Rupert Murdoch, the 84-year old media baron, will hand over the chief executive reins at entertainment conglomerate Twenty-First Century Fox Inc to his 42-year-old son James, a source familiar with the situation said on Thursday.
Fox Chief Operating Officer Chase Carey will step into an advisory role as part of a generational shift at the parent company of Fox News and movie studio behind "X-Men" and other series, the source said, adding that James Murdoch and his 43-year-old brother Lachlan would work as partners.
The elder Murdoch, whose media career spans the better part of a century, will take on the role of executive chairman, according to published reports.
While New York-based James will have day-to-day control of the company, Lachlan, who will be moving from Sydney to Los Angeles, will play an integral role as the company's co-executive chair.
The wheels of this partnership were set in motion when Fox announced the brothers' promotions - Lachlan to non-executive co-chairman of both Fox and publishing operation News Corp and James to co-chief operating officer of Fox together with Carey - in March 2014.
This will be the first time that only Murdoch family members will occupy the top three positions at the company.
Fox said on Thursday it would take up the succession issue at its next board meeting, which the source said would take place next week.
CNBC reported earlier that the elder Murdoch would still have the final say in whatever transpires at Fox. It was unclear whether the reorganization would take place this year or at the start of 2016, CNBC said.
'Carey must not leave'
"The most important thing in the immediate term is that Chase Carey not leave,” said Needham & Company Inc analyst Laura Martin. "Wall Street really cares about Chase Carey running this business. So if the implication of Rupert handing the title to his son is that Chase Carey leaves in the near term, we would expect that to negatively impact the stock prices."
As of April, the Murdochs owned 39 percent of voting shares in both Fox and News Corp, which operates newspapers like The Wall Street Journal and book publisher HarperCollins, through a family trust.
Fox split from News Corp in 2013.
A Harvard University dropout, James spent his early career as a cartoonist and co-founder of hip hop label Rawkus Records, which was bought by News Corp. He joined News Corp in 1996 at 23 and soon ran the company's Asian assets. He was later named CEO of BSkyB, now known as Sky, that is 39 percent owned by Fox.
Some key investors have been warming to the idea that James has the ability to run Fox, describing him as curious and a risk-taker like his father.
They also cite two big differences that they like: James is less sentimental about certain assets than his father is, and more enthusiastic about courting shareholders.
Timing a surprise
The reported executive moves were not surprising, but their timing is, Cowen & Co analysts said in a note to clients, noting that Fox could soon cut earnings estimates. That could set a new, lower bar for a new chief executive to target.
"We have always viewed Rupert as an empire builder who is more concerned with accumulating assets than with delivering shareholder returns, highlighted most recently by the aborted attempt to take over Time Warner," the Cowen analysts said.
Time Warner thwarted an $80 billion advance by Fox last year, in part by denigrating the non-voting stock that Rupert Murdoch was offering.
Big acquisitions have long been standard operating procedure for Murdoch, who took an Australian newspaper chain and turned it into a global media superpower, buying storied properties such as the Times of London, The Wall Street Journal and Fox.
He has also been no stranger to controversy with a baldly partisan approach at holdings from Fox News to the New York Post and a sometime role as political kingmaker.
Fox fell 0.2 percent to close at $32.90, while News Corp shares slipped 0.5 percent at $14.58.