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After Chernin, Who's Up At News?

2/27/2009 7:13 PM Eastern

With News Corp. chief operating officer Peter Chernin finally letting the cat out of the bag last week that he will leave the media giant after his contract expires June 30, the new game in Hollywood is guessing who his successor will be.

For the time being, the answer is simple: nobody. But according to at least some analysts, the smart money is that chairman and CEO Rupert Murdoch's son James, a rising star in his own right, will become the company's next No. 2.

Chernin said last week that he will step down as COO — “a difficult decision,” he said in a statement — after his contract expires on June 30. News Corp. said in announcing the move that no replacement will be named and that Chernin's reports will now answer directly to Rupert Murdoch. The company said that other News executives will share the burden in Chernin's absence.

According to several analysts, that could mean that longtime cable executives like Fox Networks Group chairman Tony Vinciquerra and Fox News Channel honcho Roger Ailes could see their roles expand. But many believe that the sheer number of additional executives that will report to Rupert Murdoch — 16, by one estimate — will force the chairman to name a new COO sooner rather than later.

And that is likely to be James Murdoch.

James Murdoch's standing has steadily risen over the years, starting with his stewardship at the tender age of 30 of its U.K. satellite TV juggernaut British Sky Broadcasting. James Murdoch guided the satcaster through some of its biggest growth periods — and weathered some controversy, particularly its dispute with Virgin Media over programming — before being named chairman and CEO of News Corp.'s European and Asian operations in 2007.

“James will be named sooner rather than later,” said Miller Tabak media analyst David Joyce.

In a research report, Pali research analyst Richard Greenfield estimated that Rupert Murdoch would have 16 additional reports once Chernin leaves. That, he wrote, is a tough row even for a well-known hands-on chairman like Murdoch.

“While we believe Rupert Murdoch is intimately engaged in all facets of News Corp.'s businesses, taking on the added responsibilities of Mr. Chernin will be challenging,” Greenfield wrote. “Even if Murdoch is able to consolidate/streamline the aforementioned reporting structure, we believe the company will need a second-in-command over the course of the next year.”

And Greenfield added that there is but one obvious choice for that role.

“While James Murdoch is currently responsible for News Corp.'s European and Asian assets, we would expect his role to expand significantly over time, particularly as the demands on Rupert Murdoch's time grow post-Chernin,” Greenfield wrote.

September