Stern steps in, could initiate p'gramming moves

NEW YORK — News Corp. has chosen the man to run its DirecTV operation, confirming reports that Mitch Stern will shift over from chief executive of the Fox TV Stations Group.

But News Corp. is still facing additional government scrutiny over its deal to buy DirecTV that could delay the takeover beyond the end of the year.

Stern’s move will take effect early next year; the exact date is still uncertain because he succeeds Roxanne Austin, who will ankle her post as president and chief operating officer of DirecTV on the day News Corp. takes a controlling stake in the satellite distributor.

News Corp. and DirecTV officials have said publicly that they expect all of the regulatory approvals by early January.

Another executive likely to take a major role in DirecTV is Bruce Churchill, most recently COO at News Corp.-owned Star TV in Asia. News Corp., which enlisted Churchill to work on the transition, is grooming him to take charge of DirecTV’s extensive Latin American operations.

News Corp. was mum on who will replace Stern as chief exec of the Fox TV Stations. The two leading internal candidates are Tom Hurwitz, president of station operations, and Jim Burke, president of sales for the station group.

Stern is also expected to eventually put his stamp on DirecTV’s programming operation by anointing Frank Cicha, who now serves as senior VP of programming for the Fox Stations.

Austin was named prexy-COO in June 2001. Since that time she increased sales by 37% to a projected $7.6 billion in 2003 while adding some 2.6 million new subs and trimming churn to 1.5% per month.

Chase Carey, the CEO-in-waiting of DirecTV’s parent Hughes Electronic Corp., was complimentary of Austin in a News Corp. statement Friday, thanking her for “effective leadership through a very challenging period and difficult circumstances at DirecTV.”

“She brought a singular focus and boundless energy to DirecTV,” Carey said, “that have improved its performance in the last two years and positioned it for future growth.”

Still, News Corp. faces major challenges in restarting the growth engine for the 12 million-subscriber service. Chairman Eddy Hartenstein has recently gone out on a limb, suggesting DirecTV should hit 20 million subs within the next several years. Some analysts say that’s a tall order even for Rupert Murdoch’s satellite-savvy team, particularly given the cable industry’s stepped-up competition (thanks to digital and built-in digital video recorders).

News Corp. may still have to jump through a few hoops to secure the regulatory approvals that would signal the completion of its $6.6 billion purchase of a 34% controlling stake in Hughes.

The Federal Communications Commission has asked News Corp. to make several alterations to its plan involving fair access to its program networks before the FCC flashes a green light.

Regulators are under pressure to ensure that DirecTV, under News Corp.’s powerful umbrella, does not withhold Fox-owned networks, or Fox-owned TV stations, from cable operators or engage in unfair pricing. In this scenario, News Corp. could lure cable subscribers to satellite by offering them networks that it had kept back from cable operators.

(Michael Schneider and John Dempsey contributed to this report.)

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