Courtesy of Richard Siklos, Fortune’s media writer extraordinaire, who just posted this on the website on Tuesday:

“In the weeks that Rupert Murdoch was locked in unsuccessful negotiations to keep his longtime No. 2 at News Corp., the media baron also had to accept his daughter Elisabeth’s decision to turn down a spot on the company’s board, sources told Fortune.”

That’s exciting, from a soap-opera-meets-financial-news angle, because Murdoch is letting longtime right-hand man Peter Chernin leave the company, in part because the media baron has a sense of familial duty. That is to say, many people say he wants his children to take over the company. The most likely choice is his son James, 36, who is active in the company’s UK and Asian operations. Having said that, Elisabeth is no slouch in the media department.

Here’s Siklos again:

On the one hand she has a sense of duty and is one of four grown Murdoch children who will one day inherit the family’s controlling votes. But she also has a conflict of interest with Shine, the big U.K. production company she has built up over nearly seven years. Under U.K. broadcast regulations, Liz Murdoch’s presence on the News Corp. board would have rendered Shine illegible for the 25% of programming budgets that big British broadcasters like the BBC and Channel 4 are required to spend on independent production houses that have no links to broadcasters. Two people close to Murdoch said that this pool of funding represents a large proportion of Shine’s business, and that there are other advantages to being an independent producer that allow Shine to more easily retain the rights to formats it creates. Being on the News Corp. board would be a conflict for Shine because News controls British Sky Broadcasting, the big U.K. satellite TV business, as well as numerous Sky and Fox TV channels that air there. Liz Murdoch owns 63% of Shine and another big backer is Sony Pictures Entertainment, which has 20%.

Dad should understand. After all, it’s just business.

Whatever it is that drives Rupert Murdoch’s offspring out of the businesses he owns may also bring them back.

Could Elisabeth Murdoch return to daddy’s fold? Sure, according to a glowing profile in the New York Times on Monday of Rupert Murdoch’s elder daughter from his second marriage.

Once ruled out as a possible heir to Murdoch’s News Corp global media empire after her 2000 departure from Murdoch-controlled BSkyB to strike out — quite successfully — on her own, she stirs speculation anew over a possible return … someday.

NYTimes: “Could I foresee a day going back to News Corp.?” she said. “Yes, I could. Do I know how, or when, or what shape that would take? No. I don’t really ever want to leave Shine. So I don’t know how it would happen one day, but it’s certainly not out of the cards.” 

Lachlan Murdoch, Murdoch’s elder son, also left his post as deputy chief operating officer of News Corp in 2005, and is also seeking out media investments.

Elisabeth explains why the apples never fall far from the tree: In growing up Murdoch, she said, “Media was never a choice. You either have it in your veins or you don’t have it in your veins. I couldn’t imagine why you would want to do anything else.”

Will James Murdoch, anointed the heir apparent after his return to News Corp last year to run its Asia and Europe operations, have competition?

(NYTimes)

Keep an eye on:  

• MySpace close to a deal with major record labels like Sony BMG and Warner over a digital music joint venture. (NYPost)
• CBS has nuked “Jericho,” the low-rated post-Armageddon drama that was briefly brought back from the dead by fan demand. (Hollywood Reporter/Reuters)
• The Wall Street Journal’s transition to more breaking news and shorter articles will continue in the coming weeks with a makeover of its Marketplace section. (NYTimes)
• Traditional media companies jumps on the vertical ad network bandwagon.(AP)