The Murdoch family’s simmering, succession-laden love-hate relationship erupted into an open war on Wednesday when Chase Carey revealed he would quit as Rupert Murdoch’s No 2 next year and called James Murdoch unfit to lead 21st Century Fox.
Chase Carey, a top executive at 21st Century Fox, has long been seen as Rupert Murdoch’s most trusted lieutenant, but he threatened to quit the company after its board of directors gave its backing to James, the brother of the 81-year-old mogul’s 39-year-old wife, Jerry Hall.
He told Business Insider he would leave Fox as its chief operating officer after the 2015 profit report.
Carey’s departure was announced the same day that a family feud between James and 21st Century Fox’s independent directors led to the removal of the director James Murdoch. James Murdoch and fellow Murdoch powerbroker James Rasulo were removed by a five-member independent committee at the conglomerate’s annual general meeting on Wednesday.
A group of investors had wanted to have the independent committee dismissed entirely.
But that conflict was merely the beginning of a developing family war between the Murdochs and the independent directors who oppose them.
James Murdoch abruptly stepped down from the board of the satellite broadcaster British Sky Broadcasting Group (BSkyB) after being told he wasn’t suitable to continue at the helm, BSkyB said on Wednesday. The independent director Keith Hellawell said Murdoch wasn’t fit to lead BSkyB.
In 2016, Hellawell helped remove Murdoch as chairman of BSkyB by submitting a complaint about him to the UK media regulator, the Office of Fair Trading. On Thursday Hellawell said his decision to remove Murdoch from BSkyB’s board was based on “personal considerations”.
“It was an independent director’s decision to remove Mr Murdoch from the board,” Hellawell said in a statement, adding that he had nothing to do with the reports that the Murdochs faced official inquiries in the UK over the phone-hacking scandal at News Corp’s UK tabloids.
Murdoch stepped down as chairman of BSkyB on 9 February this year, later appearing at the House of Commons culture, media and sport select committee to answer questions about the scandals and breaking up the media empire in the wake of the scandal.
The Murdoch family’s dispute with the directors centres on the 33% stake Fox owns in Sky.
When the company bought Sky back in 2011 for $12.4bn, it was forced to offer up to $7.8bn worth of Fox stock in order to convince European regulators to OK the acquisition.
Pressed by ITV on the subject of he Murdoch family’s moves to demerge Fox, Carey said there was no real pressure from the board but conceded “there are issues,” before added: “From the corporate governance perspective that would cause [Murdoch] to have more independent directors.”
Carey also said James Murdoch was not fit to lead the company because he had misled the board about his knowledge of the phone-hacking scandal at News Corp’s UK tabloids. “James Murdoch should no longer be leading this company,” Carey said.
On Wednesday, Fox shareholders ousted James Murdoch from its board, according to a Reuters report. The vote came just one day after the son of Rupert Murdoch stepped down as chairman of BSkyB over “personal reasons.”
James Murdoch has an unpopular relationship with many of Fox’s independent directors, including Hellawell, who were seen as dissenting voices on the board. James Murdoch and Rasulo clashed with Hellawell over his decision to contact regulators in the UK about his concerns about his own director’s support for the conglomerate’s senior executives.
James Murdoch apologized for “misstatements” he made about whether he had been told by executives of the allegations against News Corp when he was James Murdoch’s chief operating officer. The son of Rupert Murdoch did not provide further explanation.