Last August, as News Corporation scrambled to contain a phone-hacking scandal at its British newspaper unit, Chase Carey, the company’s president and chief operating officer, proposed an idea to his boss, Rupert Murdoch: buy back $5 billion worth of stock.
Brendan Smialowski | Getty Images
Chase Carey, Deputy Chairman and Chief Operating Officer of News Corporation.
Mr. Murdoch was skeptical, saying he would rather focus on getting through the crisis than on the stock price, according to people familiar with Mr. Murdoch’s thinking who would not publicly discuss private conversations.
Mr. Carey persisted. As of this month, News Corporation had repurchased $2.5 billion of Class A shares and had largely kept investors happy, despite the continuing scandal in Britain. In the first week of trading in 2012, News Corporation shares rose to a 52-week record, or 30 percent above the lows it hit in the weeks after public outcry over the hacking scandal began in July and higher than it had been before.
The crisis in London has left Mr. Murdoch stretched thin and increasingly reliant on his No. 2, Mr. Carey, 58, who was once considered to be serving as a placeholder until one of the Murdoch children took over. Never in the $60 billion media company’s history has an executive other than Mr. Murdoch taken such a major role in running the daily operations.
“Chase is one of those people with no fear,” said Michael Ovitz, co-founder of the Creative Artists Agency. “He’ll say, ‘This is what’s good for you. And this is what’s bad for you.’ That’s hard to do when you’re dealing with a founder and patriarch.”
Mr. Carey, who wears blazers with elbow patches and a Wyatt Earp-style handlebar mustache, leads earnings calls, speaks at investor conferences and strategizes on everything, including retransmission fees with cable and satellite companies. Unlike Mr. Murdoch and his son James, who continue to face scrutiny related to phone hacking and the accusation that nepotism sometimes overrides shareholder interests, Mr. Carey’s outsider status makes him a steady and less polarizing figure, analysts said.
“He’s increasingly becoming the face of the company,” said Richard Greenfield, a media analyst at BTIG.
In August, Mr. Murdoch, 80, told analysts that Mr. Carey would take over as chief executive in an emergency. “Chase is my partner, and if anything happened to me, I’m sure he’ll get it immediately,” he said.
The question of succession at News Corporationis a delicate one. Most senior executives declined to comment on the record about Mr. Carey, expressing concern that any positive observations might appear as a slight to James Murdoch. Mr. Carey declined to comment.
Interviews with more than a dozen current and former associates reveal that Mr. Carey is in many ways Mr. Murdoch’s alter ego. He is aloof while Mr. Murdoch is engaged with the public (most recently on Twitter, where Mr. Murdoch has criticized opponents of antipiracy legislation); he is all-American while Mr. Murdoch is worldly (Mr. Carey once dragged a colleague to a sports bar while on business in Hong Kong); and he is apolitical while Mr. Murdoch is conservative.
“Every visionary has 40 bad ideas and three good ones, and you need those checks and balances,” said Greg Nathanson, the former president of the Fox Television Stations. “Murdoch’s visions were amazing, but he couldn’t execute them without a person like Chase.”
Mr. Carey, a New York native, college rugby player and die-hard Yankees and Giants fan, first joined News Corporation in 1988 after working in the home entertainment and finance divisions of Columbia Pictures. His mustache hides a scar from an injury from a car accident on the way to a football game at Colgate University, where he was active in the Delta Upsilon fraternity. The driver died, and Mr. Carey went through the windshield.
As the fledgling Fox network’s chief operating officer, Mr. Carey quickly became Mr. Murdoch’s preferred negotiator.
In 1993, Mr. Murdoch bet Mr. Carey $20 that the network known for “The Simpsons” and “Beverly Hills, 90210” could not capture the National Football League’s primary television rightsfrom venerable CBS. The league had twice rejected Fox’s offers, and CBS had been known for football for 38 years.
Mr. Carey put together a $1.56 billion deal that beat out CBS and put Fox on the map. Mr. Murdoch paid up on his $20 bet.
“That was a game changer for the next two decades,” said Paul Tagliabue, who served as the N.F.L. commissioner during the negotiation. Of Mr. Carey’s negotiating tactics, Mr. Tagliabue said: “He didn’t shout. There were no histrionics. He was almost deceptively calm.”
