NEWS CORP moved to distance James Murdoch from its scandal-hit British newspapers, announcing yesterday that he would step down as executive chairman of News International, its UK press business.
For the first time since Rupert Murdoch bought into the UK newspaper market in 1969, no member of his family will have any direct role in the management of News Corp's UK press assets, which include the Times, the Sunday Timesand the Sun.
Two senior British politicians linked the resignation of the media tycoon’s son to the bad publicity surrounding police and judicial inquiries into illegal journalistic techniques.
Don Foster, a spokesman for the Liberal Democrat party on media, said that the younger Mr Murdoch’s move “has all the appearances of being bundled in a car, away from the scene of the crime”.
He said that News Corp must “make clear that his move to New York will not be a barrier to getting answers and his taking responsibility for what happened on his watch”.
News Corp investors have already raised the prospect of selling or hiving off News International in conversations with Chase Carey, Mr Murdoch’s number two, but analysts doubt this would have any demonstrable effect in insulating the group from the bad publicity.
Tom Mockridge, chief executive officer of News International, will continue in his post, but report directly to Mr Carey, chief operating officer.
A barrage of damaging revelations about the Sunnewspaper have put Mr Murdoch's UK newspapers back in the spotlight.
This week, the police officer leading an investigation into bribery by journalists at News International said that the Sunhad a culture of corrupt payments to a network of public officials that was authorised at a senior level.
Mr Carey said this week that he was taking seriously arguments put to him and the board by some investors in favour of selling the newspaper business.
Harriet Harman, the Labour party's deputy leader, said that James Murdoch "had no option but to go" given the continued allegations of phone hacking by the News of the World, which was closed down last year, and corrupt payments by the Sun.
“We won’t miss him,” said a News International insider who asked not to be named. “His contribution to dealing with this whole (hacking) issue has been unimpressive at best, as well as his lack of ability to see what was going on himself and to do anything about it.”
James will remain deputy chief operating officer of News Corp with a focus on its international TV business, a New York-based post he was promoted to last year.
Analysts said the move was unsurprising in one sense because Rupert Murdoch would be keen to distance his son from the troubles in London.
“It makes sense to get James as far away from News International as possible, if he is to have any hope of re-establishing his position in the company,” said Steve Hewlett, a London-based media analyst. “The more revelations there are about phone hacking, the sharper the focus on what he knows or didn’t know will become. – Copyright The Financial Times Limited 2012