Gemstar Turns to Fox's Shell

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Gemstar-TV Guide International Inc. has recruited Fox Cable Networks Group CEO Jeff Shell as its new chief operating officer in a move designed to turn around the beleaguered company's credibility and improve its relations with cable operators.

Shell's move to Gemstar also helps News Corp. protect its 43 percent stake in the interactive-program-guide vendor.

Shell said last week that News Corp. chairman Rupert Murdoch and president Peter Chernin asked him to consider taking the job, and that he started talking to Gemstar CEO Henry Yuen about the post four months ago.

"I wouldn't do it if I didn't have a pretty good rapport with Henry and his wholehearted approval coming in," Shell said.

The leadership change comes a month after Gemstar co-president Peter Boylan abruptly resigned.

Since then, Gemstar's stock has lost more than half of its value, hit by a delay in the initial determination in its International Trade Commission suit against EchoStar Communications Corp., Scientific-Atlanta Inc. and Pioneer Corp., as well as by Wall Street concerns about its accounting methods.

Though Boylan managed to strike long-term IPG deals with most of the industry, the challenge of cutting deals with Time Warner Cable, Cox Communications Inc. and Cablevision Systems Corp. falls to Shell.

Gemstar is known in cable as a tough negotiator that has used its strong patent portfolio in the IPG space as leverage in talks with MSOs. And it's also sued several companies for alleged patent violations.

That's an image Shell wants to soften.

"The approach has been kind of, 'Here, you're taking it,' as opposed to, 'Let's sit down and work through all the ways we can make money together using this vehicle,' " Shell said.

In addition to looking to close deals with the MSOs Gemstar hasn't signed yet, Shell said he would work with TV Guide Interactive affiliates like Comcast Corp. and Charter Communications Inc. on growing the IPG business, which has struggled for advertising revenue.

"It's one thing to have a deal with somebody like Charter that gives them a certain revenue split, and us a certain revenue split. If there's no revenue, it doesn't matter," Shell said.

Shell has extensive financial and operations experience. As CEO of Fox Cable Networks Group since April 2000, he oversaw such networks as FX; Fox Sports Net and its 21 owned or affiliated regional sports networks; Fox Movie Channel; Fox Sports World and Fox Sports World Español; National Geographic Channel; and Speed Channel. He also served on News Corp.'s executive committee.

He started at Fox Television in 1994 as head of new business development. In 1995, he helped broker Fox's partnership withLiberty Media and joined Fox/Liberty Networks as chief financial officer. In 1999, he moved up to the job of president of Fox Sports Networks.

Earlier in his career, he worked in strategic planning at The Walt Disney Co. and at Salomon Brothers Inc.

His direct reports at Fox Cable will answer to News Corp. president Peter Chernin until Shell's successor is found, Shell said.

"What Peter has told me as I was leaving was that I don't think they're going to do anything in a hurry. I think they'll really kind of sit back and look over all the options," Shell added.

FX Networks president and CEO Peter Liguori is seen as a possible successor.

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