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Chase Carey returns to News Corp.

Rupert Murdoch lures his trusted advisor away from DirecTV to replace Peter Chernin in the No. 2 position.

June 04, 2009|Dawn C. Chmielewski and Meg James

News Corp. Chairman Rupert Murdoch reached out to tap new leadership for his global media empire -- by bringing back one of his most trusted former executives.

With Chase Carey set to assume the No. 2 job at News Corp., Murdoch on Wednesday acted swiftly to calm investor fears about a management void at the top of the company with the departure of President and Chief Operating Officer Peter Chernin. Carey will assume the titles of deputy chairman, president and chief operating officer July 1, the day after Chernin steps down.

At the same time, Carey's appointment leaves a leadership gap at DirecTV, the El Segundo-based satellite broadcaster that he has run since 2003. Carey demonstrated operational acumen as chief executive of DirecTV, where he is credited with expanding the reach and improving the profitability of the satellite broadcaster.

In rejoining News Corp., the 55-year-old executive will enjoy a rapport with Murdoch and draw on a deep knowledge of News Corp., where he held a variety of senior positions.

"Chase has been an important advisor and a close friend to me for several decades," Murdoch said Wednesday in an e-mail to employees. "I know that his leadership, strategic capabilities and more than 15 years of experience at our company will prove invaluable as we face the challenges and opportunities before us."

DirecTV announced Wednesday that it had accepted Carey's resignation, even though he is under contract through December 2010.

The board installed Larry D. Hunter, the company's general counsel since 2002, as its interim head until a successor is named.

The satellite broadcaster was rocked earlier in the week when it was leaked that the company's chief executive was in negotiations to leave to become Murdoch's top lieutenant.

During Carey's tenure, DirecTV's subscriber base grew to 18 million from 12 million in the United States. The company went from a break-even business to one that generated free cash flow of $1.7 billion last year. Earlier this year, it renegotiated its NFL rights deal. Carey also quarterbacked the company's successful strategy to promote high-definition channels, which gave it an edge against its competitors because it offered more HD channels.

"The board wishes Chase the very best in his new position," said John Malone, chairman of DirecTV Group. "While we will certainly miss Chase, we are confident in DirecTV's future with a seasoned executive team in place."

Murdoch has moved swiftly to restructure News Corp.'s Los Angeles-based entertainment operations in the wake of Chernin's announced departure.

He gave broader responsibilities to senior film and television executives and brought in Internet veteran Jon Miller to find new approaches for the company's digital businesses, including the MySpace social network.

These division heads were to report directly to Murdoch, who initially said he would not fill Chernin's position.

Behind the scenes, Murdoch worked for months to lure Carey back to News Corp. and ease some of the pressure of running the day-to-day operations of a sprawling conglomerate, which includes a film studio, television stations and the Fox broadcast network and newspapers on three continents. The job had eluded Carey during an earlier stint at News Corp., when he lost out to Chernin.

"The company was prepared to go ahead with nobody in that position, all direct reports," said Stanley S. Shuman, managing director of Allen & Co. and a director emeritus of News Corp. "There are a group of talented executives, and they understand their operations extremely well. Chase makes it much easier to accommodate everybody's time concerns and travel concerns. He brings a lot of intellectual capacity to the job."

Carey's success in building DirecTV's subscription business, logging gains in the middle of a recession, may prove especially valuable for News Corp., which has been seeking new pay models for its digital media holdings.

From 1996 to 2002, Carey was one of Murdoch's closest advisors, serving as co-chief operating officer of News Corp.

Among the key initiatives he led were the launch and growth of Fox Sports, the expansion of the Fox Television Stations group and the addition of cable channels, such as the National Geographic Channel. He also built satellite operations in Europe, Asia and Latin America.

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dawn.chmielewski @latimes.com

meg.james@latimes.com

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