News Brief: Chernin Opts Out of Mouse House Race

Published February 4, 2005

By C. W. Oberleitner

Online entertainment industry news site, ShowBizData.com reports that News Corporation President and COO, Peter Chernin appears to be removing himself from the list of potential replacements for Mouse House CEO Michael Eisner.

The News from Disney

Meeting earlier this week in Orlando, Florida, with Wall Street analysts and investors, executives of the Walt Disney Company delivered a very upbeat assessment of the company's most recent financial performance. The Mouse earned $723 million dollars in the first fiscal quarter of the year, which ended December 31. Disney's fiscal year begins on the first of October.

Unlike the upcoming annual Disney Company shareholders' meeting, which will take place next week in Minneapolis, Minnesota, the Disney company played host to their Wall Street guests at the Disney owned Yacht & Beach Club at the Walt Disney World resort. In addition to the company's improved financial performance, the subject of the search for a replacement for Disney CEO Michael Eisner was also discussed.

Disney Chairman George Mitchell flatly refuted the notion that the board had already decided on sole internal candidate Disney President Bob Iger, and that the search for Eisner's replacement was a "done deal." In a public statement Mitchell said,

We approach this decision in good faith with open minds. There has been no prior determination. There are no preconditions.

The News from News Corp

The Walt Disney Company wasn't the only one with good news for Wall Street. On February 2, News Corp reported second quarter operating income of $954 million, a 24% improvement over the same period the year before.

In a conference call with investors and analysts, News Corp President Peter Chernin reported that net profits grew to $386 million. This was due mostly to the strong showing by the company's 20^th Century Fox studio division and related home video sales.

During the conference call, Chernin, who is considered by many analysts to be one of the most qualified candidates to take over at Disney, was asked about his future plans. Chernin's response was,

Look, I'm very happy here. ... I continue to believe that this is the strongest media company with the strongest growth. I just signed a new contract, and this is where I intend to keep working.

Having made these remarks, it would appear that Chernin is taking himself out of consideration for the Disney job. Analysts were quick to note, however, that former Viacom President Mel Karmazin made similar statements about being satisfied with his job and new contract just weeks before turning in his resignation.

Other industry observers were also quick to point out that there was little else that Chernin could have said. "It wasn't fair to Chernin," said one analyst. "Disney hasn't even begun the interview process. You don't tell Wall Street in the middle of a conference call you're considering jumping ship. It would have been completely irresponsible for him to say he was going after the Disney job and probably would have been the surest way I know for somebody to show they're not right for the job."

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News Corp President and Chief Operating Officer, Peter Chernin tells analysts he's happy where he is.