That question seems to intrigue News Corp watchers far more than any debate about succession plans following today’s announcement that Deputy COO James Murdoch is relinquishing his role as executive chairman of the UK publishing unit. News Corp shares are up about 2% at mid-day, a contrast to the overall market which is slightly down. And many believe it’s because James’ departure from the publishing business gives investors a little more reason to hope that Rupert might ditch some or all of his newspapers. He loves the assets, but the Street considers them to be growth-challenged distractions. Wells Fargo Securities analyst Marci Ryvicker calls the news about James “one sign” that newspapers “may be spun, sold or otherwise shed.” Yesterday COO Chase Carey said that News Corp recognized such a move might help its stock price, which he says is “woefully undervalued.” But he tried to douse any belief that a plan to unload newspapers is on the company’s front-burner. “Our focus is on managing these businesses and improving profitability,” he said.

Why so little attention to James and his role in the line of succession?  It’s now a foregone conclusion that he’s already too damaged to rise following the hacking and bribery scandals that took place at News Of The World and other papers under his watch. Yesterday Sue Akers, the deputy police commissioner overseeing investigations into alleged illegal practices by journalists, told an inquiry into media ethics that The Sun had a “culture … of illegal payments” to officials for news tips. Now every signal from the company indicates that Rupert’s oldest son, Lachlan, is back in the CEO’s good graces: Lachlan deeply disappointed his dad in 2005 when he resigned as Deputy COO and returned with his family to Australia following several clashes with Fox News chief Roger Ailes. But two weeks ago it was Lachlan — not James — who joined Rupert in a visit to London to assure reporters at The Sun that the company continued to support the paper even after providing police with information that led to the arrest of several reporters. (This past weekend the company introduced a Sunday edition of The Sun.)

News Corp is shrewd enough about public relations to know what it needed to do to if it wanted to challenge the view that James has been marginalized. It would have issued a release about James’ new responsibilities, instead of leading with the fact that he’s leaving News International. But the company seems to hope that the news will just be greeted with a shoulder shrug. “Really, there’s little change,” Fox Networks Group President David Haslingden just told investors at the Morgan Stanley Technology, Media and Telecom Conference. James was named Deputy COO about a year ago and “remained involved in the UK newspapers longer than we had anticipated due to the changes taking place there….This is probably where we thought we’d be a year ago.”