Worries Grow That News Corp.'s Chernin Will Bolt

The contract for Rupert Murdoch's chief lieutenant, News Corp. President Peter Chernin, expires June 30, and the two executives have been locked in negotiations for months. They haven't struck a deal, and concern is mounting inside the company, and on Wall Street, that Chernin will not renew.

Some Fox executives worry that Chernin, who has been key to the company's smooth operations, might leave News Corp. at a difficult time. For his part, Chernin has been tight-lipped about his plans. Some analysts are alarmed by the domino effect in management his departure could trigger. "We fear the longer time goes by, the less likely Chernin is to renew his contract," says Pali Research analyst Richard Greenfield. "His departure would raise significant investor concern and could lead to other management changes at News Corp."

During a recent conference call with analysts to discuss earnings, Chernin played a less prominent role than he had in the past. Murdoch dominated the call, fielding questions about the entertainment properties that have long been Chernin's specialty. Chernin has been known to take negotiations down to the wire. His last contract renewal, in July 2004, was announced three days before the agreement took effect.

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