News

News Takes Turn to Stern

11/23/2003 7:00 PM Eastern

With Federal Communications Commission approval of its acquisition of a controlling interest in DirecTV Inc. parent Hughes Electronics Corp. about 30 days away, News Corp. is making moves to reshape management at the No. 1 direct-broadcast satellite service provider.

Sources confirmed reports from Los Angeles Times and The Wall Street Journal on Nov. 20 that News Corp. will likely name Fox Television Stations Inc. chairman and CEO Mitchell Stern to run DirecTV. Stern would replace current DirecTV president Roxanne Austin.

Making A Name

Stern is a rising star at Fox, as he transformed the station group into one of the leading profit centers at News Corp. While sources familiar with the situation said nothing is carved in stone yet, Stern is News Corp. chairman Rupert Murdoch's top choice for the job.

DirecTV and News Corp. declined to comment.

Stern would report to Chase Carey, a former News Corp. executive who was tapped to head up Hughes when News Corp. first announced the $6.6 billion deal earlier this year. Current Hughes corporate senior executive vice president and DirecTV chairman and CEO Eddy Hartenstein, who would become vice chairman of Hughes after the News Corp. deal is closed, would remain in that position, sources said.

Speculation has been rampant about management changes at DirecTV ever since News Corp. announced the acquisition in April. Other candidates that have been rumored for the job include former British Sky Broadcasting Group plc CEO Tony Ball (who announced his resignation in September) and Murdoch's son James, who took Ball's place at BSkyB.

"He [Stern] has done such an amazing job at the station group — it's the best-run station group in America and has the essential components of sales, it's nationwide, it's sort of a microcosm," said one source familiar with the situation.

"It's a multibillion-dollar business that he's run and run very successfully. There are some differences, but it's TV, it's not rocket science."

Stern joined News Corp. in 1986 as chief financial officer of the station group and from 1990 to 1992 ran KTTV (Channel 11) in Los Angeles. He was named chief operating officer of the station group in 1992, rose to president and chief operating officer in 1993 and was elevated to chairman and CEO in 1998.

While Stern is a relative unknown in the satellite industry, he has a strong reputation in the broadcast arena.

Although some reports said he has a sometimes-caustic management style, that may prove to be a plus in the rough-and-tumble satellite business.

"When Tony Ball went to BSkyB, nobody had ever heard of him either," said the source familiar with the situation. "Mitch is a lot more senior than Tony was when he took that job."

While reports have said that Murdoch's other son, Lachlan, would take over for Stern, he already is Stern's boss and has oversight of the station group in his current title as News Corp. deputy chief operating officer. However, sources said that with Stern gone, Lachlan Murdoch would likely take a more active day-to-day role at the station group.

Austin, who took over as DirecTV's president in 2001, has been credited with dramatically improving results at the DBS powerhouse. In the third quarter, DirecTV reported 326,000 net new subscriber additions, the first quarter it outperformed DBS rival EchoStar Communications Corp.

Want to read more stories like this?
Get our Free Newsletter Here!