Peter Chernin, president and chief operating officer of News Corp., will step down when his contract expires June 30. The vacancy likely clears the eventual path to succession for Chief Executive Rupert Murdoch’s 36-year-old son James.
LOS ANGELES (AP)– Peter Chernin, president and chief operating officer of News Corp., will step down when his contract expires June 30, the company said Monday.
The vacancy likely clears the eventual path to succession for Chief Executive Rupert Murdoch’s son James, the 36-year-old executive in charge of News Corp.’s businesses in Europe and Asia. The elder Murdoch, 77, controls more than a third of the media conglomerate’s shares and that control will be passed on to his four eldest children in a family trust in time.
But the departure comes at an awkward time for News Corp., which has seen its stock price fall 68 percent, or more than $13, over the past 12 months to close Monday at $6.39, as a slump in advertising spending pressures its newspapers and television networks. It also booked a $6.4 billion loss in its most recent quarter because of a massive write-down in the value of its assets.
The company said in a statement Monday that its 20th Century Fox movie studio and Fox broadcast and network business will report directly to Murdoch upon Chernin’s departure.
Chernin, 57, said next week marks his 20th anniversary with the company, adding in a statement “this was a difficult decision for me,” and calling Murdoch a “visionary.”
Murdoch, in turn, called Chernin’s contributions “immeasurable.”
But to some observers, Chernin’s ambition to ascend to the top job got in the way of Murdoch’s desire to have a family member take control, even if it meant the loss of a trusted lieutenant.
“I think Rupert decided he was going to bite that bullet because he didn’t want Peter standing in the way of his children,” said Michael Wolff, a Vanity Fair columnist and author of “The Man Who Owns The News: Inside the Secret World of Rupert Murdoch,” which was published in December.
The resignation could also resolve a simmering tension between the two over the $5 billion price tag that News Corp. agreed to pay to take over The Wall Street Journal publisher Dow Jones & Co. in December 2007, Wolff said.
In the December quarter, the Dow Jones division turned a $59 million profit after cost cutting measures, swinging into the black from a $4 million operating loss in the quarter ended in September. Analysts have suggested the price paid for the company was far too high.
“He was really not happy with Peter for opposing the Dow Jones deal,” Wolff said. Murdoch also did not want Chernin to block a potential deal to take over The New York Times Co., he added.
It was unclear if the timing of the announcement was intentional, coming just after News Corp.’s boutique movie label, Fox Searchlight, was on the receiving end of eight Oscar awards Sunday night for “Slumdog Millionaire.” It also garnered two acting nominations for “The Wrestler,” which didn’t win.
The story was first reported by the Los Angeles Times Web site on Monday around noon.
On Sunday night, Chernin had seemed in an upbeat mood, and he attended a party at a club on Sunset Boulevard in West Hollywood for both movies, joined by the entire “Slumdog” cast and crew, “Wrestler” nominee Marisa Tomei, Danny Glover, Serena Williams and other celebrities.
“Good night for us, huh?” Chernin told a reporter, but declined to answer a question.
Chernin will launch a Fox-based production company later this year, among other ventures, the company said. In addition, he will continue his efforts as chairman of Malaria No More.