Rupert Murdoch to Step Down as CEO of 21st Century Fox; Latest on New York Prison Escape
ROBYN CURNOW, CNNI: Welcome to the International Desk. I'm Robyn Curnow at the CNN Center. We begin with breaking news in the business world. Rupert Murdoch, the Australian media mogul, is preparing to step down as CEO of 21st Century Fox. Well, let's go straight to our Maggie Lake. She joins us now from New York. Hi, there, Maggie. I know that there's not a lot of information. Do we know why Mr. Murdoch has decided to step down now?</s>MAGGIE LAKE: We don't, Robyn. This is just coming across, but it's worth pointing out that he is 84 years old, still, a vibrant and powerful force in the media landscape for decades now, and someone, who just last year, made a bid to try to buy Time Warner, which, of course, is the parent of CNN, so this is a man who had his hands on the wheel, certainly, and has been a major force in this company, which many know as News Corp. It was split off after the trials and tribulations of the newspapers in the UK and formed a publishing and then the sort of media, TV, and movie side, which is 21st Century Fox, but Rupert Murdoch stepping down. What we do know from earlier reports, and, again, this just coming in, and these are reports, is that James Murdoch, his son, will take over as the head; although, he will run it in conjunction with his brother, Lachlan. It looks like the current COO, Chase Carey, will be stepping out of that role; although, perhaps not stepping away from the company altogether for at least a transition period, maybe moving into some sort of advisory role. Again, these are all reports not confirmed by CNN. This is going to be interesting to see how investors react to this. As legendary as Rupert Murdoch is, there has always been concern about the family control of this company, the stormy relations between the family and just what a succession plan would look like. Investors loved Chase Carey when he came in. He really helped firm up the company, drive that entertainment arm, which has been the money-making arm of this empire for some time now. It's been, as you know, a very tough environment for publishing, and so Chase Carey was very much loved by Wall Street. Now that he's stepping in and the family really taking over this next generation, I think the verdict is out on exactly how they're going to feel about that. There's going to be a lot of work done to sort of shore up confidence, but, again, this is a big development for media on a man who's really towered over the landscape, Robyn.</s>CURNOW: He has towered over the landscape. An extraordinary story, you know, taking his father's newspaper in Australia and creating this massive global empire, and it hasn't just spanned media. I mean, the political influence that Rupert Murdoch has wield, also significant. Do you think that will change, or how much of an impact did that hacking scandal play into the fortunes of Mr. Murdoch's company?</s>LAKE: I think this had a huge impact in terms of looking at his legacy. When is it comes to the company, I mean, this was such a huge story at the time. We followed it so closely, and whenever I would talk to investors, they would have a very different perspective and say, listen, as long as there's a firewall, and it doesn't touch the entertainment part, that's the real core of this company. Murdoch loved his newspapers. He was a newspaper man, and the publishing side meant a lot to him in terms of his story, but for investors, it was all about that entertainment side, the television, the movie studios, so I think that when we look at Rupert Murdoch's story, that hacking chapter, very important in terms of looking at his legacy. It certainly changed things reputationally. Some people thought it was going to be the end for Rupert Murdoch. If you remember back to that powerful man sitting in front of UK Parliament, having to sort of explain himself. He looked very humbled, and it was such a different Rupert Murdoch that we saw. A lot of people thought that it might be the beginning of the end then, but, instead, it wasn't. He came storming back, made that bid for Time Warner, so that is why it's so the significant, I think, to see that sort of bold, and Rupert Murdoch choosing now, this moment to step aside, Robyn.</s>CURNOW: Thank you so much for all your updates there. I mean, an extraordinary man, no matter whether he love him or hate him.</s>LAKE: (Inaudible).</s>CURNOW: He really has left quite a legacy, and also made very sure that his line of succession, his children, I think he's been nurturing them from a very young age to --</s>LAKE: That's right.</s>CURNOW: -- take over now, so, Maggie Lake, thank you, and any more details on this story, you will bring them to us. Thank you. And there's a lot going on here at CNN. Also, we're hearing major developments in that story that has absolutely focused police in the US. There have been developments in that prison escape. We're going to take you to our sister network, CNN USA for that.</s>CURNOW: Okay. You've been listening there to our coverage, continuing coverage, of a major story that's been breaking and developing in the US the past few days. That rather audacious prison escape by two murders. They've been hunted for the past few days here in the US, and it looks like police say they have picked up some scent, police dogs have picked up a scent of them, so we'll keep you updated on that story if there are new developments on if authorities find them, but there's also another story breaking here on CNN, which has global implications, and that's about Rupert Murdoch, the CEO of 21st Century Fox is preparing to step down. Well, our Brian Stelter joins me now from New York, and, Brian, there's not a lot of information. Maggie Lake was saying that earlier. The question I have is why now?</s>BRIAN STELTER: Absolutely. Well, you think about Rupert Murdoch, you think about one of the giants of global media, but a person who has been thinking for a long time about succession planning, about who to hand his company to now as he continues, you know, to run these companies, day-to- day, two of them; 21st Century Fox and News Corporation. And the word is that he'll be stepping down from 21st Century Fox, which is the bigger, and the more valuable of the two companies. It's the company that includes Fox News, Fox Sports, most of -- pretty much all of his television and film assets all around the world, and he will apparently be handing the reins over to his son, James. Now, Murdoch's company is not confirming any of this yet. This is according to a source with knowledge of the matter who is speaking to me for the moment. Apparently, these plans were not supposed to come out yet, but they are being put into place, and we will be hearing more about them shortly.