James Murdoch: can the son rise again in New York City?
For some shareholders, James quitting NI is not enough - they want him out of News Corp too
RUN OUT of London, can James Murdoch rebuild his shattered reputation in New York? The day after the 39-year-old second son of Rupert Murdoch resigned as chairman of News International, the family conglomerate's London newspaper arm, speculation is raging over both his future and the future of the media empire.
There is no doubt that James's career as heir in charge of Murdoch's beloved UK newspapers is dead. But, in typical Murdoch fashion, the entrails can be read in more than one way.
Crispin Odey, whose fund Odey Asset Management owns 2.4pc of BSkyB and who was once married briefly to Rupert Murdoch's elder daughter Prudence, told The Daily Telegraph that the next move will be James's resignation as BSkyB chairman. Another fall.
"It's starting to feel that way," Odey said. "There is definitely change afoot. They'd have to do something pretty drastic to turn things around and I'm not sure if they can."
But what can James really do in New York? Hyper-ambitious, can he eventually rise to the top of News Corp, the mothership of empire?
A Manhattan-based media executive told The Guardian that the idea of James running any significant part of News Corp's US business was ridiculous.
"There's too much trouble hanging over his head," he said, speaking anonymously. "It would have been easier to let him go. Looks like Rupert is getting sentimental."
Already institutional shareholders are stepping up their campaign to have James thrown off the News Corp board. Julie Tanner, of the New York-based Interfaith Center for Corporate Responsibility, which holds News Corp stock, told Australia's ABC News that James Murdoch's departure from News International was not enough to placate anxious shareholders.
"It's a good step," she said, "but it's a small step and it doesn't really address the corporate governance concerns that we have for the company."
Change To Win, which advises pension funds with more than $200bn in assets, wants James to resign from News Corp and from Sotheby's, the auction house where he holds a directorship.
Here in New York, the Murdochs' London drama is always seen through the filter of its potential consequences at News Corp. The bottom line is the possibility of a Murdoch or other senior executives being charged under the Foreign Corrupt Practices Act, which could disbar them from holding US broadcasting licences. The Department of Justice is already investigating.
Labour MP Chris Bryant, who received a £30,000 pay-out after having his phone hacked by the News of the World, greeted James's resignation during a debate in Westminster Hall yesterday by calling for him to quit BSkyB too because "he is not a fit and proper person".
For a Murdoch with a role in the company to be deemed "not a fit and proper person" by American regulators is News Corp's worst nightmare.
James's fall has "clarified" the power of Chase Carey, the American television executive who is President of News Corp, number two to Rupert Murdoch, and favoured by US investors to push aside all Murdoch heirs for the top job. News Corp's shares closed the highest for a year last night on James's resignation from NI.
Carey now talks of hiving-off all newspaper business from News Corp. "There certainly is an awareness", he told a Deutsche Bank media conference in Palm Beach, Florida, on Tuesday, that News Corp "would trade at higher multiples if it didn't own newspapers".
Carey has become the family consigliere as the Murdochs sink deeper into a soap opera to rival Dallas or, as MP Tom Watson, who described James as a Mafia boss presiding over a criminal enterprise, might put it, The Sopranos.
When Murdoch showed up in Wapping to launch his new Sun on Sunday, it was older son Lachlan, only recently in exile with his own enterprise in Australia, who was by his side.
Odey told the Telegraph that James's resignation was a clear signal that James was out of favour at News Corp. "This is coming from the inside, not the outside," he said. "They've switched the backing, so Lachlan climbs up and James climbs down."
Or is it as simple as that? Some see a counter-intuitive plot line.
Time magazine points out that while Rupert Murdoch has "ink in his blood", James has never shared his enthusiasm for newspapers. He is focused on the new order of broadcasting and digital media, and his move to New York headquarters might actually be a move closer to the centre of power. "He'll also be where the money is," wrote Time, "a thrilling prospect for someone who perspires ambition."
Michael Wolff, who wrote the Murdoch chronicle The Man Who Owns the News, warned this week that it is too soon to write-off any Murdoch, and that the priority is to outfox the American regulators to keep the broadcast licences.
"Murdoch, let us remember, has an uncanny instinct for how to get the other guy to blink," he wrote in the Guardian, the day before James's resignation from News International. "That, at the moment, is Rupert's gamble."
James's retreat to New York is, more than anything, a Murdoch card in play.