DirecTV CEO Chase Careyended the growing speculation about his future with the satellite giant last Wednesday, announcing that he would return to News Corp. in July as president and chief operating officer.
Carey will take the No. 2 seat next to News chairman and CEO Rupert Murdoch formerly occupied by long-time executive Peter Chernin. Chernin announced in February that he would leave the company on June 30.
Speculation that Carey would return to News Corp., the company where he started his television career in 1992, has been off and on ever since News Corp. swapped its controlling interest with Liberty Media in 2008. While at DirecTV, Carey oversaw a strong period of growth — the satellite giant added about 860,000 new customers in 2008 far outpacing expectations.
DirecTV said it would begin a search for a new CEO immediately. In the interim, executive vice president of legal, human resources and administration Larry Hunter, will serve as CEO.
“The past six years have been a phenomenal experience and I am extremely proud of the business we have built,” Carey said in a statement.
Speculation has been off and on ever since Liberty took control of DirecTV that Carey would rejoin News Corp. in some capacity. That speculation heated up after Chernin said he would leave the company in February.
Carey's star has been rising higher in the past several months as DirecTV has well outpaced its cable and satellite peers, reporting 460,000 net new subscriber additions in the first quarter, its best for customer growth in four years. The No. 1 satellite TV service provider added 301,000 subscribers in the fourth quarter of 2008 and also landed a distribution deal with AT&T (usurping rival Dish Network) in February.
Miller Tabak media analyst David Joyce said Carey would be a welcome addition to News Corp., adding that he has a long-standing relationship with Murdoch, knows the businesses and relieves the fears that Murdoch, who would have about 16 direct reports after Chernin leaves, would be a little stretched out.
“Chase has been one of my closest advisers and friends for years and I am delighted we'll once again be working together across our businesses as we face the challenges and great opportunities ahead,” Murdoch said in a statement.
Just who would permanently take over for Carey remains to be seen. Some analysts pointed to senior vice president of strategy and development Derek Chang and executive vice president of operations Mike Palkovic as possible candidates. There is also the possibility that a replacement could come from within the ranks of Liberty Media, which has a reputation for keeping a stable of capable executives to fill in during similar situations.
Carey will be based in New York and will have oversight of News Corp.'s global operations. It is expected that while he will be Murdoch's trusted No. 2, he won't wield as much power as Chernin did during his tenure. Shortly after Chernin announced his intention to leave, News Corp. initiated a management restructuring that gave control of the studios to Fox Entetrainment co-chairmen Jim Gianopulos and Tom Rothman, and oversight of the cable and broadcast channels to Fox Networks chairman Tony Vinciquerra.
Those executives will likely report to Carey, but it is expected the new COO will be less hands-on with the entertainment business than his predecessor.