Chernin’s Exit Leaves Rupe Lonely At The Top


News Corp. chairman Rupert Murdoch thinks he can run his media giant without departing COO Peter Chernin, who’s put himself out to pasture in the no-man’s land of movie production.

We’ll see. Meantime, Rupe must defend the troubled corners of his empire without the right hand man who handled Hollywood for him. Here are the biggest challenges he’s facing.

Fixing News Corp.’s movie business. News Corp.’s filmed-entertainment profits fell 72% last quarter. Much of the drop had to do with dying DVD sales. People still buy big hit DVDs, but Fox’s catalogue isn’t worth nearly what it used to be. Why should it be when there’s Netflix?

Saving his newspapers. News Corp. just took a $3 billion write down on its newspaper business, basically admitting it grossly overpaid for the Wall Street Journal. On the bright side, the Journal’s circulation is up. Unfortunately, that may be only due to heavy subscription discounting. During the six months before Sept. 30, 2008, the Journal sold 501,000 copies at half price. During the same six months in 2006, that number was 214,000. News Corp.’s other American paper, the New York Post, sees annual losses in the $60 million range.

Finding a successor. Murdoch’s kids are either still too young (James) or uninterested (Lachlan) in running the business. MySpace CEO Chris DeWolfe isn’t taken seriously. That leaves Fox News boss Roger Ailes as News Corp’s only proven executive — and he’s busy trying to run Fox News in the age of Obama and turn Fox Business into something relevant.

Surving online without Google. MySpace is doing well positioning itself for advertisers as an alternative to AOL or Yahoo. But most of its online revenues still come from a $900 million search deal the company signed with Google in 2006. Bad news is, Google wants out of that deal as soon as possible. Possible solution: Swap MySpace for Yahoo stock.