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In Murdoch spat, the heir becomes less apparent

business Updated: Oct 20, 2011 01:11 IST
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It was a striking display of unity: Rupert and James Murdoch, father and son, walking side by side through central London as they faced a crisis that had laid siege to their company. Pushing through a crush of paparazzi on a street not far from Buckingham Palace, James reached out to place a reassuring hand on his father's back.

But behind that facade, the disclosure of widespread phone hacking at News Corporation's British newspaper division was only the latest and most serious episode to test a father-son relationship that has frayed over the last few years, leaving both men at times not even on speaking terms. And that rift, which has been known only to those closest to the company, has opened up a question central to Rupert Murdoch's legacy - can one of his children ever take the helm of his $62 billion media giant?

Their disagreements, which were described in detail by more than half a dozen former and current company officials and others close to the Murdochs, stemmed in large part from the clashing visions of a young technocratic student of modern management and a traditionalist who rules by instinct and conviction. The tension grew worse as the gap between the New York headquarters and James's London operations, where he oversees the company's European and Asian holdings, proved difficult to bridge.

The elder Murdoch reached his boiling point last winter, said one of the former officials, and delivered a blunt ultimatum to his son.

"You're coming back to New York, or you're out."

The son consented. But now, as investors place more pressure on the Murdochs to disentangle themselves from the company they have tightly controlled for three generations, his role in the company is under threat. Shareholders will meet on Friday in Los Angeles to decide whether to re-elect the News Corporation board, which includes Rupert, James and Lachlan Murdoch, the eldest son. Though the family holds 40%, giving the Murdochs effective control, large shareholders and a prominent investor advisory firm have recommended voting against them.

Rupert Murdoch, now 80, has long said he hopes one of his children will eventually run News Corp. With his daughter Elisabeth focused on her television production company in London, and Lachlan determined to continue running his media business in Sydney, James Murdoch, 38, has been the heir apparent. But the hacking scandal and the simmering animosity with his father have destabilised his once inexorable ascent within the company.