Rupert Murdoch has strengthened his hand in his quest to acquire Time Warner. 21st Century Fox president-chief operating officer Chase Carey is said to have pledged to make a long-term commitment to stay in his top management role should the deal come to pass, according to a source close to the situation.
In June, Carey set a two-year contract with 21st Century Fox, which came on the heels of the appointments of Murdoch scions James and Lachlan to more prominent corporate posts in the media giant that remains tightly controlled by the Murdoch family trust.
Carey’s current deal runs through June 30, 2016, though it has a clause that allows him to exit at the end of next year. To do so, he has to give the board six months notice of his intention to step down, which means Carey could potentially announce his departure as early as July 1, 2015.
If Fox is able to secure an agreement with Time Warner — at present that’s still a big “if” — it will undoubtedly take months, if not a year, for the Justice Department, the FCC and other regulators to review the deal. Having less than 18- to 24-months left on Carey’s contract has been a concern for investors, because a tie-up as mammoth as Fox-Time Warner will require the guidance of a seasoned operating exec accustomed to overseeing disparate businesses spread around the world. Carey is respected and admired in Wall Street circles as one of the strongest all-around managers in the media biz.
Sources said Carey’s willingness to commit to seeing the acquisition through has become known internally at Fox and has been communicated to key investors in recent days as Murdoch tries to build support in the investment community for the mega-merger. A rep for Fox declined comment on the matter.
Carey by all accounts its said to be adept at juggling the competing demands of executing (and sometimes tempering) Murdoch’s vision, managing Fox’s division leaders as well as pursuing his own agenda. His steely resolve in 2009 to command hefty retransmission consent fees from MVPDs for Fox’s O&Os stations set an industry precedent — after a New Year’s Eve marathon of negotiating sessions with Time Warner Cable — that has improved the economics for all network-affiliated broadcast TV stations.
James Murdoch has taken on more corporate responsibility in the past few years, most recently he was named co-COO under Carey in March. At the same time Lachlan Murodch was named non-exec co-chairman of Fox and its News Corp. sibling, a role seen as something as an apprenticeship with his father.
But neither son is viewed as ready to oversee the integration of assets as huge as HBO, Warner Bros. and Turner Broadcasting with Fox’s worldwide holdings. Without the assurance that Carey, 60, will remain with Fox for at least a few more years, Murdoch would have a harder time drumming up investor enthusiasm for the ambitious takeover.
Media biz watchers are expecting to hear more discussion this week of the proposed combo on Aug. 6, when Fox and Time Warner report second quarter earnings. Fox went public with its $80 billion bid on July 16, a month after it was rejected unanimously by Time Warner board members as too low. Fox has publicly kept quiet for the past two weeks but industry insiders say it is clear that Murdoch and other Fox board members have been working the phones, gathering intel and attempting to recruit allies on the Time Warner board before making a new offer. The degree to which Time Warner has forcefully rejected Fox’s unsolicited advances has surprised the Fox camp, a knowledgable source said, given how much the company, which was once the world’s largest media conglom, as slimmed down through spinoffs and divestitures in recent years.
Carey is key to any Fox-Time Warner transaction because the integration would need to be spearheaded by an exec with deep understanding of Fox’s far-flung operations. At the same time, industry observers say, there’s no obvious operational superstar in the Time Warner ranks, beyond CEO Jeff Bewkes, who rivals Carey’s experience and track record as a manager.
Carey has been a top lieutenant of Murdoch’s since the late 1980s, rising through the ranks on the television side. He left the Fox/News Corp. fold in late 2003 to run DirecTV after News Corp. sold the satcaster to Liberty Media. Carey returned to News Corp. in 2009 after Peter Chenin exited the president-COO post. He was instrumental in shepherding the 2012 corporate split that created the new 21st Century Fox entity to house Fox’s media and entertainment operations while publishing assets stayed under the News Corp. banner.
(Pictured: Chase Carey, right, with Rupert Murdoch at the 2012 Allen & Company conference in Sun Valley, Idaho.)