In this extract from Paul Barry's upcoming book, he looks at the succession plans inside News Corp.
At the beginning of 2011, James Murdoch was formally anointed Rupert's heir, and a succession plan was put in place. With the BSkyB takeover safely locked away, the youngest son would move to New York to learn the movie and cable TV business from Chase Carey. And when the latter's contract expired in July 2014, he would take over as chief executive, with his father staying on as chairman to smooth the transition.
Or that was the theory. But that is now not going to happen, or not straight away.
There had been problems in arriving at this solution, and it was not yet set in stone. The family was worried about James's arrogance and confrontational style, while his siblings were concerned that he and Rupert were always fighting. And there was no guarantee that Murdoch's top executives would be prepared to play along.
You didn't have to dig very far to find that the younger son was unpopular at Wapping because he had no great love for journalism or newspapers, which was what News Corp had been built on, and his style was the antithesis of Rupert's, which is what everyone was used to.
One top executive at News International claimed that James was "overconfident" and "not a good listener". Others found his communication skills left much to be desired.
To journalists at News' London HQ, it was as if he was from another planet. One fellow editor reported the News of the World's Colin Myler arriving at a party and saying, "I just met with James for an hour and I've no idea what he was saying".
News Corp's American bosses didn't much like him either. "James is smart but not as smart as he thinks he is," said one former top US executive, who then added more bluntly, "He can be charming and personable if he wants to be, and he's reasonably witty, but he's entirely disingenuous. I would trust him with nothing."
But these concerns were nothing compared to the doubts raised by the hacking scandal. It was James who had trusted Rebekah Brooks and let it all get so out of hand. It was James who had looked so naive and charmless before the House of Commons, after which he had been savagely criticised by the Culture Committee, Leveson and Ofcom.
And it was James who was to blame for the disasters that had befallen the company, or so Rupert, Elisabeth and News Corp's top executives believed.
In James's view, by contrast, it was largely his father's fault. Things had gone wrong at the British newspapers because of the casual way Rupert had always run them, with no proper processes or chain of command - or so James claimed - and it was he who had the company back on the straight and narrow by closing the News of the World against his father's wishes.
More broadly, he told friends that he had been ordered to take charge of News International at very short notice and had not been allowed to refuse. He had then been forced to carry the can for crimes that he had nothing to do with and knew nothing about. He had simply been in the wrong place at the wrong time, the fall guy. Naturally he also maintained that he had been let down by his advisers, and by Rebekah Brooks in particular.
Surprisingly, some well-informed observers, including the seasoned Murdoch watcher Claire Enders, accepted this. "James didn't read his emails," she said. "He didn't read the New York Times piece. He didn't read Private Eye. He was the Prince, the Dauphin, the heir apparent. No one bothered him." And a top lawyer in the hacking cases agreed, saying "James thought of himself as far too big and important. He was running a multibillion-pound business, and this was too small and trivial for him to bother with. He would just have told them to get on with it".
But even if this defence was accepted, it did not necessarily improve James's chances of succeeding his father or replacing a world-class executive like Chase Carey, who was doing an excellent job. Being "wilfully blind" was no qualification for running a media empire. Nor was a cold, stiff personality of much use in the movie business.
"James just isn't Hollywood," said one of his father's former American executives who knew him well. Nevertheless, James was not yet the write-off that many commentators believed him to be. America cared little about phone hacking or bribing British coppers, and he had not been charged with any crime, apart from strangling the English language. His friends insisted he was smart and determined, and would work his way back.
And memories were already fading: at the 2012 annual general meeting only about a third as many votes as in 2011 were cast against him, while his brother Lachlan was now more unpopular than he was with the group's shareholders.
Moreover, if Rupert stuck around for a few more years - and you could bet that he planned to - there would be ample time for James to repair his reputation. He was the only Murdoch child who had experience running a big media group, and he had added billions of dollars to the value of BSkyB; the family's Saudi friend, Prince Al-Waleed bin Talal, was still backing him; and word was that Lachlan would vote for him in the Murdoch Family Trust. So, despite everything that had happened and the disgraces he had suffered, he was still very much in the box seat.
The big question was whether News Corp's powerful US executives could work with him, and what would happen if they refused.
There had been plenty of hostility to James when he was running the British operations, with accusations that he was trying to establish a rival court, and Rupert's biographer Michael Wolff, who had more access to the inner workings of News Corp than most, was adamant that his move to the US would provoke the same sort of fight that had forced Lachlan out seven years earlier.
And even if there was a touch of hyperbole in this prediction, Murdoch's youngest son was certain to face problems.
"There's no way that Chase will report to James," one top News executive bluntly predicted. "Take it from me."
He would also face trouble from Roger Ailes, the right-wing warrior who ran Fox News, which brought in so much of News Corp's profit. James was pro-Clinton, pro-Obama, anti-guns and worried about global warming, and stood for just about everything that Fox News despised.
Would he really be able to run a group that relied so heavily on rabid right-wing politics to make its money? Would Ailes be able to stomach him getting the job? And would the board back the young Murdoch against such a powerful and valuable executive if it came to a fight?
Technically, James's succession was still on track. He had been promoted to chief operating officer of News Corp, or number three in the company, and had not been banished to the boondocks. But spies at the Murdochs' Sixth Avenue headquarters in New York reported he had little to do, except leap to attention when his dad walked past. And others observed that his job was a made-up affair that had been created especially for him.
Moreover, with the criminal trials of Brooks, Andy Coulson and others due to start in London in October there was much that could still go wrong. If he could get through the next two years unscathed, and if Rupert remained in control, James might well succeed. But he had a fair way yet to go.
Paul Barry's book on the Murdochs in crisis, Breaking News: Sex, Lies and the Murdoch Succession, will be published on September 25 by Allen & Unwin, $39.99rrp.