Rupert Murdoch has thrown his troops another curveball, and his name is Chase Carey.
After a whirlwind courtship during the past few weeks, DirecTV prexy-CEO Carey has returned to the News Corp. fold in the vaunted role as Murdoch’s No. 2, overseeing the company’s global operations. He’ll serve as deputy chairman, president and chief operating officer, based in Gotham, and will join the News Corp. board of directors July 1.
All of News Corp.’s operating units will report to Carey other than the company’s general counsel, Lawrence Jacobs, and chief financial officer David DeVoe. Carey fills the management void left by Peter Chernin, whose decision to resign as prexy-COO effective June 30 spurred a March management shakeup on the Fox lot to which insiders were just starting to adjust.
Carey’s appointment came as a surprise, but the jolt was mitigated by the fact the exec, known for sporting a handlebar moustache, is a well-known commodity within News Corp. He spent 15 years as top Murdoch lieutenant, mostly in the conglom’s TV operations, and from 1996-2002, he shared co-chief operating officer duties with Chernin.
More unsettling to execs was the speed and secrecy with which Murdoch made Carey’s appointment — after saying, when Chernin’s resignation was announced in February, that he had no plans to directly replace him (Daily Variety, Feb. 24).
But Murdoch appears to be in a mood to significantly reshape his management hierarchy. Insiders pointed to the surprise decision to send Fox Searchlight prexy Peter Rice across the lot to become chairman of entertainment at the Fox network as another example of a stealthy Murdoch move. Yet another unexpected decision was the one to recruit former AOL boss Jon Miller to serve as News Corp.’s digital czar.
Few on the Fox lot have had much opportunity for high-level discussions about Carey’s appointment. But there was speculation that because of his base in New York, he will be less hands on with the entertainment businesses than Chernin had been, nor does Carey come from a creative background as Chernin does. That probably means more leeway for the execs who were given expanded portfolios in the wake of Chernin’s resignation announcement.
Fox Filmed Entertainment co-chairs Tom Rothman and Jim Gianopulos gained oversight of Fox’s sizable TV production operation, while Fox Networks Group CEO Tony Vinciquerra took on oversight of Fox Broadcasting Co. At the same time, Chernin’s pending departure left Fox without an uber-exec with the clear authority to settle disputes between the network and studio, as well as other divisions. Now, Carey will fill that referee role.
Other big questions raised by Carey’s move is how he managed to extricate himself from an employment contract with DirecTV that ran through the end of next year — and what Murdoch gave DirecTV parent Liberty Media in exchange.
The Carey shuffle back to News Corp. completes the loop that began when Murdoch appointed him CEO of DirecTV in late 2003, when News Corp. acquired a controlling interest in the satcaster after pursuing it for years. But just three years later, Murdoch soured on DirecTV and gave it up in an asset swap with John Malone’s Liberty Media.
Carey stayed with DirecTV after the swap was completed. But Murdoch has a long history of reuniting with senior execs who leave the News Corp. fold for one reason or another.
In announcing Carey’s appointment, Murdoch called the exec “one of my closest advisers and friends for years.” Carey said he was eager to return to the company “at such a transformative time for our businesses across the globe.”
Meanwhile, DirecTV said it would begin a search for a new prexy and CEO. Larry Hunter, the satcaster’s exec veep of legal and human resources, was named interim CEO.
Carey’s departure from DirecTV spurred speculation that Liberty will step up its efforts to sell the satcaster. AT&T is rumored to be a suitor for the company.
Liberty is in the midst of a complex spinoff of DirecTV and a handful of other assets into a separately traded entity. Through this process, Malone, who serves as chairman of DirecTV, will reduce his controlling interest in the satcaster from about 50% to about 24%, making it more attractive to a prospective buyers.
Carey, on the other hand, was said to be an advocate of keeping DirecTV independent. This conflict may have contributed to Malone’s willingness to let him loose.
In a news release announcing Carey’s departure, DirecTV noted that under the exec’s stewardship, the satcaster grew from 12 million to more than 18 million subscribers and went from breakeven in 2003 to a cash flow of $1.7 billion.
Carey is a well-regarded exec on Wall Street, but the market had a ho-hum reaction to his appointment, with News Corp. shares dropping nearly 4% to $11.60 on a down day overall for key indexes. DirecTV shares fell nearly 2% to $22.69.