Murdoch son to lead News Corp Asia, Europe--source

NEW YORK - Rupert Murdoch's younger son James will take over News Corp's Asian and European operations, according to a source familiar with the matter, in a move that appears to position him as the global media empire's heir apparent.

James Murdoch, 34, will step down as chief executive of satellite television operator British Sky Broadcasting Group Plc and become its nonexecutive chairman. BSkyB's Chief Financial Officer Jeremy Darroch is expected to get the CEO job, the source said on Thursday.

In his new role, James will control News Corp's international broadcasting, print and Internet divisions from Asian satellite television operator Star TV to Sky Italia.

"This is grooming James for a larger role longer term at News Corp," Pali Research analyst Richard Greenfield said. "He has proved himself beyond a doubt over the last several years at BSkyB."

His return to News Corp addresses long-held investor concern over who will take over the media and communications conglomerate from the 76-year-old mogul.

Rupert Murdoch's older son, Lachlan, 36, was once a top executive at News Corp and viewed as the heir apparent, but he left the company in 2005 to start a new venture, Illyria.

Like his father, who built one of the world's biggest media companies from two newspapers in Australia, James Murdoch has a reputation for being a risk taker and aggressive deal maker.

Although accused of nepotism in 2003 when he was named CEO of BSkyB, James has gotten high marks from analysts and shareholders for expanding the company from a TV service into broadband and digital phone services.

But his competitive style has also made him a target of regulators. He leaves BSkyB engaged in three regulatory investigations, including one by Britain's Competition Commission for the company's 2006 purchase of a 17.9 percent stake in commercial broadcaster ITV. The Commission has said the stake restricts competition.

BSkyB is also engaged in legal action with Virgin Media Inc , its nearest pay TV rival, over basic channels. News Corp owns a 39 percent stake in BSkyB.

SAME CLOTH

The news of the changes, which were first reported on the Guardian's Web site, comes a week before News Corp closes its $5.6 billion deal to buy The Wall Street Journal publisher Dow Jones & Co Inc.

Tall and smoothly charming, James Murdoch had played a key role during strained negotiations with Dow Jones's controlling Bancroft family, fanning speculation then that he would be his father's successor.

Rupert's daughter Elisabeth, 39, was also once considered a leading candidate because of her reputation as a shrewd media deal maker and role as a former managing director of Sky Networks. She left the company in 2000 and set up her own TV production company, Shine.

James's penchant for speaking his mind has gotten him in hot water on occasion, like his father.

A year ago, James launched a blistering attack on the British broadcasting industry and the publicly funded BBC in particular, accusing it of megalomania. In a speech in London, he appealed for less regulation and a free market.

"The triumph of the free market surely indicates that broadcasting should be more like other industries," he said on Nov. 30, 2006.

But broadcasting in Britain was still not sufficiently free-market, he said. "Indeed, the UK's main state broadcasting agency, the BBC, famously fantasizes about creating a 'British Google' -- and wants the taxpayer to fund it.

"This is not public service; it's megalomania," he said.