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Palace intrigue in the halls of News Corp. Add to ...

Where’s a good phone hacker when you need one?

If nobody actually said that on Wednesday, when James Murdoch stepped down as executive chairman of News Corp. ’s British newspaper subsidiary News International, plenty must have thought it.

For, despite the swirling speculation around the reasons for Mr. Murdoch’s departure – what strategy does it serve? who pushed him? who will replace him? – the only way to really know what’s going on in the News Corp. inner sanctum is to have a source on the inside. Or to, you know, hack the phone of one of them.

Hacking into private voice mails was a favourite technique of Clive Goodman, the former News of the World reporter and editor who, until the hacking scandal exploded last year, was known as the “rogue reporter” whose collusion with the private investigator James Mulcaire tainted News Corp.’s otherwise saintly journalistic enterprise.

It is fitting that Mr. Goodman was the paper’s royals editor, because covering the Murdochs these days is like covering the real royals: suffused with endless whisperings, palace intrigue, alleged coups and, in Mr. Murdoch’s father, Rupert, an increasingly Lear-like figure whose self-centred actions are helping to destroy the very kingdom he had hoped to give to his children.

The latest narrative turn seems inspired by Shakespeare, or perhaps the story of Genesis: an elder son, cast away or self-exiled, possibly returning to save the kingdom. Or what’s left of it.

When Rupert jetted over to London two weeks ago to cheer up the newsroom of The Sun after the arrest of five of its editorial staffers over a brewing bribery scandal, and to announce the imminent launch of The Sun on Sunday, he was accompanied by his eldest son Lachlan. James had never had much interest in the print business, but Lachlan’s re-emergence onto the scene after more than six years running his own businesses in Australia sparked talk that his status as heir-apparent may have been revived.

For the time being, however, there is no Murdoch name on the News International letterhead.

That is the only direct effect of Wednesday’s announcement. Shareholders shrugged at the news; trading volume was unremarkable. But that may not be a surprise: Analysts have often spoken of a “Murdoch discount,” that will keep the share price artificially low until the family relinquishes control of the company.

The real significance of James’s move may be in how quickly it came after Rupert Murdoch’s latest attempt to change the story. Last summer, as the British Parliament convened a hearing into hacking and corruption at News of the World, the elder Mr. Murdoch ordered the 168-year-old paper summarily closed. The move helped blunt criticism, especially as Mr. Murdoch appeared chastened and a little dotty – which is to say, Lear-ish – during the hearing.

But when he strode into the Sun newsroom last month to announce the Sunday edition, he was fiery again, issuing a full-throated defence of his reporters and calling for their persecution to end. It was interpreted as a resentful pushback against a trio of overlapping criminal investigations, as well as the long-running Leveson inquiry into the culture, practice, and ethics of the press.

Rupert Murdoch seems to be hitting the law of diminishing returns. Last weekend, he boasted that the Sun on Sunday’s launch edition sold more than 3.2 million copies. He didn’t even get to enjoy it for a day: On Monday, the Metropolitan Police’s investigator, Sue Akers, appeared before the Leveson inquiry to charge that the Sun had built a “network of corrupted officials” and created a “culture of illegal payments.”

James Murdoch remains the deputy chief operating officer of News Corp. Some analysts interpreted this to mean just what the company said in its official statement: that the move was merely the final piece of a long-planned shift by him to its global headquarters in New York. There, the company says, he is better positioned to oversee News Corp.’s true growth area – pay television.

Which may be right; who knows? The only thing we know for certain is that there’s something unusual about a company whose pronouncements need to be read by analysts and others like so many tea leaves.

THE JAMES MURDOCH FILE

Born in 1972, James is the youngest of Rupert Murdoch's three children from his first marriage. He has a sister, Elisabeth, and a brother, Lachlan.

He was schooled in New York and studied film and history at Harvard University, but dropped out in 1995 without completing his degree.

Gaining a reputation as the family rebel, he started a hip-hop record company, Rawkus Records, which was bought by News Corp. in 1996.

In 2007 he took over leadership of News International, News Corp.'s British newspaper stable and owner of News of the World, Britain's biggest selling Sunday paper, in his role as News Corp.'s chairman and chief executive for Europe and Asia. In 2009 he became News International's executive chairman.

Reuters

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