Ch­ernin could guide Carey

Ru­pert Mur­doch’s pre­vi­ous sec­ond in com­mand left af­ter it be­came clear he wouldn’t ad­vance to the top job.

Los Angeles Times - - BUSINESS - By Tif­fany Hsu

For Ru­pert Mur­doch’s sec­ond in com­mand, it might as well be part of the job de­scrip­tion: a will­ing­ness to step aside for fam­ily suc­ces­sion plans.

With the me­dia mogul set to hand off con­trol of 21st Cen­tury Fox to his sons, James and Lach­lan, cur­rent Pres­i­dent and Chief Op­er­at­ing Of­fi­cer Chase Carey will exit both those roles and be­come a Mur­doch ad­vi­sor in­stead.

Carey isn’t the first top ex­ec­u­tive to be passed over by Mur­doch. In 2009, Peter Ch­ernin left his pres­i­dent and chief op­er­at­ing of­fi­cer po­si­tions at News Corp., hav­ing re­al­ized that he would even­tu­ally be re­placed by one of Mur­doch’s chil­dren.

Although that fam­ily as­cen­sion wouldn’t hap­pen for years — Carey left his chief ex­ec­u­tive role at DirecTV to take Ch­ernin’s role in the mean­time — it seemed clear that Ch­ernin would not ad­vance to the top job.

Now, with the ex­pected el­e­va­tion of Mur­doch’s sons, Carey might look to Ch­ernin’s ex­pe­ri­ence for guid­ance on his post-Mur­doch ca­reer — which seems to suit Ch­ernin just fine. Some ex­perts even say Ch­ernin’s de­par­ture fu­eled his ris­ing clout and in­flu­ence in the in­dus­try.

“He’s a very well-thought-of ex­ec­u­tive, and he’s re-cre­ated him­self in a re­ally won­der­ful way,” said Ja­son E. Squire, an as­so­ciate pro­fes­sor at the USC School of Cin­e­matic Arts. “He is a model for ex­ec­u­tive rein­ven­tion.” Ch­ernin, 64, de­clined to com­ment. Af­ter a 20-year ca­reer at News Corp. — dur­ing which he over­saw mas­sive box-of­fice suc­cesses such as “Ti­tanic” and “Avatar” for Fox Filmed

En­ter­tain­ment and ran the tele­vi­sion net­work — Ch­ernin left Mur­doch’s side as a popular man on Wall Street and in Hol­ly­wood.

His en­tre­pre­neur­ial am­bi­tions — to strike out on his own and in­de­pen­dently pro­duce films and tele­vi­sion through his new Santa Mon­ica com­pany, the Ch­ernin Group — at first left some peo­ple skep­ti­cal. Sev­eral top stu­dio ex­ec­u­tives had at­tempted the same and failed. In­dus­try watch­ers won­dered whether he might be bet­ter suited to a prom­i­nent role at a ma­jor com­pany such as Ap­ple Inc.

Ch­ernin, how­ever, left his for­mer em­ployer with a highly lu­cra­tive deal in place for Fox to fund a cer­tain num­ber of his movies and tele­vi­sion shows each year — an ar­range­ment that has laid the ground­work for his cur­rent suc­cess.

Since his com­pany launched in 2010, Ch­ernin’s fil­mog­ra­phy has in­cluded the fast-paced “Rise of the Planet of the Apes,” the odd­ball “St. Vin­cent” and the com­edy and cur­rent box-of­fice top­per “Spy.” Ch­ernin’s com­pany also pro­duced the popular tele­vi­sion show “New Girl.”

The com­pany has also ac­tively in­vested in tech­nol­ogy and me­dia com­pa­nies, grab­bing stakes in Pan­dora, Tum­blr and Flip­board, while ex­plor­ing part­ner­ships in Asia and other de­vel­op­ing mar­kets. Last spring, the Ch­ernin Group part­nered with AT&T to form Ot­ter Me­dia, a ven­ture de­signed to ac­quire, in­vest in and de­velop on­line video ser­vices such as YouTube video net­work Fullscreen Inc.

Carey may have a sim­i­lar con­tin­gency plan in place, but may be limited in his near-term op­tions by a tem­po­rary non-com­pete clause, ex­perts said. Like Ch­ernin, he is well-re­spected by the fi- nan­cial com­mu­nity, hav­ing es­tab­lished him­self at DirecTV, although he isn’t quite as ac­tive on the Hol­ly­wood scene as his pre­de­ces­sor was. But ex­perts said Carey was prob­a­bly aware of Mur­doch’s fa­mil­ial suc­ces­sion plans, hav­ing signed a short-term two-year con- tract last year.

“The wise ex­ec­u­tive at the high­est lev­els of the en­ter­tain­ment in­dus­try knows that their days are num­bered, that the odds are in­creas­ingly against you the longer you stay in a top stu­dio po­si­tion,” Squire said. “When ne­go­ti­at­ing, they spend a lot of time on the golden parachute and a sep­a­ra­tion clause.”

But for all his suc­cess, leav­ing Mur­doch meant that Ch­ernin has, for now at least, moved into “a vastly smaller pond than the one he was in be­fore,” said Doug Creutz, a me­dia an­a­lyst with Cowen & Co.

“Th­ese guys never want to give up their seat,” Creutz said. “When you’re run­ning a ma­jor me­dia com­pany, you’re im­por­tant; and when you step down, you’re no longer im­por­tant.”

That hasn’t been the case with Barry Diller, an­other for­mer Mur­doch ex­ec­u­tive turned IAC/In­ter­Ac­tiveCorp me­dia baron, who re­signed as chair­man of Fox Inc. in 1992 partly to es­cape from Mur­doch’s shadow.

“Diller’s ca­reer was dif­fer­ent — he al­ways had an en­tre­pre­neur­ial spirit, built quite the post-stu­dio ca­reer and still has it,” said Bill Me­chanic, a for­mer Fox ex­ec­u­tive and cur­rent head of Pan­de­mo­nium Films. “I don’t know that that’s hap­pened with Ch­ernin; I don’t know that he has that kind of sphere of in­flu­ence.”

‘The wise ex­ec­u­tive at the high­est lev­els of the en­ter­tain­ment in­dus­try knows that their days are num­bered, that the odds are in­creas­ingly against you the longer you stay in a top stu­dio po­si­tion.’ — Ja­son E. Squire, an as­so­ciate pro­fes­sor at the USC School of Cin­e­matic Arts

Craig Bar­ritt Getty Images for Fullscreen

PETER CH­ERNIN left Ru­pert Mur­doch’s side in 2009 af­ter a 20-year ca­reer at News Corp.

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