Updated: Chase Carey Returns to News Corp.

News Corp. watchers have long debated if and when James Murdoch may move into a broader corporate position at the conglomerate.

It seems that the son of chairman and CEO Rupert Murdoch will have to wait for a further potential ascension at News Corp. for at least a while now that his father has brought back trusted advisor Chase Carey in a role that is broader than first expected.

News Corp. made things official after the market close Wednesday, confirming that Carey is returning to the conglomerate as deputy chairman, president and COO, effective July 1.

Reporting to Murdoch and based in New York, Carey, 55, will oversee all of the company’s global operations. A spokeswoman confirmed that the heads of all businesses will report to Carey. The company didn’t provide terms of his employment contract, but a source familiar with the situation said it runs for five years.

Carey’s appointment and addition to the board will come right after current president and COO Peter Chernin, who had focused mainly on the creative units, leaves his job. Murdoch had originally said he won’t need a deputy, but observers have long suggested he may need a right-hand man.

Meanwhile, Murdoch son James has served as chairman and CEO, Europe and Asia. When Chernin announced his departure earlier this year, some industry observers had predicted the Murdoch son could move into a broader corporate role sooner rather than later, while insiders have suggested he will need more time to expand his experience and boost his standing.

When it emerged late Sunday that Murdoch was trying to get Carey to return, talk focused solely on his taking the vice chairman role. Again, some observers took this as a sign that James Murdoch could move into the president and/or COO post in the near future.

Wednesday’s news suggests though that Murdoch senior wants to give his son more time to gain experience by running an important part of the conglomerate and give the company time to evaluate a potential promotion later.

Said one observer: “I think Chase is coming in to bridge the time gap between Rupert and James.” Similarly, a News Corp. watcher on Wall Street suggested Carey could leave the president and/or COO role to Murdoch junior over the mid-term if things go his way.

Most recently president and CEO of satellite TV giant DirecTV (and its corporate predecessor) since 2003, Carey had spent 15 years as a senior executive at News Corp. and had long been known as a trusted adviser to Murdoch. The firm’s global TV operations were among his focus areas.

“Chase has been one of my closest advisers and friends for years and I am delighted we’ll once again be working together across our businesses as we face the challenges and great opportunities ahead,” said Murdoch.

“Under Rupert’s leadership, News Corporation has always been the boldest, most innovative media company in the world,” said Carey. “With its leading franchises, News Corporation’s growth opportunities are second to none, and I am thrilled to be returning at such a transformative time for our businesses across the globe.”

Meanwhile, DirecTV said it has formed a committee of directors tasked with searching for a replacement. In the interim, Larry Hunter will act as CEO in addition to his jobs as executive vp of legal, HR and administration. Carey had a DirecTV contract through the end of 2010, but Liberty let him out of it. It was not immediately clear if Liberty would get anything in return.

Under Carey’s leadership, DirecTV’s subscriber base grew from 12 million to more than 18 million in the U.S., while free cash flow rose from break-even in 2003 to $1.7 billion last year.