Rupert Murdoch's son, once his expected heir at News Corp., has stepped down as executive chairman of News International in the wake of a nonstop newspaper scandal at the British publishing unit. What started as allegations of phone hacking at the now-shuttered tabloid News of the World last year has recently metastasized again to include a second tabloid, The Sun, and widespread allegations of bribery. In corporate speak, James Murdoch has "relinquished his position" in the U.K. to "focus on important pay-TV business and broader international operations," now that he resides primarily in New York.
The shift has been in the works for some time. In repeated appearances in front of the British parliament, Murdoch attempted to dodge blame for the phone-hacking scandal that he and other News Corp. brass originally dismissed as a "rogue" occurrence. As the wrongdoing was slowly but surely revealed as systematic, with the practices and subsequent legal settlements approved by top editors and executives, the Murdoch son stayed slippery, avoiding arrest and pleading ignorance.
Still, things couldn't go on this way, with him in charge. A three-pronged British investigation has given way to questions about possible FBI involvement for the U.S.-based company's potential violation of the Foreign Corrupt Practices Act. Rumors have swirled that behind the scenes, top Murdoch execs were urging the patriarch to send James somewhere to simmer for a bit until the scandal died down. It hasn't, and now James has been plucked from the action for that "breather."
James is known to prefer the television side of things anyway, while the troublesome newspapers are simply the apple of his father's eye. But the executive chairman post was more about succession, a process that became extremely complicated last year as the accusations began bubbling up. James taking more of a backseat has been a long time coming, but whether it will make way for a corporate comeback or a slow, permanent retreat from the family business might depend on how much worse things get. They seemed to be slowing some, but now it looks like we might not yet have seen the end.