Buyers see a cloud
over James Murdoch
Many think Rupert Murdoch's son will be the next major casualty
By Bill Cromwell
Jul 26, 2011
Chief executive Rupert Murdoch will weather the recent outcry over the News of the World phone hacking scandal and maintain his leadership of News Corp.
But the same can't be said for Murdoch's son James, long considered the heir apparent of the media empire his father built up over the past five decades.
James Murdoch is very much in danger of being the next head to roll in the continuously unfolding News Corp. drama, according to media buyers and planners responding to a poll about the scandal posted on Media Life last week.
Asked who will be the next casualty in this scandal, more than a quarter picked James, the head of News International and also the chairman of BSkyB, the British broadcaster that had been the subject of a News Corp. takeover bid until the mushrooming scandal scuttled the acquisition.
James was the second-most-popular answer to the question posed by Media Life. The most popular choice for the next casualty in the scandal was more former editors and reporters at NOTW, at 37.2 percent.
At the least, James is no longer the clear successor to his father. Many believe COO Chase Carey is now the heir apparent.
"The debate has reignited debate about who will take the lead one day with James Murdoch embroiled in the scandal now," noted one reader.
Indeed, the younger Murdoch's future could become more clear this week, as he makes his first appearance before the BSkyB board after being accused last week of lying to Parliament about how much he knew and when he knew about the phone hackings.
By contrast, readers think James' father, the 80-year-old Rupert Murdoch, is relatively safe.
Asked to predict whether Rupert will retain control over News Corp. in the wake of the scandal, 60 percent of readers said he will, while just 40 percent said he will not.
When asked to explain their reasoning, most readers pointed to the fact that Murdoch owns a large share of News Corp. stock and thus pretty much controls his own destiny.
"He has so much power he may be the last exec standing," predicted one reader.
Still, the elder Murdoch has a lot to overcome.
Two-thirds of readers say this scandal is the biggest media catastrophe of at least the past five years, with fully one quarter saying it's the biggest in 10 years and 12.5 percent saying it's the biggest ever.
Just 33.8 percent think the scandal will blow over quickly.
Asked what the fallout from the scandal will be in the United States, most readers think it will be minimal. Just over a third said they anticipate there will be a congressional hearing that generates big headlines and little else.
Nearly 22 percent chose this option: "The FBI investigation will uncover shocking wrongdoing that leads to serious consequences for News Corp. in this country," while 15.4 percent said nothing will happen in the U.S. because the scandal won't reach this far.
Another 12.8 percent said anger against Rupert Murdoch will grow, forcing his resignation, and 11.5 percent said stock prices will plummet in the short term but come back over the next year.
There has already been one consequence stateside, the resignation of Wall Street Journal publisher Les Hinton, a longtime Murdoch deputy. Asked whether the exit of Hinton, the former News International head, had tainted the country's largest-circulation newspaper, 40.5 percent of readers said it had, while 22.8 percent said it had not.
Just under 37 percent were unsure.
The poll also asked what effect if any the scandal would have on News Corp.'s U.S. operations. Some 43.6 percent said it will have no effect, believing Murdoch and his top executives "are moving quickly to insulate his U.S. holdings from the scandal."
Another 30.8 percent predicted "Murdoch will be forced to sell off one or more of his U.S. holdings," while 25.6 percent picked, "He will keep his U.S. holdings but move to tone down the journalism of the New York Post and Fox News."
Despite those seemingly dour predictions, most readers believe there's a good chance News Corp. will recover from the scandal. Asked to predict the chances of that recovery on a scale of 1 to 10, 1 being unlikely and 10 being highly likely, more than half of readers chose a number from 7 to 10.
The largest share, 22.8 percent, picked 7, with 8 second at 15.2 percent. Ten percent apiece chose 9 and 4. Just 3.8 percent, the lowest share of all, picked 1.
"Ultimately this will be viewed as a UK-specific problem and a print media-specific problem," predicted one reader. "News Corp's strongest assets are in television and in the U.S., and those are not affected."
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