Media mogul Rupert Murdoch has stepped down as the controlling shareholder of 21st Century Fox (NASDAQ: FOXA). The 84-year old chief executive officer will be handing his title to his son James Murdoch, former chairman and chief executive of News Corp. (NASDAQ: NWSA) Some have described the change as merely a “title change,” since media giant Rupert Murdoch will be handing over day-to-day responsibilities of his media empire to his son, he will remain executive co-chairman with his other son, Lachlan Murdoch, and will have the final say.
But this title change is one that will greatly affect the media industry. As a part of the upper management reorganization at Fox, COO Chase Carey will step down from that role and take up an advisory position. Carey will most likely stay in some capacity through 2016. With Carey’s stepping down as COO, the company will be left without a member of senior management outside of the Murdoch family for the first time.
The next major question for the company is what will happen to Roger Ailes, the leader of Fox News, one of the most profitable cable networks on the air.
Roger Ailes had previously reported directly to Rupert Murdoch, and had been close allies with Carey. His relationship with James Murdoch will be quintessential towards the passage of Fox down the Murdoch family.
Currently Wall Street values Fox News at $15 billon, and expects it to bring in $2.18 billion this year in advertising and affiliate revenue. It contributes almost 20% of 21st Century Fox’s total profits, and had 70 consecutive quarters of profit growth. It brings in $1 per subscriber per month, relative to CNN’s $0.61 and MSNBC’s $0.30. The contract of 75 year-old Ailes will expire in 2016, and will be up for renewal.
Rupert Murdoch controls 39.4% of 21st Century Fox’s voting shares, and his role as chairman of both Fox and News Corp will not change. However this is a sign that the next generation of Murdochs is ready to lead.