvious one being that they haven't created too many hits lately. "American Idol," which served them well for many years, has no longer, and next season will be its last. And that has hurt the network, because it became a very expensive show to produce, and the returns there weren't were what they once were.

They got a bright spot at the end of the season with "Empire," which became the most-watched new drama of the season. It did huge numbers and they're banking on that show to help a renaissance, but they've had a lot of challenges developing hit comedies in particular.

This fall, they've got a comedy starring John Stamos and a comedy starring Rob Lowe, and they seem to be going a little more male-centric after their other comedies "New Girl" and the Mindy Kaling show, so I think they're trying to go a little broader than they had been.

Let's talk briefly about the two sons that are coming up, Lachlan Murdoch and James Murdoch. What are their strengths, what are their reputations and what will each be doing?

We'll find some of that out as we go along, but James Murdoch has been a lot more involved in the company's operations for the last several years. James went to Harvard and initially was seen as the one who wasn't eager to follow into the family business — he tried the music business for a while, and then ended up going into the family business.

Obviously, the big thing that he got caught up in and now has survived was the hacking scandal in England. It was not a good moment for the company, not a good moment for him and not a good moment for his father.

He did not emerge from that unscathed — there are a lot of questions about his operation skills, whether he was hands-on enough and what role he had in all of it. They sent him back to the U.S., not only to rehabilitate his image but also to get him more familiar with the operations here. For better or worse, his father's been very loyal to him.

Lachlan was initially seen as the ultimate successor, and for a while held some senior positions at News Corp. when it was still just one company. But he bumped up against Roger Ailes as well as Peter Chernin, who was the number two to Murdoch at that time, and Lachlan left and went back to Australia, worked on various media ventures of his own, and now he's back and we'll see how involved he's going to be. He's going to relocate out to Los Angeles and so far, at least as far as I can tell, hasn't really made his presence felt inside the network or the studio, but that may change.



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