Chernin’s Comcast role prompts speculation

Peter Chernin, who stepped down as president of media conglomerate News Corp. this summer, is back in the spotlight. That didn’t take long.

The veteran television and movie studio chief has been a key, behind-the-scenes advisor on cable TV giant Comcast Corp.’s negotiations to take control of NBC Universal. The revelation this week of Chernin’s involvement has prompted speculation that the executive could emerge as a powerful player at NBC Universal if Philadelphia-based Comcast succeeds with its bid.

Chernin’s new role is intriguing because of his well-known desire to head his own enterprise -- one where he’s firmly in charge, no longer the odd man out of a family dynasty or beholden to a headstrong mogul.

The situation also is complicated by Chernin’s ongoing relationship with his old boss, Rupert Murdoch. Chernin has spent the last few months forming his own movie and television production studio -- a venture financed by Murdoch’s News Corp.

People close to the situation said Chernin’s work for Comcast had been casual, amounting to little more than a few days of work assisting in valuations of NBC Universal assets, all businesses that he knows well from two decades as a top entertainment executive.

But at the same time, the job thrusts Chernin into the center of a deal in which his expertise could help shape how Comcast manages NBC Universal and re-engineers its operations in a rapidly shifting digital landscape.

Chernin now stands in the unusual, if not awkward, position of helping to create a stronger competitor to his former longtime employer, to whom he still has financial ties. “It is always a question of can you serve two masters?” said corporate governance expert Charles Elson at the University of Delaware. The issue will be, Elson said, “What do the folks at Fox think about this?”

News Corp. declined to comment.

Chernin has latitude to freelance because he no longer is an officer at News Corp. and is exempt from a fiduciary duty to shareholders. However, because of Chernin’s production deal at News Corp.’s 20th Century Fox unit, the situation could become thorny. His six-year contract requires Fox to pay his firm’s overhead and greenlight at least two movies a year. Fox also has first crack at any TV shows he produces.

Chernin also continues to enjoy an office on the Fox lot and the use of a driver and the News Corp. jet.

However, Chernin’s work for Comcast does not violate the terms of his contract. His Fox production deal runs until 2015 unless he terminates it or “becomes a full-time employee of an entity that derives more than 10% of its revenue from film or television production,” according to regulatory filings. Chernin is not working full time for Comcast, which derives only a fraction of its revenue from TV production.

Executives at Fox are curious about Chernin’s new role and wonder whether the Comcast consulting might be part of a grander strategy. Several said they could envision Chernin being asked to serve in some uber-capacity at NBC Universal, or perhaps buying some of NBC Universal’s assets if Comcast decided to sell them. More than a year ago, Chernin explored putting together his own firm to invest in media ventures. But then the financial markets collapsed, and he instead decided to trigger the Fox producing deal.

Other observers said they wondered how long Chernin, who relishes the action on a big stage, would be content to be a mere movie and TV producer. They noted that he had already begun to assemble his own team, led by two former NBC Universal executives -- movie executive Dylan Clark, a veteran of Universal Pictures, and Katherine Pope, former president of NBC’s television production arm.

“He’s a free agent and free to try to invent the future of the media business,” said Martin Kaplan, director of the USC Annenberg Norman Lear Center. “The era of lifelong loyalty is long gone. People don’t have careers, they have jobs, and their loyalty is to their own goals, which can be fulfilled in different settings.”

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