James Murdoch is being lined up to take direct responsibility for News Corp’s U.S. television businesses, even as his record in the UK was attacked by media regulator Ofcom.
The Financial Times has learnt that News Corp is preparing to expand Murdoch’s role to include responsibility of the Fox Networks Group following the publication of the Ofcom report.
The report on whether British Sky Broadcasting , the UK media group in which News Corp owns a 39.1 per cent stake, was “fit and proper” to hold a broadcasting license heavily criticized Murdoch, saying his “conduct in relation to events at News Group Newspapers repeatedly fell short of the conduct to be expected of him as a chief executive officer and chairman”.
But the report ultimately cleared Murdoch, saying that “evidence available to date does not provide a reasonable basis to conclude that James Murdoch deliberately engaged in any wrongdoing”. Ofcom also stopped short of forcing News Corp into an unwelcome sale of its BSkyB stake, ruling it was a fit and proper license holder.
Under the role being discussed between News Corp and Murdoch, Peter Rice, the Los Angeles-based head of News Corp’s Fox Networks Group, will report directly to Murdoch, currently the deputy chief operating officer at the company.
Fox Networks includes the national Fox network, as well as cable channels such as FX and National Geographic. It does not include News Corp’s Fox News Channel.
Murdoch had pressed for his expanded role to be announced in July, when Rice was promoted to run Fox Networks, according to several people close to the situation. But Rupert Murdoch — his father and News Corp’s chairman — and Chase Carey, the company’s chief operating officer, resisted.
People close to the company differed over when Murdoch’s new operational responsibilities would be formalized: one told the FT that a deal had been done but another said News Corp “would not consider giving Murdoch an expanded role until there is a better idea about what will happen in London”.
News Corp is still awaiting the outcome of three separate Metropolitan Police investigations into phone hacking, payments to public officials and alleged computer hacking. The probes have led to a series of arrests of current and former employees of News Corp’s UK newspaper arm. But the publication of the Ofcom report clears a significant hurdle for Murdoch and is seen internally as a victory for the company.
It is unclear what Murdoch’s job title or other responsibilities will include but people close to the situation said he would not move to Los Angeles, where Fox’s TV business is located. However, he has been spending more time recently in Los Angeles working with the Fox channels group, said people familiar with the matter.
News Corp declined to comment on the expansion of James Murdoch’s role to include its US TV businesses. However, in a statement the company acknowledged the Ofcom report. “We are pleased that Ofcom recognizes BSkyB as a fit and proper holder of a broadcast license,” it said.
It added that Ofcom’s criticism of James Murdoch was “not at all substantiated” by evidence.
Ofcom’s criticism of James Murdoch raises the stakes for News Corp’s shareholder meeting in Los Angeles next month: at last year’s meeting he faced a big protest vote following his conduct over the phone-hacking scandal.
In May, a UK parliamentary committee declared Rupert Murdoch “not fit” to lead an international media company, in a damning report that criticized News Corp’s handling of the phone-hacking scandal. However, the committee split six to four on party lines.