From 1996 to 2002, he served as co-chief operating officer with Peter Chernin, a showman heavily involved in the company’s creative units. Mr. Carey has little interest in the glamorous Hollywood business. In 2002, Mr. Carey unexpectedly resigned, saying he did not see a role for himself in the company after its failed bid to take over DirecTV. The following year, Mr. Murdoch succeeded in a $6.6 billion deal for DirecTV, and Mr. Carey returned to lead the satellite-television broadcaster, which now is no longer part of News Corporation.
In the years he was based in Los Angeles, Mr. Carey lived in Manhattan Beach and frequented the San Francisco Saloon, a bar known for its buffalo wings and sawdust-covered floors. Under his leadership, DirecTV expanded its United States subscriber base to more than 18 million, from 12 million.
“It was pretty cut and dry with Chase,” said Derek Chang, executive vice president for content strategy and development at DirecTV, where Mr. Carey served as president and chief executive from 2003 to 2009. Mr. Chang added: “He didn’t micromanage. You got in, you did your job, or you didn’t have a job.”
Mr. Murdoch lured Mr. Carey back to News Corporation in 2009. Last fiscal year, Mr. Carey earned $30.2 million, a 16 percent increase from the previous year, making him the company’s second-highest-paid executive after Mr. Murdoch, whose compensation totaled $33.3 million.
In a company known for its outsize personalities, Mr. Carey has no interest in the spotlight. (He seldom interferes with the Fox News chairman, Roger Ailes, according to people familiar with the company.) He regularly orders a hamburger and fries during power lunches in News Corporation’s third-floor executive dining room and rides a packed commuter train home to the Connecticut suburbs, often popping a can of Budweiser on the way, despite having “the highest car allowance available to a senior executive,” according to a 2009 filing with the Securities and Exchange Commission.
Colleagues describe him as all-business with little interest in making small talk, unless it is sports related. Several longtime associates said they knew about Mr. Carey’s wife and his son and daughter only because of an annual Christmas card.
“We talked about the Murdoch kids more than we talked about our own kids,” said one former News Corporation executive who worked closely with Mr. Carey.
Mr. Carey, like the Murdoch children, does not share his boss’s affection for the newspaper business, according to colleagues. He would rather the company, which owns The Wall Street Journal, The New York Post and other papers, home in on more lucrative and less distracting pursuits. “He hates politics. He thinksNews Corp. should be a sports and entertainment business,” said one executive from Britain not authorized to discuss Mr. Carey on the record.
Mr. Carey is now using his negotiating tactics to again alter the economics of television. He has pressured satellite and cable providers to pay higher retransmission fees, which have become among the largest drivers of growth at News Corporation and some other media companies.
“This whole retransmission battle is a big, big, big deal, and he’s the most pivotal figure in it,” said Staley Cates, president and chief investment officer of the Memphis-based Southeastern Asset Management, which holds roughly 52.5 million nonvoting shares in News Corporation.
But some media bankers said Mr. Carey was picking the low-hanging fruit. They would like him to put more effort into developing new businesses in addition to exploiting existing ones. A little talked-about result of the phone-hacking scandal, they said, is that the younger visionary figures in the company, namely James and his sister Elisabeth Murdoch, have been at least temporarily marginalized.
“He doesn’t have a huge ego that has to dominate every minute of every day,” said Mitchell Stern, former chairman and chief executive of Fox Television Stations and Twentieth Television. “Where he was lacking, which I think he’d admit, would be in the creative content.”
In March, the company said James Murdoch would move to New York from London and become deputy chief operating officer, reporting to Mr. Carey. In recent weeks, British lawmakers have uncovered new documents that further threaten the reputation of James Murdoch, who oversaw British operations when the hacking took place. That leaves Mr. Carey as the company’s most stable senior executive untainted by the British tumult.
“He’s completely disconnected from the whole saga. He’s running the business,” the media tycoon and investor Haim Saban said of Mr. Carey. At a tumultuous time, “he’s the Rock of Gibraltar,” Mr. Saban added.
Despite Mr. Carey’s more public role, News Corporation is still very much a family business. “He’s influencing the day-to-day decisions in the company more than anyone ever has other than Rupert,” said Michael Nathanson, an analyst at Nomura Securities. But in the end, “I don’t think anyone is fooling themselves that this isn’t the Murdochs’ company.”