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The big succession question at News Corp has been answered, for now at least. No, not the endlessly discussed matter of whether Lachlan, James or Elisabeth Murdoch will one day take the reins from their 81-year-old father, Rupert.
The less asked but more pressing question has been who could possibly follow Roger Ailes, the polarising genius behind Fox News, whose ability to charge cable and satellite distributors ever growing carriage fees has driven the recent growth in the Murdoch empire.
The cable networks division that Fox News spearheads made $3.3bn in operating profit last year. But Mr Ailes is 72, and his contract was due to come up next June, raising the question of who else could maintain its unique brand of polemic and keep the market leader on top.
Thankfully, News Corp has found someone to fill his shoes: Roger Ailes. A new contract will keep him at the network until after the 2016 presidential election.
Other news organisations have been grappling with the succession question. Jim Walton, CNN’s president, is stepping down at the end of the year after tripling earnings but failing to reverse a ratings decline. Analysts struggled to think of choices to succeed him, and a protracted search suggested that Time Warner, CNN’s owner, was having similar trouble. It has reportedly picked Jeff Zucker, who ran all of NBCUniversal before Comcast took over.
CNN is hardly alone in the media sector as it struggles to find internal leadership candidates. Companies from the magazine sector to the music business have picked up the habit of looking outside when they have a vacancy at the top: after a decade of digital disruption, too few media executives have unblemished records of success or foolproof recipes for the future.
More common is to hear boards ask whether Google, Apple or some other tech company might have someone who could walk in and give their struggling media company instant digital credibility. Houghton Mifflin Harcourt hired Linda Zecher from Microsoft last year and McGraw-Hill this year picked Buzz Waterhouse, an IBM veteran, to run the education business it is now selling.
Pearson, owner of the Financial Times, Penguin and education businesses, has chosen John Fallon, a long-term insider, to follow Dame Marjorie Scardino after 16 years as chief executive officer. But there have been few simple internal successions in media, not least in hard-hit print publishers.
Mr Murdoch turned to executives from News Corp’s pay-television businesses to run his UK and Australian newspapers and is about to name a head of the publishing company they sit within. The New York Times had to look across the Atlantic to find its new chief, only for Mark Thompson to become the focus of investigations into events on his watch as director-general of the BBC. His successor at the BBC lasted 54 days.
Jack Griffin lasted less than six months at Time Inc, Time Warner’s magazine arm, after a clash of styles. Jeff Bewkes, Time Warner’s CEO, then hired somebody who, like Mr Thompson, had no print experience, choosing Laura Lang for the digital advertising understanding she had gleaned running Digitas, part of Publicis.
Unsurprisingly, boards with successful CEOs are reluctant to let them go. Maurice Lévy, Publicis’s CEO, extended his contract in 2010 and Mr Bewkes has just signed a deal to stay at Time Warner until 2017. This is looking like a trend: in October, Walt Disney asked Bob Iger to stay on as CEO until 2016 and CBS gave Les Moonves an extension until 2017. All are successful, but this hardly indicates that boards are working hard to develop a new generation of digital leaders.
The media sector has always had specific challenges, from the prevalence of controlling families to the need for CEOs to understand both commercial and creative imperatives. But if succession problems persist, they will have costly consequences, weakening investor confidence. The challenge for media boards and investors is to improve internal succession planning. Hoping that one person can do everything expected of a modern media CEO may be unrealistic. Splitting the chairman and CEO roles makes good sense in any sector but media companies also need more digital deputies and chief operating officers who can bring needed new skills while rounding out their experience to be ready for the top job.
Meanwhile, fans of News Corp succession speculation can look forward to it being split next year. Its entertainment and publishing arms will need two executive teams and two boards. If Mr Murdoch wants to double down on his bet on family succession, he could put Lachlan on one and James on the other.
Andrew Edgecliffe-Johnson is the Financial Times’ media editor
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