Murdoch Fox strategic review spurs Chernin speculation
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News Corp. Chief Executive Rupert Murdoch (above right) is in Los Angeles this week and next week to meet with top Fox executives on the West Coast.
Murdoch’s presence, and his scrutiny of the company’s entertainment businesses, has prompted increased speculation that Peter Chernin (above left), president and chief operating officer of News Corp., actually might be leaving the company after 20 years. Chernin’s contract expires in June. Chernin has been particularly tight-lipped about his plans, fueling anxiety among Fox executives who want to keep Chernin, who is admired by both Wall Street and Hollywood power players.
Chernin declined to comment.
Murdoch flew into Los Angeles from Australia this week after celebrating the 100th birthday of his mother, Dame Elisabeth Murdoch, along with about 600 friends. The 77-year-old Murdoch is fond of saying that his mum’s longevity bodes well for his own prospects of remaining at the helm of News Corp. for many more years.
Succession issues have bedeviled the company because Murdoch wants one of his children (he has six) to eventually run the global media empire that includes the 20th Century Fox film studio, Fox Broadcasting network, cable television outlets that include Fox News Channel, social network MySpace and a string of newspapers that includes his recently acquired jewel, The Wall Street Journal.
Some on Wall Street worry that Murdoch’s kids are not ready to manage the sprawling businesses that generated $33 billion in revenue last fiscal year. What’s more, it would be a particularly awkward time for a major executive transition because the recession has hammered media companies that depend on advertising and consumer spending for such non-essential purchases as DVDs.
Last week, News Corp. reported a $6.4-billion loss for the quarter ended Dec. 31. Its stock is down 65% from a 52-week high of $20.49.
During a conference call with analysts to discuss the results, Chernin seemed to play a less prominent role than he has in the past. Murdoch dominated the session, fielding questions about the entertainment properties that have long been Chernin’s specialty.
Then there was the sticky issue of Chernin’s contract.
Back during November’s earnings call, when Murdoch and Chernin were asked to characterize the negotiations, Chernin called them ‘constructive.’ Murdoch quickly jumped in: ‘I would characterize them as constructive and friendly.’
But last week, the same question prompted a more measured response. ‘Peter and I are continuing our conversations and they’re private and that is all there is to it,’ Murdoch said. ‘Nothing more for me to say and we won’t take any further questions on that. It is a confidential matter.’
Chernin remained silent.
Murdoch’s tour through Los Angeles is part of a strategic review of the company’s businesses that takes place every three years, say people familiar with the situation who did not want to be identified in discussing the sensitive subject. Murdoch will hold two more weeks of meetings with top Fox executives this month in New York.
If Chernin were to leave News Corp., he would be available to step into the top job at any number of troubled media companies, of which there appears to be no shortage.
People close to Chernin said it would be hasty to draw a conclusion about Chernin’s tenure and Murdoch’s visit (the CEO comes here more often than people think, they said). Chernin, 57, has been known to take his employment negotiations down to the wire. His last contract renewal, in July 2004, was announced three days before the new agreement went into effect.
— Dawn C. Chmielewski and Meg James
