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Murdoch Suggests COO Carey, Not Son James, Will Be Next CEO of News Corp.

By Jim Edwards

Updated on: August 10, 2011 / 7:51 PM EDT / MoneyWatch

Prior to News Corp.'s Q4 2011 earnings call this afternoon, several Wall Street analysts expected the issue of who would succeed CEO Rupert Murdoch to be addressed, and they were not disappointed. Murdoch opened the call by insisting that he wasn't going anywhere, and then suggested that Chase Carey, his extravagantly mustachioed COO would "immediately" succeed him if he died suddenly, instead of his son James. Murdoch opened the call by saying:

I've run this company for more than 50 years ... the board and I believe I should continue in my current role as chairman and CEO. ... I'm personally determined to put things right when it comes to the News of the World.

Murdoch's advanced age -- he's 80 -- and his apparent ignorance of how his tabloid empire relied on illegal payments to police officers and criminal phone hacking has brought the question of his continued control of News (NWS) to the fore. Until the phone hacking scandal, his son James was positioned as his successor, as chief of the European unit that oversees News International. But the hacking occurred on James' watch, and there are questions about the veracity of his testimony to parliament about what he knew and when he knew it.

Murdoch's insistence that he will go on (and on and on ...) is not likely to please Wall Street. When he testified on the hacking in July, he looked old and tired, said he was out of touch, and he had to be defended against a cream-pie thrower by his younger wife Wendi Deng. (Murdoch was notably sharper this afternoon, although he was in a much safer environment than Westminster.) The obvious solution would be for him to give up his CEO title and hand it to Carey, as some have suggested. That would allow him to stay on as chairman, a role more suited to a man whose energy is fading.

End of the "Murdoch discount"? Not yet...

Such a move would probably boost the stock, which Carey described on the call as "woefully undervalued" despite a $5 billion buyback plan. But it's not going to happen. Analysts lost interest in succession at News immediately during the call -- cowards! -- but in a Q&A with press at the end reporters pressed Murdoch. A Reuters reporter asked whether the board would support James Murdoch (pictured) as CEO "in the near future." Murdoch replied, to laughs from his management team:

Well I hope the job won't be open in the near future. Chase is my partner I'm sure he'll get it immediately if I went under a bus. Chase and I have full confidence in James. In the end this is a matter for the board.

He then said he did not anticipate making any changes to the board, which is stacked with friends and family.

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