Sumner Redstone, who is the de facto head of Viacom (NYSE: VIA) and CBS (NYSE: CBS), was supposed to be the media baron who could not keep his top management. Now Rupert Murdoch, CEO of News Corp (NYSE: NWS), has joined the club. The president of his company, Peter Chernin, is leaving.
Murdoch may be gambling that he can keep his job for life and hand it to one of his children. Since he is 77 and none of his children may be qualified, that could be a bad gamble. At least Chernin could have kept the CEO's seat warm while one of Murdoch's offspring got some more on-the-job training.
The press has made the Chernin departure into a story about the earnings trouble at News Corp. In reality, its problems are not much worse than they are at most other big media companies. News Corp is burdened more than some of its peers because of its newspaper holdings. But, odds are that News Corp will make it out of the recession intact and in a position to take advantage of the eventual improvement in the ad markets.
The other story about Chernin leaving is that there is no guarantee that when Murdoch leaves there will be an orderly succession. Murdoch has two sets of children. The oldest are in their 30s. But there could be a battle among them as to who gets that top spot -- this could do as much damage to the company as the economy.
Chernin was a potential insurance policy that someone would be ready to step in when Murdoch leaves. That policy is on his way out the door.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
2-24-2009 @ 10:48AM
Beltway Greg said...
And his parachute is beyond golden, that sucker is platinum and for that reason alone he deserves to be retained. Obviously, Sir Rupert never expected Chernin to depart for elysian fields of tomorrow. Way to go dude, besides his limo driver, you're the only other person taking the old man for a ride. Note to Rupert: Don't let ego get the best of you.