Rupert Murdoch will soon hand over the reins of the media dynasty that began with his father's Australian newspaper nearly a century ago to his sons.
The specific timing of the handoff of 21st Century Fox is unclear. But as James Murdoch prepares to take over as CEO and Lachlan Murdoch as executive co-chairman, some on Wall Street worry about how the pair will run the conglomerate behind Fox News, the Fox broadcast network and the 20th Century Fox movie studio. The moves were expected eventually, but shares were down slightly when news of the changes came Thursday.
Michael Nathanson, an analyst at research firm MoffettNathanson, said investors will be watching closely for things like whether the company continues to be open with Wall Street, particularly with profit guidance.
"It comes down to what choices they make," he said.
While the timing of the moves had not been expected so soon, they come a year after Murdoch elevated both sons into prominent roles. In March 2014, James, 42, was promoted to co-COO alongside the elder Murdoch's popular lieutenant Chase Carey, while Lachlan, 43, was named non-executive co-chairman.
Murdoch told employees in an internal memo at the time: "This evolution of our leadership team underscores the considerable planning that both the company and the board have undertaken to ensure a vibrant future for 21st Century Fox and its shareholders."
The 84-year-old patriarch is one of the world's most powerful media magnates and has run the company known as News Corp. since 1979, before it split into two separate entertainment and publishing companies two years ago: News Corp. and 21st Century Fox.
Murdoch, an ambitious executive with a flair for big acquisitions, has been known for upending the media establishment with bold moves, but also for over-paying for assets he sets his sights on.
In recent years, as he's been stung by a phone-hacking scandal by his journalists in the U.K. in 2011 and the financial decline of his beloved newspapers, Murdoch's role has lessened. Carey, who has long been seen as a shareholder advocate and the voice of reason in controlling the pace of acquisitions, promoting share buybacks and streamlining its vast tangle of minority investments, had led interaction with investors at conferences and quarterly earnings calls.
A person with direct knowledge of the transition said the elder Murdoch will remain deeply involved in the company, while his sons are to run the rest of the business as a partnership. The person was not authorized to speak publicly and spoke on condition of anonymity.
Murdoch will still retain a grip on the corporation through a family trust that owns 38 percent of the voting shares. Fox News CEO Roger Ailes will also continue to report to the elder Murdoch directly.
Carey will stay on in an advisory role through the end of his contract in June 2016.
Laura Martin, an analyst with Needham & Co., worries that the further Carey is removed from the company, "the more downside risk there is in the share price."
Additionally, Martin said James will need to overcome the baggage caused by his link to the hacking scandal, which occurred when he oversaw international operations. He'll also have to deal with the stigma of being the son of the founder.
"He has to prove to Wall Street that he deserves the chair," she said.
As some think about how Murdoch's sons will run the company, they notice there's no role for 46-year-old Elisabeth, one of Murdoch's four daughters, who had been brought into a prominent role in the family business when her production company Shine was acquired by News Corp. in 2011. But her role had already diminished when Shine was merged with Endemol in a joint venture last year and she stepped away from day-to-day operations.
Murdoch's eldest daughter, Prudence, was reportedly named to a board that oversees News Corp.'s U.K. newspapers, The Times and Sunday Times, in 2011. Murdoch's two youngest daughters by ex-wife Wendi Deng have an economic stake in Fox and News Corp. but no voting shares.
"I think the boys are back," said David Folkenflik, an NPR reporter who wrote a book called "Murdoch's World: The Last of the Old Media Empires." They are "yoked together in a sort of competitive collaboration."
Still, he notes that their father is "atop all this for now."
Michael Wolff, another Murdoch biographer who wrote "The Man Who Owns The News," says none of his children should be counted out. And neither can he.
"There's the larger question, is the father going anywhere? I would say he's not going anywhere until God takes him," Wolff said.
Fox News and CNBC first reported news of the changes at 21st Century Fox earlier Thursday. But in a statement, 21st Century Fox acknowledged the pending changes saying that "the matter of succession is on the agenda at our upcoming, regularly scheduled board meeting."
The company started with a single newspaper in Murdoch's native Australia. He expanded it across many media platforms in Britain, the U.S., Germany, Italy and India. He started the Fox network in the 1980s after ABC, CBS and NBC had dominated for a half-century. Then he tackled cable TV with Fox News, which quickly toppled CNN as the cable news leader.
But his newspapers have had a harder time. A phone hacking scandal in the U.K. forced the closure of tabloid News of the World, and he's widely seen as paying too much with his $5 billion acquisition of Dow Jones and its flagship, The Wall Street Journal. Under pressure from investors, he split the original News Corp. into print and entertainment companies in 2013.
Murdoch also is the executive chairman at News Corp., the company that now contains Journal and New York Post newspapers and book publisher HarperCollins.