Carey's Contract No Barrier to Move
DirecTV president and CEO could exit current post with 60 days notice
By Claire Atkinson -- Broadcasting & Cable, 6/1/2009 12:33:17 PM
DirecTV president and CEO Chase Carey is negotiating a return to News Corp., according to several sources familiar with talks. The executive is set to return with a possible vice chairman title and as number two to chief executive Rupert Murdoch. He would replace Peter Chernin who is departing at the end of this month to run his own production outfit.According to News Corp. insiders, one stumbling block to talks is Carey's contract with the satellite provider, DirecTV which is owned by Liberty Media, and was once part of the News Corp. fold. In a note today, Barclays Capital cable and satellite analyst, Vijay Jayant, believes Carey's contract suggests he might be able to exit with a 60 day notice period.
Carey's contract does have a non-compete clause which would stop him from working for a competitor through 2010, though Barclays believes News Corp. would not be viewed as such. The contract's definition of a competitor reads: "Any corporation, firm or business, or any affiliate of any corporation, firm or business that directly or indirectly engages in any business which competes with the Company or any of its affiliates in the multi-channel video programming distribution business in the United States or in Latin America."
While News Corp doesn't own any cable distribution assets it does own a large stake in long form video play Hulu alongside NBC Universal, ABC and Providence Equity Partners. Barclays' Jayant thinks that Carey's departure seems logical given reports that John Malone may look to sell DirecTV to a teleco. The analyst also estimates that Carey would lose some $10 million in restricted stock and options valued at $6.7 million. "We believe that, if News Corp., wanted him on board, the need to make up this compensation would not be a barrier given that Peter Chernin earned nearly $29 million in 2008," said the note.
Barclays views the possible departure of Carey as a negative to DirecTV but notes the company has a strong management bench from which to draw a successor
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