Will Murdoch lose his crown?

Technology has moved the tectonic plates beneath the Murdoch empire.

Regulators are blocking his attempts to expand his reign in the UK.

And shareholders in 21st Century Fox are threatening to force the unwinding of the voting structure that allows the Murdoch family to control it.

Add to the mix the fact that a bunch of giant corporate predators are eyeing off the company's programming and distribution assets, and the recipe for change is clear enough.

It is hard to imagine that the empire won't look radically different in a year.

It's equally hard to imagine a global media landscape in which Rupert Murdoch is not the most powerful player.

But the forces for change are now so many and so strong that they will be hard to resist.

A massive week of news from the Murdoch empire began with the leak of talks between 21st Century Fox and Disney about selling its programming and satellite distribution assets.

While the talks are recent, they are said not to be live right now.

Interestingly, given most are speculating these leaks came from the 21st Century Fox camp, it is fair to assume that this was a Murdoch-inspired attempt to let interested parties know the assets are on the block in order to get an auction started.

That is, Murdoch is an active and willing seller at the right price.

It's a deal that makes complete sense.

Twenty-first Century Fox has only one of the three ingredients that the large technology companies like Google and Apple need to grow their empires - content.

And existing content companies such as Disney want more of it.

Cable and free-to-air television, which have been two of Murdoch's means of content distribution, have been undermined by broadband, which is delivering content via the internet directly to subscribers.

His satellite operations in Europe are valuable - and were to be part of the package sold to Disney - but regulators are clipping his wings on expanding beyond his current 39 per cent stake in Sky.

Disney is speculated to be interested in Fox's movie studio, TV production and international assets such as Star and Sky, as well as entertainment networks such as FX and National Geographic.

Given the appeal of these assets, Murdoch should have no problem maximising the sale price.

But such a deal would hollow out the company, control of which was slated to be passed to the younger generation of Murdochs. Sons Lachlan and James have been running it now for a couple of years.

The second element of the corporate restructuring involves the merger of what would be left of 21st Century Fox and News Corp, which houses the international print assets and the pay television business Foxtel in Australia, plus the fast-growing, Australian-based digital real estate business REA.

News Corp released its profit on Friday, which, while better than expected, was marked by sagging revenues from print advertising but strong growth from digital real estate and tight control of costs.

Meanwhile, in the midst of potential corporate upheaval, activist shareholders will this week take another crack at attempting to unwind 21st Century Fox's dual-class voting structure.

This has been the means by which Murdoch has been able to control the company (with 38 per cent of the votes) despite having an economic interest of only 14 per cent.

Such attempts have been an annual feature of this company's annual meeting but to date have been unsuccessful - in part because of the support provided to Murdoch by billionaire investor Prince al-Waleed bin Talal.

However, his stake has been sold down and may no longer be within his control thanks to his being one of 11 Saudi princes placed under house arrest this week.

It is certainly a complicating factor, but it could be that a 21st Century Fox with democratic governance would be equally willing to sell the jewel assets for a handsome sum.

It could be that the potential asset sales within 21st Century Fox will garner Murdoch some shareholder support and offer him a reprieve.

Twenty-first Century Fox reported this week that its quarterly earnings per share were down marginally but in line with expectations.

But the update was vastly overshadowed by the corporate speculation on asset sales, which saw the company's share price jump from $US24.92 to $US28.70.

Any move to shrink the empire will have a limited effect on Murdoch himself given he is 86. But it will significantly affect the legacy that James and Lachlan will manage.

When Murdoch moved to the back seat in the management of 21st Century Fox a few years back, he provided a governance framework for his sons to share the task - Lachlan was joint chairman of both News Corp and 21st Century Fox and James became the chief executive of the latter.

Management is one thing, but ownership is another.

Over the past week, there has been a swirl of talk that Rupert Murdoch is unhappy with aspects of James' management.

The Guardian said this week the decision to even consider a sale of assets to Disney (or anyone else) raises the prospect that Rupert has become disillusioned with James' strategy at Fox and the Sky deal.

It cited the Hollywood Reporter, which reported that Rupert had been telling people the Sky deal risked distracting Fox and was "James' baby", as well as the fact he is concerned his younger son is too fired up, with Lachlan the steadier hand.

This story Will Murdoch lose his crown? first appeared on The Sydney Morning Herald.