KEY POINTS:
Rupert Murdoch's younger son James is to return to News Corp to head its Asian and European operations, cementing his position to eventually take over the global media empire.
Murdoch, 34, will become chairman and chief executive of Europe and Asia at News Corporation, taking charge of its broadcasting, print and internet divisions including Hong Kong-based Star TV, Britain's Sun newspaper and Sky Italia.
He will rejoin the News Corp board and step down as chief executive of Britain's pay-TV firm BSkyB, but remain with BSkyB as non-executive chairman, replacing his 76-year-old father Rupert. BSkyB finance director Jeremy Darroch will become chief executive.
News Corp's announcement on Saturday is part of a wider shake-up the media empire, which spans newspapers, film studios, satellite television services and internet properties such as MySpace.
Some investors are betting James Murdoch, who has repositioned Sky to cope with the ever-changing media environment, can do the same in challenging areas of the company like China.
"The biggest problem has been Star TV and China. They've changed strategies a bunch of times," said Larry Haverty, a portfolio manager at News Corp investor Gabelli & Co. "There's work to be done for James in the area. It gives him a chance to fill in his resume."
Consolidating management in Europe and Asia is seen as improving the growth outlook for News Corp, which already generates about 50 per cent of its revenue outside of the United States, UBS analyst Michael Morris said.
James Murdoch, who served on the News Corp board from 2000 to 2003, will report to Peter Chernin, News Corp's president and chief operating officer. He will be based in London, taking up his role immediately.
"James is a talented and proven executive," his father Rupert said in a statement. "He has transformed Sky."
Rupert Murdoch's older son, Lachlan, 36, had initially been seen as the leading contender during his time at News Corp but he left the group in 2005 to start a new venture.
Murdoch's daughter Elisabeth, 39, has also been viewed as a dark horse candidate over the years. The former managing director of Sky Networks struck out on her own in 2000 and launched her own TV production company.
"This is grooming James for a larger role longer term at News Corp," Pali Research analyst Richard Greenfield said. "He has proved himself beyond a doubt over the last several years at BSkyB."
James Murdoch joined Sky in November 2003 and has expanded the company from its pay-TV roots to add broadband and telephony services. News Corp owns 39 per cent of the company.
But like his father, he has proved to be a risk taker.
He has also drawn the attention of regulators, leaving the group engaged in three separate investigations and a law suit with fierce rival Virgin Media.
- Reuters
