Then News International Chairman and Chief Executive James Murdoch arrives for work in east London, July 13, 2011. News Corp. said on February 29, 2012 that James Murdoch has stepped down as executive chairman of News International.
On Feb. 26, Rupert Murdoch celebrated the launch of the Sun on Sunday—the newspaper he hopes will fill the gap in the market created by the closure of the News of the World. But for a man who grew wealthy buying up small newspapers in Australia more than 60 years ago, restoring credibility at News International in the wake of the phone hacking scandal isn’t just about boosting the bottom line. On some level it’s about justifying his life’s work, and burnishing the family name.
Unfortunately for Murdoch, there will be one less family member in on the act. Just as the Sun on Sunday rises, the son has finally set. This afternoon, James Murdoch—scion of the Murdoch empire and News Corp’s heir apparent—resigned from his position as executive chairman of News International, which runs The Sun and Sun on Sunday, and the Times and Sunday Times (of London). His resignation comes after a flurry of revelations in recent months over the phone hacking scandal. In November the embattled Murdoch fended off accusations from the former News of the World editor and its former legal manager that they made him aware of widespread hacking at the organization as early as 2008. And he listened, rather uncomfortably, as Labour MP Tom Watson compared him to a “mafia boss” running a “criminal enterprise.” As fresh allegations of widespread corruption and a “culture of illegal payments” engulfed the Sun in recent days, young Murdoch decided it was time to leave the hot seat.
“I deeply appreciate the dedication of my many talented colleagues at News International who work tirelessly to inform the public and am confident about the tremendous momentum we have achieved under the leadership of my father and [chief executive] Tom Mockridge,” the younger Murdoch said in a statement announcing his departure. “With the successful launch of The Sun on Sunday and new business practices in place across all titles, News International is now in a strong position to build on its successes in the future.”
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The second half of that statement is telling. Early reports show that the Sun on Sunday sold three million copies—a million more than Rupert Murdoch had hoped. Surely the successful launch made for a cleaner break. In retrospect there were also signs News International was planning a transition. According to the Daily Mail, Rupert Murdoch was last night seen at a Dublin restaurant with Mockridge, potentially finalizing the company’s strategy moving forward.
Shareholders at News Corporation—the parent company of News International—may have let out a sigh of relief this morning. For months, analyst chatter has suggested that James Murdoch’s perceived association with the phone hacking scandal could damage the company’s image (and stock price). In October, more than a third of News Corporation investors voted against re-electing James Murdoch to the company’s board—a severe rebuke that suggested he was less of a businessman than he is an heir to the family fortune.
Given the toxicity of the phone hacking scandal, the only way for Murdoch to continue at News Corporation was to leave the newspaper business behind. He’ll likely enjoy the move—and not merely because it’ll relieve the day-to-day pressure he must feel over the hacking scandal. Unlike his father, who is frequently said to have newspaper ink flowing through his veins, Murdoch has always seen digital as the way forward. According to his resignation announcement, he will continue to “assume a variety of essential corporate leadership mandates, with particular focus on important pay-TV businesses and broader international operations.” He’ll also be where the money is—a thrilling prospect for someone who perspires ambition. In the year to June 2010, News International, which at the time included the Sun, News of the World, and the Times and Sunday Times (of London), contributed just $1.61 billion to the $32.7 billion News Corporation generated as a whole. That’s around 5% of corporate revenues—well behind News Corp’s satellite TV business (which contributed 12%) and film division (which put up 23%).
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Murdoch’s relocation comes as the criminal probe into alleged wrong doing at the Sun and the defunct News of the World is deepening. On Monday Sue Akers, the Met Police’s deputy assistant commissioner, said that her team were looking into a “culture of illegal payments” that involved “the delivery of regular, frequent and sometimes significant sums of money to small numbers of public officials by journalists.” Confirmation of widespread payments could expose News Corp. to legal action in the U.S. under the Foreign Corrupt Practices Act, which penalizes American companies that bribe foreign officials. The plot is likely to thicken in the coming weeks. “We are nearer the start than the finish on this inquiry, and there remain a number of persons of interest,” Akers said. “These include journalists and public officials.”
On Tuesday even more explosive accusations emerged. Speaking to the Leveson inquiry, Jacqui Hames, a former host of Crimewatch, Britain’s answer to America’s Most Wanted, alleged that managers at News of the World colluded with murder suspects to put Hames and her then husband—the detective chief superintendent Dave Cook—under surveillance, with the hope of subverting the investigation.
During her emotional testimony, Hames claimed that the intimidation began after her husband made an appeal for information on Crimewatch for fresh information on the axe murder of Daniel Morgan, a partner in a private detective agency who was killed in 1987. The former TV presenter alleged that former NoW executive Alex Marunchak had close relations with suspects in the murder, at least one of whom worked with the NoW’s private detectives. When presented with the evidence in 2003, then editor Rebekah Brooks failed to act, Hames said. She did, however, give Marunchak a promotion. “These events left me distressed, anxious and needing counselling, and contributed to the breakdown of my marriage to David in 2010,” Hames said.
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Now the family of Daniel Morgan want a judicial inquiry into the police’s handling of the case—which has collapsed five times and failed to result in any convictions. And Tom Watson, the MP who lambasted James Murdoch as a “mafia boss” in November, raised the case in a debate today in the House of Commons. Having spoken with Morgan’s family, he brought forward the claim that Morgan had taken a police corruption story to the News of the World a week before he died. He also claimed that private investigator Jonathan Rees, Morgan’s former business partner who was acquitted of the murder last year, was at the “corrupt nexus of private investigators, police officers and journalists at the News of the World.”
Watson also claimed that the Metropolitan police have an intelligence report from 2002 that suggests Marunchak may have paid the family members of police officers for information about the so-called Soham murders, in which two 10-year old girls in Cambridgeshire were killed in 2002. Those allegations, he said, have never been investigated.
In a strange way, the upheaval at News International may give Rupert Murdoch an excuse to focus more on what he loves most: the newspaper business. Shortly after the announcement that James Murdoch would give up his role at News International, Robert Peston, the BBC’s business editor, spoke with an unnamed senior executive from News Corporation. Why did the younger Murdoch quit? Because “you don’t need more than one Murdoch in charge,” he quotes the executive as saying.
That suggests that Murdoch, 81, has no plans to pass the reigns over to James in the near future—or ever. On February 17, the elder Murdoch visited the offices of the Sun newspaper hoping to boost morale. He walked around the newsroom accompanied not by James, but by his older brother Lachlan. In a family given to internal drama, perhaps the heir apparent isn’t so apparent any more.
William Lee Adams is a staff writer at the London bureau of TIME. Find him on Twitter at @willyleeadams or on Facebook. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.