James Murdoch to control News Corp. TV divisions

Despite a reputation tarnished by his handling of an extended phone hacking scandal in Britain, James Murdoch is preparing to step into a prominent U.S. role running much of News Corp.’s vast and profitable American based television operations, according to people familiar with the plans.

James Murdoch, the 39-year-old son of media mogul Rupert Murdoch, is expected to take charge of the Fox broadcast network, FX cable channel, regional sports networks, Fox International channels and National Geographic channels — some of the most profitable assets in the $34 billion-a-year media conglomerate.

The younger Murdoch, who relocated to New York from London in the last year, already is the No. 3 executive within News Corp. behind his father and Chase Carey, the chief operating officer. But in the wake of the hacking scandal that engulfed the company’ British newspapers, Murdoch’s profile was significantly diminished. He was called before a committee of Parliament to defend his role overseeing the company’s British operations, including the newspapers at the center of the scandal.

Reporters with News Corp.’s News of the World tabloid hacked into cellphone voice mails of thousands of people, including celebrities and members of the royal family, in pursuit of juicy stories.

Peter Rice, who runs the Fox Networks Group, would report directly to James Murdoch rather than Carey as he does now. During the last nine months, Rice has worked closely with James Murdoch as Murdoch has increased his visits to Los Angeles to get more familiar with the television business.

There is no set time frame for when the move would take place, according to people close to the company. Instead, News Corp. is waiting for London criminal and civil probes related to the phone hacking to be resolved before making such a switch that could be controversial.

On Thursday, News Corp. cleared a significant hurdle in its quest to put the phone hacking scandal behind it. A powerful British regulator found that News Corp. was a “fit and proper” holder of a broadcast license and renewed its permit to run the vast satellite TV operation BSkyB. The regulator, known as Ofcom, found no criminal wrongdoing by either Rupert Murdoch or his son. However, in its report Ofcom issued a scathing critique of the younger Murdoch’s handling of the mess.

Murdoch would not have oversight over two of News Corp.’s most premiere television assets, the Fox News Channel and 27 television stations that reach about 40% of the country. Both of those units will continue to report to Roger Ailes, the powerful chairman of Fox News. Ailes reports directly to Rupert Murdoch, one of only a handful of executives with that arrangement.

News of his Murdoch’s expanded portfolio was first reported by the Financial Times.

The move would resume Rupert Murdoch’s long-held plan to entrust the global media company he built over the last half a century to the next generation of Murdochs. The 81-year-old mogul’s dream to position his children for key positions was abruptly put on hold last year after the British phone hacking scandal exploded into front-page headlines, and James Murdoch’s management of the company’s British operations drew severe criticism and legislative inquiries.

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