Discovery CEO Is Leaving

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Discovery Communications Inc. is losing a veteran executive with the impending exit of president and CEO Judith McHale, who’s leaving Dec. 1 to work on social and philanthropic issues.

Her departure was announced last week. Discovery founder and chairman John Hendricks will chair a search committee to find her replacement.

The names of several potential successors have already surfaced, including Mark Hollinger, general counsel, and Billy Campbell, president of Discovery Networks U.S.

McHale will continue to advise Hendricks on Discovery’s education initiatives and serve as chairman of the Discovery Channel Global Education Partnership, which brings together both public and private groups to support technology and education projects.

“Today, as a global society, we face enormous social and political challenges,” McHale said in a statement. “Now I want to become more directly involved in working with others to find solutions.”

She leaves with Discovery’s programming services on an upswing, after several years of ratings declines. In the second quarter, Discovery Channel was up 13% in primetime, to a 0.9 rating, while TLC saw a gain of 17%, to a 0.7, according to a Disney ABC Cable Networks analysis of Nielsen Media Research data.

“She’s done well,” said Robert Routh, an analyst at Jefferies & Co. “She’s made her money. She’s always wanted to do philanthropic and social kinds of things. She was able to ankle the company on a high note.”

But Discovery faces a challenging ad-sales environment during this upfront market, which is proving difficult for cable networks overall.

Routh believes McHale was uncomfortable with Discovery’s relatively new ownership structure, a result of Liberty Media Corp. spinning off its 50% stake into a separately traded public company called Discovery Holding Co. a year ago. Discovery’s other two owners are Cox Communications Inc. and Advance/Newhouse Communications, each with 25%.

When Discovery was strictly private, a ratings drop at the networks wouldn’t engender much scrutiny, according to Routh. “But when [Liberty’s stake] suddenly became public and all this was reflected in the DHC [Discovery Holding Co.] stock price … I think she realized that really wasn’t an environment she wanted to be in.”

Routh also pointed out Discovery is run by shareholders, not a board. So decisions, like choosing a new CEO, must be approved by at least 80% of the holders of outstanding capital stock. Essentially, that means all three partners must agree.

McHale joined Discovery in 1987, holding various positions until her promotion to her current titles in 2004.

Mike Farrell contributed to this story.

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