* Lachlan returns to News fold after some spectacular failures
* Murdoch media empire "like the royal family" - academic
* Lachlan to split time between New York and Sydney
By Jane Wardell and Byron Kaye
SYDNEY, March 27 (Reuters) - Lachlan Murdoch's appointment to senior positions within his father Rupert Murdoch's media empire marks the return of the prodigal son.
Nearly a decade after walking away from the News Corp inner circle in New York to set up his own investment company and settle in Sydney with his young family, it appears Lachlan has accepted the mantle of successor, whether alone or jointly with younger brother James.
"It's like the royal family," said Alan Knight, professor of journalism at the University of Technology in Sydney. "Murdoch senior has always treated News Corp as a family business and this guy is just basically accepting his inheritance."
Lachlan, 42, will become non-executive co-chairman of both entertainment company 21st Century Fox and publishing operation News Corp, sharing both roles with his father. He rejoins the company after quitting as deputy chief operating officer in 2005 amid friction with other News Corp executives.
However, Lachlan's track record after striking out on his own has been marked by several spectacular failures.
His first move, a highly leveraged A$3.3 billion ($3.04 billion) bid with friend and fellow media dynasty heir James Packer for pay-TV company Consolidated Media Holdings fell through as the global financial crisis took hold.
Another ill-fated foray with Packer was the creation of telecommunications company One.Tel during the dotcom boom. The pair lost A$1 billion when the company collapsed.
As Packer started to exit the media business in favour of building a gaming empire, Lachlan paid A$1.50 per share to purchase a 9 percent stake from his friend in Ten Network Holdings Ltd in 2010.
Shares in Ten, Australia's third ranked commercial channel, are now at A$0.27, down 72 percent over the past three years, and it lost almost A$285 million last year. Lachlan is stepping down as non-executive chairman and from the board to avoid conflict with his News Corp roles.
"He has never shown any particular innovation in journalism, but he is part of the family, isn't he?" said Knight.
Still, others say that Lachlan had proved himself as chairman of News Ltd before leaving the family firm.
"He wasn't backward in coming forward with his thoughts on what the paper was doing well and what it needed to improve," David Penberthy, a former editor of Sydney's Daily Telegraph, told local publication The Monthly last year.
A source who worked with Lachlan in his media investments said it was widely understood that the potential heir wanted to prove himself without his father's backing.
Even though the Channel 10 investment failed financially, it allowed Lachlan to stretch his wings as he attempted to direct the upstart station into a more "grown-up" competitor for its established rivals, said the source, who requested anonymity as he was not authorised to speak on the record.
More successfully, Lachlan bought a 9 percent stake in regional free-to-air television company Prime Media Group Ltd in 2009, selling it for a A$10 million profit in 2012.
Also in 2009, he spent A$110 million buying half of DMG Radio Australia, owner of the Nova radio network, taking full ownership three years later. Under his chairmanship, Nova has become Australia's No.1 radio network.
News Corp said Lachlan would divide his time between New York and Sydney, allowing him to continue to develop his separate businesses.
Lachlan, while London-born and U.S.-educated, is seen as the most "Australian" of Murdoch senior's children. His English-born, Australia-raised model wife Sarah has starred as host of the local version of "Next Top Model", while two of his three children were born in Sydney.
As recently as last June, he told The Australian Financial Review when asked about the prospect of inheriting his 83-year-old father's empire: "No. No, I've moved on from that."
Still, the signs were there that the door was not closed.
He remained on the board during his years in the wilderness and had been seen as his father's likely successor before he left.
Among his siblings, he has arguably the most media experience and was untainted by the British phone hacking scandal that ensnared younger brother James.
"For a billionaire media mogul with a supermodel wife, he's actually a really down-to-earth guy," said Joe Hildebrand, a columnist at the Daily Telegraph in Sydney. "He does just really love the media and is really passionate about it." ($1 = 1.0841 Australian Dollars) (Additional reporting by Maggie Lu Yueyang; Editing by Raju Gopalakrishnan)