Inside Move: Son may rise at BskyB

Company's stock plummets after reports of handover

By DEBRA JOHNSON, MEREDITH AMDUR

The British press has got its knickers in a twist over reports that Rupert Murdoch's younger son James, boss of profitable Star TV in Asia, is the odds-on favorite to replace Tony Ball, chief exec of U.K. satcaster BSkyB.

Murmurings about Murdoch's displeasure with Ball have been surfacing since April. But as contract negotiations with the 47-year-old Ball have dragged on with no resolution, talk has turned -- as it inevitably will when the subject is pay TV juggernaut BSkyB -- to the omnipotence of Rupert Murdoch and prospects of a new contender in the succession sweepstakes.

If ever there was any doubt, skeptics say, Rupert is effectively asserting his control over the 35%-owned Sky, and James' expected ascension from leading the family's Asian turnaround to running a News Corp. crown jewel is proof of it.

Scuttlebutt has it that Ball was getting too successful and powerful for his own good.

Sources say the highly respected Ball, for his part, has been hankering to move to Spain anyway, possibly retiring with the reported £25 million ($40.3 million) he's earned in his Sky tenure.

Murdoch is expected to inform other BSkyB shareholders of his plans to appoint James, already a non-exec director at the paybox, as chief exec. Some say handing James the reins of Sky could shake up the assumption that elder brother Lachlan, 32, who runs the New York Post and U.S. TV stations, was the likely heir to the Murdoch throne. That assumes BSkyB somehow holds more cachet (and growth prospects) than the assets under Lachlan's command.

Rupert Murdoch has said he's not going anywhere anytime soon, and that both sons have done well but still have much to learn.

BSkyB stock has plummeted 15% since reports of the handover surfaced, as U.K. analysts and investors question the wisdom of putting a 30-year-old exec with no knowledge of British broadcasting at the helm of the publicly traded company. But after facing similar skepticism, James has run a tight ship at Star TV since taking charge in 2000, steering the pan-regional satcaster to breakeven after nearly 10 years in the News Corp. fold.

Shareholders could still resist James' appointment, even though News Corp. is by far the biggest shareholder of BSkyB.

With the prospects of a News Corp. reshuffle come the inevitable questions of succession.

Pundits still point to Fox chief and Rupert's No. 2 Peter Chernin as the short-term heir apparent.