News Corp.'s Carey moves on

Loss of DirecTV dims the luster of the satellite business for Fox veteran

For almost two years, News Corp. Co-Chief Operating Officer Chase Carey had been trying to build a worldwide satellite distribution company that would be unrivaled by any other in the entertainment industry. But then Charlie Ergen had to go and ruin it all by buying DirecTV out from under him (pending approval from various regulatory bodies).

After mulling the implications of that deal on News Corp.'s own satellite plans and considering other possible duties at the company, Carey opted to resign last week.

If News Corp. had won DirecTV, it would have been the crown jewel in a set of satellite assets that the company hoped to spin off into a separate publicly traded company: Sky Global Networks, now an internal division of the company, which Carey headed as president and CEO.

News Corp. has extensive satellite holdings in U.K. and Europe (BskyB), Asia (Star TV) and Latin America. Reached last week, Carey acknowledged that, when DirecTV went to EchoStar, it put a major crimp in the News Corp. satellite strategy.

Carey, a 15-year News Corp. veteran, formerly Fox Television's chairman and CEO said "the challenges and opportunities just aren't the same."

Sources stressed that the decision was Carey's alone and that he wasn't taking the fall for News Corp.'s failure to cut a deal on DirecTV. "Rupert loves Chase," says a company insider. "He tried to convince him to stay."

Carey confirms that he has had numerous conversations with Murdoch about what he might do next at the company. "They were always friendly, and, while he would have liked me to stay, he understood my reasons for the making the decision I've made."

While Carey looks for the next new thing, careerwise, he'll remain a member of the News Corp. board and serve as a consultant to the company for one year.