Jeremy Warner: There goes another Murdoch lieutenant

Outlook Peter Chernin's resignation as chief operating officer at News Corp will come as no surprise to followers of Rupert Murdoch's far-flung media empire. Mr Chernin is only the latest in a long line of executives to realise that unless your last name is Murdoch, you are never going to get to be top dog.

Mr Murdoch senior has never had much time for "contenders". Those who develop airs and graces above their station get rapidly cut back to size. As it happens, that was never one of Mr Chernin's traits, but he must have figured out by now that there is little point in hanging around in the hope the old man drops dead, or, rather less likely, decides voluntarily to hang up his boots. The Murdoch family's grip on the business is too strong to allow Mr Chernin ever to take control. When and if Mr Murdoch Snr does let go, it will be to another Murdoch. Besides, Mr Chernin's exit package looks too good to refuse. Mr Murdoch is nothing if not generous to his former lieutenants. Mr Chernin even gets to have continued use of the corporate jet.

Among the Murdoch clan, there's only one runner left in the race for the succession. James Murdoch is now unambiguously the heir apparent, though by mutual agreement he seems not yet to be ready for either his father's or Mr Chernin's shoes. Mr Murdoch Snr has tried to lure his son back to head office in New York before, but James has refused, preferring instead to stick to running the European television and newspaper interests. He loves it in London and doesn't want to move. So for the time being, the father must take on Mr Chernin's chores alongside his own. It's not going to be easy, for Mr Chernin was News Corp's entré to Hollywood. However war-hardened the father, these are treacherous waters for the uninitiated. We'll see how he goes, but ultimately the son is likely to prove rather more effective in American television and films than the older man.

In any case, few will want to fill Mr Chernin's shoes right now knowing that the job would only be an interim, bench-warming position. James is still almost impossibly young for the top job, but he proved himself a formidable chief executive of BSkyB. We'll forget the doomed investment in ITV, which has cost BSkyB an arm and a leg. No doubt he will be judged "ready" at some stage in the next year or two.

Conditions are hardly easy for any industry now, but there are few more severely affected by the downturn than media. Already in the midst of profound structural change in which it is not yet clear how the new can be made to generate as much revenue as the fast-dying old, the media industry needed a synchronised global recession like a hole in the head.

Yet of all the big media players, News Corp seems better placed than most to weather the storm. Being fat, big and diverse is just the ticket for a prolonged winter, for it means there's plenty of scope to slim to meet radically changed circumstances. Ironically, it is the lean and mean ones, the ones that have been run highly effectively for cash during the good times, that tend to die off first in a recession.

Rupert Murdoch learnt his lesson from the last downturn, when excessive debt brought him to the brink of collapse. Despite the top-of-the-market price he paid in cash for The Wall Street Journal, he heads into the current recession relatively ungeared, with what looks to be a resilient and diverse revenue base.

Conventional business analysis has already been repeatedly shattered by the current implosion, so it is possible that Mr Murdoch too will at some stage find himself struggling to meet his payroll costs. Yet hosts of others will stumble before he does. A rescue rights issue together with asset sales and further deep cuts in programming and staff are on the menu at ITV, a company which, though it has been struggling operationally for years, wasn't thought to have a debt problem of any significance until the credit crunch hit. Now even relatively small amounts of debt seem to make the difference between life and death.

Never before has business been so much about cash. Mr Murdoch reckons he's still generating more than enough to deal with any refinancing he needs to do for the next year or two. He's said to have been having a ball attempting to revitalise The Wall Street Journal. Now, like everyone else, he's going to have to switch his attention to the grubbier business of survival.