(Reuters) - Saudi Arabia's Prince Alwaleed bin Talal is in no doubt that James Murdoch is ready to take a much bigger role at Twenty-First Century Fox, by far the largest part of the media empire that James' father Rupert Murdoch built.
"James is a giant!" said Alwaleed, a Murdoch family ally and one of Fox’s top shareholders with a 6.6 percent voting stake, in an interview. In particular, Alwaleed points to what he says is James' ability to grasp the digital world and understand how it is transforming the media landscape, adding: "I really love him!"
The billionaire prince's seal of approval - and increasing acceptance of James by other shareholders - may be laying the ground for Fox to give the 42-year-old day-to-day control of the company sooner rather than later.
One person familiar with the family's thinking said James, who is currently co-chief operating officer with Chase Carey, could take over fully from Carey - who also holds the title of president - as early as the end of this year.
The source cautioned that the change hasn't been formalized and could be subject to delay. It is also unclear what title James would take or whether there is any possibility that Rupert Murdoch, 84, would relinquish the Fox CEO position to him anytime soon.
Carey's contract is set to expire on June 30, 2016, but he can leave the company as early as the end of this year with six months notice.
Fox declined to comment. James Murdoch declined to be interviewed for this article.
What is clear is that some key investors seem to be warming to the idea that James has the chops to run Fox. That was not always the case.
In interviews, some top investors who know James, and other people familiar with the company, describe him as curious and a risk taker like his father. But they also cite two big differences that they like: James is less sentimental about certain assets than his dad and he is more enthusiastic about courting shareholders.
In 2013, James and his older brother Lachlan, 43, were elected as directors of Fox – but only on the strength of votes cast by the family. Assuming the Murdoch family and Alwaleed voted for the two sons (the prince has previously said he tends to vote with the Murdochs), it means that 71 percent of the rest of the shareholders voting opposed James – and 90 percent cast their votes against Lachlan.
In contrast, after James was made co-COO and Lachlan co-chairman of Fox last year, only 24 percent of the independent stakeholders voting opposed both their board nominations if the same voting assumptions for the family and Alwaleed are correct. Fox declined to comment on those assumptions.
James "really works hard just like his father," said Saad Mohseni, chairman and CEO of the Afghan media company Moby Group, in which Fox holds a stake. "He doesn't get the benefit of the doubt. For him, every step of the way he has to prove himself."
If James gets Carey's role he will be running the day-to-day operations of a sprawling media behemoth with a market value of close to $73 billion. It owns cable assets, broadcast networks and movie studios, including Twentieth Century Fox movie studio, Fox News and Star India.
The Murdochs own 39 percent of voting shares in Fox and News Corp, the company that operates newspapers like The Wall Street Journal and book publisher HarperCollins, through a family trust. Fox split from News Corp in 2013.
The prospect of a Fox completely run by the Murdochs does still concern some investors.
Many shareholders say they have great respect for Carey, 61, a long-time Murdoch lieutenant who has worked in the role since 2009. The thinking: Carey is not only a good operator but he also keeps the family in check - especially when acquisitions are concerned.
"We are very happy with how things are now," said one top Fox shareholder, adding that having the Murdochs running the show in the top three positions without having anyone to provide an alternative voice wasn't a comfortable prospect.
A Harvard drop out, 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 the age of 23 and was soon installed as head of the company's Asian assets, including Star India. Four years later, he was named CEO of BSkyB, now known as Sky, that is 39 percent owned by Fox.
People close to James said one of his weaknesses was that he wasn't humble about getting big roles at the company from such an early age. He never quite accepted that he only got those jobs because he was Rupert's son, said one of these people. Still, they said James has now matured and that while he may have been brash at times when he was younger he was successful in improving the group’s businesses in Asia and Europe.
By far the biggest setback James faced was when he was in charge of News Corp's British newspapers and he had to deal with the phone hacking scandal at its UK tabloid newspaper The News of the World, which was closed as a result. Some of the paper's journalists were alleged to have illegally tapped phones and bribed officials in pursuit of stories.
While the alleged hacking occurred before James took charge, his critics said he failed to recognize the significance of the problem and didn't conduct as thorough an internal investigation as necessary. In one oversight, he admitted he didn't fully read an email sent to him in 2008 detailing allegations against the paper that were made by the English soccer players union.
However, a British parliamentary committee cleared James of any wrongdoing and the U.S. Department of Justice declined to prosecute News Corp and Fox after an investigation. James left London for New York in 2012.
For the past three years, James has worked with Carey and other Fox executives to learn about the U.S. media market and repair the damage to his reputation. He has started to emerge at industry functions like the annual media mogul confab in Sun Valley and as a keynote speaker at industry conferences.
One person who knows the family said that Rupert has been indifferent to investors his entire career. "James is more sensitive," this person said. Rupert Murdoch has often been perceived to do what he likes, especially as it concerns acquisitions, several investors said. One example that is often raised is News Corp’s $5.6 billion purchase in 2007 of Dow Jones, the publisher of the Wall Street Journal, an investment that was later written down by half.
Several sources say James played a key role in the decision not to make a hostile bid for Time Warner last year. He assured investors that Fox was going to be cautious on how fast and how aggressive it would be in its pursuit of Time Warner, fearing that it could overpay.
He was instrumental in last year's consolidation of its European pay-TV assets that led to BSkyB buying Fox’s stakes in Sky Deutschland and Sky Italia, resulting in a new pan-European pay TV company Sky according to people familiar with the matter. Along with those big investments he was also involved in some of Fox's digital investments in the next generation of advertising and TV viewing, including the purchase of a 5 percent stake in Vice, the acquisition of True [X], which helps broadcasters sell digital advertising, and an investment in Roku, the streaming video player, sources said.
"Every time I look behind me or I look ahead of me, I see James," said David Zaslav, CEO of Discovery Communications.
Prince Alwaleed even says if James had been at the helm he could have prevented one of the Murdoch empire's most embarrassing stumbles - News Corp's failure to develop MySpace after buying the social media site in 2005. "MySpace would now be flying," Alwaleed said, "and there would be no Facebook today."
Additional reporting by Nadia Damouni; Editing by Hank Gilman and Martin Howell