The Man Behind Rupert's Roll

Little wonder that the Murdochs are the first to cheer the rise of Chernin into the spotlight. His organizational discipline is welcome at a company that in 1990 nearly collapsed under its global debts. Among industry insiders, Chernin is highly regarded for helping to focus and integrate the sprawling company in innovative ways. He's also helped make its film and TV businesses more profitable, not least by giving the green light to "Titanic," the biggest-grossing film of all time. About four years ago, the former book editor persuaded Murdoch to spend eventually $70 million to bag some of Hollywood's top writers and producers, including David Kelley, the talent behind "Ally McBeal" and "The Practice," and Chris Carter, who developed "The X-Files." The result: Fox is today the top producer of TV shows, and revenues are flooding in. "He's literate, understands stories and has a wicked sense of humor," says "Titanic" director James Cameron. "He gets what movies are all about." Chernin is helping to pull together into a single database the company's huge trove of customers, who range from theater chains that rent Fox films to subscribers to the News Corp.-owned TV Guide. The project, called E-Direct, will be a spawning ground for interactive businesses.

Chernin has also excelled at marketing the company to Wall Street, wowing high-wattage audiences of investors. Two weeks ago, at a Merrill Lynch media conference at London's posh Royal Lancaster Hotel, he told investors that sales from a handful of reruns alone will produce $1.5 billion in profits over the next few years. "Holy s--t!" one audience member yelped. "He's a great presenter," says Lachlan. Having operated in Murdoch's vast shadow, Chernin had been little known on Wall Street until recently. But now, says Gordon Crawford, an investment manager whose fund is News Corp.'s third largest shareholder, "it's important to project the image that News Corp. isn't a one-man show." In Europe, too, Chernin has been helping Murdoch spearhead a high-profile push to expand. "Peter deserves the attention," Murdoch says. "He has shown himself to be an extremely able leader and manager of people."

From early on, Chernin seemed destined to become a Murdoch favorite. Soon after Barry Diller, the former Fox chief, hired Chernin to run the Fox network programming division, Murdoch spotted him at a management retreat in Santa Barbara, Calif. "He asked if I'd give him a ride back to Los Angeles," recalls Chernin. The younger man's sharp management skills and personal touch helped him steadily climb the corporate ranks, heading the network and then the studio. "He's taken a tremendous load off of me to think more about strategy," Murdoch says. Several former colleagues say another factor figured in Chernin's promotion. Unlike some other top News Corp. execs who have come and gone--among them Diller and Preston Padden--he's nonthreatening, willing to execute Murdoch's vision with little questioning.

At the moment, Chernin is focusing on the next glimmer in Murdoch's eye: the European television market. Since last year the two have trudged from Paris to Bonn, negotiating, often without success. Last December, Chernin approved News Corp.'s $40 million deal to take control of TM3, a women's cable channel in Germany with few viewers and $25 million in annual losses. Then in May, Chernin directed TM3 to pay more than $400 million to land soccer's popular European Champions League, stunning the soccer-crazed nation. It was a strategy inspired by Fox's upstart purchase of NFL viewing rights for $1.6 billion in 1993--a move that helped solidify Fox as the "fourth network." The soccer deal "was akin to the Lifetime Channel buying the rights to the NFL," Chernin says.

Now Chernin, facing a mid-August opening of the Champions League season, is in a race to make TM3 into the little channel that could. Last month, during a visit to Munich, he openly wondered if the current TM3 managers measure up. "I don't believe any of them understand the aggressive, go-go News Corp. culture," he said, sounding positively Murdochian. Chernin projects losses of about $100 million for three years running because of the soccer games. But he believes the gamble will be worthwhile.

Another gamble seems to be paying off for Chernin--living life on the edge with Rupert Murdoch. "I may very well have the best job in the world," says Chernin. "I get to control movies seen all over the world. Magazines. Channels. Internet businesses. Television businesses. What could be more fun." For Chernin and News Corp., the big question will be how long the fun can last. And whether Chernin, in making himself into an executive in the image of Rupert Murdoch, will have to confront other Murdochs down the line. For now, both Chernin and Murdoch play down the potential for a succession squabble. The Murdoch children are "20 years younger than Peter, so there's plenty of time for everybody," says Murdoch. Chernin says, "It's no big deal." He always knew that Murdoch intended for his kids to run the show eventually. If at some point everyone's not comfortable with the setup, he says, "life will go on." For now, so will the Murdoch drama.