Rupert Murdoch Loses His Lieutenant: Peter Chernin Leaving News Corp.

All of the smart money said that Peter Chernin would never leave his job as the number two guy at News Corp. and that all the will-he-won’t-he we’ve heard in the past few months was simply a negotiating ploy.

Looks like all of us were less clever than we thought. Chernin, whose contract as COO expires in June, won’t be staying on. LA Weekly columnist Nikke Finke reported the story first today, and it has since been followed up by The Wall Street Journal and the Los Angeles Times.

News Corp. (NWS) says the Fox studio and TV operations that Chernin ran will report to CEO Rupert Murdoch.

Here’s the official statement from Murdoch:

‘Peter’s contributions to the Company over the past two decades have been immeasurable. He has led important businesses and nurtured talented managers,’ said Mr. Murdoch. ‘We are fortunate to have such a strong and seasoned group of leaders at our Fox companies and we are confident that our success will continue. To that end, Peter and I will work closely over the next four months to ensure an effective transition.'”

Chatter about Chernin’s departure had picked up over the weekend, but even people who were telling us that Chernin was on the way out didn’t seem to believe it. He had a great gig at News Corp., pulling down nearly $29 million a year, and he got to run two of the company’s  best-performing assets: its Hollywood and Internet operations.

No word on who’s going to step into Chernin’s shoes yet, so you can expect plenty of chatter regarding Rupert Murdoch’s complicated family life: He has at least three children — Elisabeth, Lachlan and James — who’ve been in the running to take over for him at one time or another. And his third wife, Wendi, is also a prominent force within News Corp. (News Corp. is the owner of Dow Jones, which owns this Web site.)

What’s next for Chernin? Unclear. He famously has a contract that entitles him to a generous production deal at his former employer’s Fox studio. Included in the deal is a requirement that Fox buy at least two movies a year from Chernin.

But Chernin made no bones about his interest in running News Corp., and his name frequently comes up when other media companies are looking for new management. Most recently, his name was floated as a possible Yahoo (YHOO) CEO. It would be surprising if making movies were enough to keep him occupied for long.

Full text of the press release:

New York, NY- February 23, 2009–News Corporation Chairman and Chief Executive Officer Rupert Murdoch today announced that Peter Chernin, the Company’s President and Chief Operating Officer and CEO of the Fox Group, will step down when his contract expires on June 30, 2009. The Los Angeles-based Fox businesses will report directly to Mr. Murdoch upon Mr. Chernin’s departure.

“Peter’s contributions to the Company over the past two decades have been immeasurable. He has led important businesses and nurtured talented managers,” said Mr. Murdoch. “We are fortunate to have such a strong and seasoned group of leaders at our Fox companies and we are confident that our success will continue. To that end, Peter and I will work closely over the next four months to ensure an effective transition.”

“Peter is a valued colleague and a trusted friend. There are few executives, at any company, that combine his maturity, his experience, and his skills as a communicator and leader–I will miss him. It is understandable that at this stage in his life he would want to do something new after serving News Corporation and our shareholders so well for so long.”

Commenting on his departure, Mr. Chernin said: “This was a difficult decision for me. Next week marks my 20th anniversary with News Corporation and the Company has been a huge part of my life. During my years here I have had the great privilege to work for one of the true visionary leaders of our time, Rupert Murdoch. As a leader, Rupert is unparalleled.  He is bold, entrepreneurial, innovative, creative and incredibly supportive. As a partner and friend he has been inspiring, fascinating, and most of all, tremendous fun.

The other great privilege of these years has been to work with all of my colleagues around the world at News Corp. I owe more to them than I can possibly express. Collectively, they represent the best in this industry. They have built great businesses, created new models and redefined existing franchises. Above all, they are individuals of unmatched character and collegiality.

I will miss Rupert and my colleagues deeply. But I have no doubt they will continue to thrive without me.”

Mr. Chernin will launch a Fox-based production company later this year, among other ventures. In addition, he will continue his efforts as Chairman of Malaria No More.

Mr. Chernin, 57, joined News Corporation in 1989 and has served as President and Chief Operating Officer since October, 1996. During his two decades with the Company, Mr. Chernin headed both Twentieth Century Fox Filmed Entertainment and, earlier, the Fox Broadcasting Company.