Well, Rupert has guts. With the share price of News Corp. at its lowest level in years, Rupert Murdoch has allowed Peter Chernin, the company’s No. 2, the manager of its entertainment divisions, which are the company’s biggest revenue streams, and a Wall Street favorite, to walk away.
I wrote the other day that Chernin would probably stay on, that Murdoch, cowed like everyone else by the financial crisis and an unforgiving market, would give his most important executive what he wanted. I was wrong, as so many people have been, for doubting the old man.
The contract issue was straightforward: Chernin wanted Murdoch’s word that if Murdoch departed (carried out or otherwise), Chernin would get his job. That’s the deal they struck four years ago when Chernin’s contract was renewed.
But now Murdoch, at 78, wants to know that if he goes, one of his children—likely his son James—will take over.
So it’s an actuarial issue.
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But it’s also a philosophical issue. It’s about newspapers. Indeed, there's a special irony in the Times writing about the negative impact Rupert’s love of newspapers has on the share price of his company, since it's the Times itself that Rupert wants most.
This is precisely what Chernin, as a responsible executive, would have stoutly opposed. He was sour about Murdoch buying the Wall Street Journal—which put his own stock options way under water. He would have been an absolute refusnik when it came to a New York Times deal.
Chernin is a modern media guy—a manager of entertainment-related assets. Murdoch is an old-fashioned one—for him it’s all about news.
I sat with Murdoch for the better part of last year listening to him return again and again to two themes. The overriding one was about newspapers; his second impish theme was about the insubstantiality of Peter Chernin. Not that he is insubstantial as a manager, or executive, or political player, but that he’s a guy without meaning—without a sense of historic mission (Murdoch pointed out more than once that Chernin did not even read newspapers). One afternoon last winter, in Murdoch’s office, his communications aide, Gary Ginsberg, a Chernin loyalist, was positing that if Hillary won the nomination then Chernin, one of her largest fundraisers, might have a shot at Treasury or even State. “At best,” said Murdoch, with memorable disdain, “Commerce.”
Part of the portrait I tried to paint of Murdoch was of a man who, although he runs one of the world’s largest and most influential corporations, is decidedly uncorporate. He rides alone.
Here he is again, someone so often accused of financial expediency, making just about the most counterintuitive, even dopey, move you could make. He’s getting rid of the technocrat guy who makes him a ton of dough in the modern, homogenized entertainment business, in favor of bringing his children into an old-fashioned newspaper company.
Maybe Murdoch has soul.
And, come to think of it, maybe Chernin should be commerce secretary.
More of Newser founder Michael Wolff's articles and commentary can be found at VanityFair.com, where he writes a regular column. He can be emailed at michael@newser.com