</s>CURNOW: I mean, Mr. Murdoch has been a huge character within the media scene for decades now, but he is 84 years old. He's just -- a few years ago had a rather messy divorce, and it does seem particularly after that hacking scandal, he looked definitely, frailer, didn't he? That said, this is a man who's known for being very tenacious. His sons, what do we know about them? There's James Murdoch, who looks like he's going to be handed the day-to-day running of 21st Century Fox, but there's also Lachlan Murdoch who's been based in Sidney, Australia, who some reports I'm reading here are saying that these brothers are going to try and work together in partnership, and, of course, Rupert Murdoch will still have major influence.</s>STELTER: Yeah. We should mention first and foremost, according to the source that I'm speaking with, Murdoch will remain executive chairman, so that would give him the final say --</s>CURNOW: And also he'll be co-executive chairman --</s>BRIAN STELTER: -- over issues at Fox.</s>CURNOW: -- I understand.</s>BRIAN STELTER: That's right. Yeah. And then Lachlan would be co- executive chairman while working with his brother James. Anybody who's got brothers can imagine the dynamic here, and anybody who's got a lot of money can imagine the dynamic there as well. When you've got brothers who are trying to, in some cases, compete for their father's affections, well, that has been a story of the Murdoch empire for a long time. There have been family members, you know, siblings -- excuse me, children of Rupert Murdoch who go away for a while, who come back, who go away for a while, but, lately, James Murdoch has become more involved with the company. He has been seen all the time at the company. He's been by his father's side, so it makes a lot of sense that he is apparently expected to be named CEO of 21st Century Fox.</s>CURNOW: Indeed. I mean, when you look to this new generation, James specifically was very hurt by that hacking scandal in the UK. He stepped down as the head of BSky</s>B. STELTER: Right.</s>CURNOW: But I understand from reports and, you know, people that, you know, within the media industry, saying that he has become perhaps a more mature leader in the last few years, and also that he has been very -- he has pushed ahead with digital expansions. Do you think that's also key?</s>STELTER: You know, you think back to that hacking scandal a couple of years ago, and people like me, frankly, were writing stories about the end of his empire. Well, that certainly did not come to pass. It certainly was a terrible situation for the companies. It was a massive ethical scandal, and it did do damage to the companies. Partly, it's why the two companies now are separate, 21st Century Fox and News Cooperation, with News Corporation owning the newspapers like News of the World and all the rest and all the UK papers, all the Australian papers, et cetera, but, my point is that they were able to weather that storm. They were able to come through it, and they were able to get to the other side of it, and, frankly, the companies are in relatively strong shape right now; particular, 21st Century Fox. You mentioned digital, and that's going to be the most important word throughout this transition, throughout this story. Moguls like Murdoch may know that digital is all that matters, but their sons, their children, know it more deeply because they've grown up with it more. Murdoch is -- still has a love for the printed page, for the printed newspaper. His sons, like James Murdoch don't necessarily have that same kind of attachment, and they may be better positioned to make the changes that are necessary in a digital environment. You know, Rupert Murdoch has done some important experiments with digital. He's tried iPad apps. He's tried online subscriptions, but I think what we would see in the future from his sons is much more of a tilt toward all that digital represents; whether that's online streaming services or of web versions of newspapers.</s>CURNOW: Indeed. And let me -- this is certainly not his obituary, but I think, you know, there is a sense of looking back at the career of Rupert Murdoch here. I mean, he's not going to let go of the greater vision of these companies when his sons are in the driving seat, but still, I mean, let's talk about the man, Rupert Murdoch. I mean, just the kind of influence he's managed to peddle in the capitols of the world over the past few decades. I mean, this is a man who didn't just publish newspapers. He wielded political influence, particularly, in the UK. I mean, look, Tony Blair is the Godfather of one of his youngest daughters.</s>STELTER: That's right. Some people have compared him in the past to William Randolph Hearst, and the comparisons make a lot of sense. If I think about the United States as a media market, you think about Murdoch owning the New York Post, the tabloid newspaper, and in his endorsements in the Post being very important, but perhaps his most important contribution to the United States, to the political and media spheres here, has been Fox News, which launched about 20 years ago, which became the dominant cable news channel in the US, and which combines a conservative brand of politics with news coverage in a way that hadn't been seen before in the United States. That has been an incredibly influential tool for this morning sometimes and for Roger Ailes, the chairman of Fox News, and Fox News is an example of Murdoch's power and of his influence. It's a news brand but also with political significance.</s>CURNOW: Indeed. Thanks so much for your analysis on this news that Rupert Murdoch will be preparing to step down as the CEO of 20th [sic] century -- 21st Century Fox. Brian Stelter, thank you for that. You're walking the iDesk. I'm Robyn Curnow, and we'll be right back after this short break.