After twenty years with News Corporation, Peter Chernin, president and chief operating officer is calling it quits. He is expected to depart the company that spans Fox network, Dow Jones and Asian pay-TV venture Star when his contract expires on June 30.
The 57-year-old executive is leaving to produce programming, according to a statement released tonight. Chernin had been negotiating for months with boss Rupert Murdoch, Chairman and CEO of News Corp. and described his ultimate decision to leave as a "difficult one."
The long time Murdoch lieutenant, will launch a Fox-based production company later this year, among other ventures and will continue his charity work for Malaria No More.
In an interview with B&C last October, Chernin gave little indication of his plans to stay at News Corp. beyond June 2009. Asked what he would be doing otherwise, Chernin joked, "I'd like to ski 200 days a year."
When asked on a recent earnings call how contract talks were going, Murdoch responded, "Peter and I are continuing our conversations, and they're private and that's all there is to it. Nothing more for me to say, and we won't take any further questions on that. It's a confidential matter."
Talks had previously been described as "constructive and friendly."
Chernin, whose stewardship of News Corp. has been lauded on Wall Street and in Hollywood, was inducted into the Broadcasting & Cable Hall of Fame in 2006.The company always seemed to nab the right deal at the right time landing American Idol for Fox, then subsequently bagging MySpace.
The executive is credited with helping to create online video destination Hulu in partnership with NBC Universal; negotiating the end of the writer's strike, and managing the evolution of Fox's biggest show, "American Idol." He was also knownto the media as an executive with encyclopedic knowledge of the company and as a straight shooter who always tried to answer tough questions. Chernin once combed an Fox upfront after-party querying editors on the potential of the new programming line-up.
Chernin, a native of Harrison, New York, began his career in book publishing and worked as a publicist at St Martin and then as an editor at Warner Books in New York. His break in TV came when producer David Gerber called looking for book folks to develop miniseries.
Chernin landed at Showtime and later Lorimar Film Entertainment. In 1989 Fox Broadcasting Chairman Barry Diller tapped Chernin as president of entertainment to help him expand the then-fledgling network. Fox was still a shaky fourth network. "What appealed to me was the fact that it was a new operation at someplace that was really trying to grow and, in some sense, build a history," Chernin said at the time.
Chernin focused on young viewers, launching The Simpsons,In Living Color and Beverly Hills 90210. Although Fox's ratings faltered in 1992, the network seemed to be finding its place. At the same time, Chernin's political savvy and ability caught Murdoch's attention.
That year, Murdoch moved Chernin to the ailing 20th Century Fox film studio, which he was credited with turning around. In 1996, Chernin became president/COO of News Corp., with responsibility for all North American operations.
Commenting on his departure, Chernin said in a statement tonight, "Next week marks my 20th anniversary with News Corporation and the Company has been a huge part of my life. During my years here I have had the great privilege to work for one of the true visionary leaders of our time, Rupert Murdoch. As a leader, Rupert is unparalleled. He is bold, entrepreneurial, innovative, creative and incredibly supportive. As a partner and friend he has been inspiring, fascinating, and most of all, tremendous fun."
The executive will not walk away empty handed. A Business Week article estimates that Chernin could depart with a package worth some $40 million. Chernin's salary for 2008 was $8.1 million with an additional $10.2 million coming from restricted stock awards and $11.25 from non-equity incentive plan compensation, according to Forbes.com. With additional compensation he reportedly earned $28.8 million in 2008.
News Corp. finished the day at 5.78, down 26 cents (4.3%). On the day it ranged from 5.74-6.25. The price fell steadily throughout the afternoon. Shares have fallen 70% in the last 12 months.
His departure comes at a tricky time for News Corp., wrestling with secular and cyclical trends blighting media companies across the board.
On the company's most recent earnings call, Murdoch described the current business environment as "The worst global crisis we witnessed since News Corp, was established more than 50 years ago." The company reported an $8.4 billion write down and a net loss of $6.2 billion for the final quarter of the year. It has been hammered by falling advertising revenue at its newspaper and broadcast TV units while its cable assets have fared better.
It also leaves something of a power vacuum inside the corporation's Avenue of the Americas headquarters. According to a News Corp. statement, the Los Angeles based Fox businesses will report to Murdoch after Chernin's departure. "Peter's contributions to the Company over the past two decades have been immeasurable. He has led important businesses and nurtured talented managers," said Murdoch in the release. "We are fortunate to have such a strong and seasoned group of leaders at our Fox companies and we are confident that our success will continue. To that end, Peter and I will work closely over the next four months to ensure an effective transition."
The departure clears the way for one of Murdoch's grown children to step into a bigger role. James Murdoch, who runs News Corps' Europe and Asia operations is the most likely candidate, though brother Lachlan is still on the News Corp. board. British-based sister Elisabeth Murdoch is involved in programming ventures through her company Shine which recently acquired Ben Silverman's former production company, Reveille LLC. Besides Chernin one of Murdoch's most powerful executives is Fox News president Roger Ailes who might see an expanded role.
Already speculation about Chernin's other potential career options is heating up.In 2004, Chernin was once a contender to replace Michael Eisner as the chief executive at Disney. Pali Capital media analyst, Richard Greenfield, suggests Viacom would be a great home for the former News Corp. boss, though he notes that Chernin most likely has a non-compete.
In a blog post this afternoon Greenfield wrote, "Investors loath Viacom's senior management team (including chairman Sumner Redstone and chief executive Philippe Dauman) and would welcome a trusted executive such as Chernin (in both the Hollywood creative community and Wall Street), who oversaw tremendous growth in cable network and film assets at News Corp."
In a statement, Murdoch lavished an unusual amount of praise on Chernin, "Peter is a valued colleague and a trusted friend. There are few executives, at any company, that combine his maturity, his experience, and his skills as a communicator and leader – I will miss him. It is understandable that at this stage in his life he would want to do something new after serving News Corporation and our shareholders so well for so long."