Stern To Become DirecTV CEO When News Corp. Deal Is Final
By Greg Tarr -- TWICE, 12/8/2003
EL SEGUNDO, CALIF. — Moving further toward its planned acquisition of Hughes Electronics, News Corp. said it would name the 10-year CEO of its FOX Television stations group as president and CEO of Hughes' DirecTV unit once federal regulatory approvals are in hand.
News Corp. said it would name Mitchell Stern, who is currently chairman and CEO of the FOX Television stations group and Twentieth Television, as DirecTV president and CEO upon completion of its bid to acquire a 34 percent stake of Hughes Electronics.
In preparation for that move, current DirecTV president and chief operating officer Roxanne Austin announced she would leave the company upon completion of deal. Eddy Hartenstein, who is currently DirecTV chairman and CEO, will be named vice chairman of Hughes Electronics once News Corp. takes control of that operation.
At press time, News Corp.'s purchase of a 34 percent stake in Hughes Electronics was under review by the Federal Communications Commission and the Department of Justice. A decision was expected by the end of the year.
In his new role, Stern will report to Chase Carey, a long-time News Corp. executive, who is president and CEO-designate of Hughes Electronics.
As chairman and CEO of Fox's 35 owned-and-operated stations and its Twentieth Television syndication arm, Stern has reported to News Corp.'s deputy chief operating officer, Lachlan Murdoch, who will continue to lead Fox Television Stations and Twentieth Television.
"As head of Fox Television Stations, Mitch has led a large, diverse business in a highly competitive environment. Under Mitch, the station group has become the industry leader and I am confident he will lead DirecTV to the top of the pay-TV market if and when the acquisition is approved," Carey said.
"My job from day one will be to marry the best entertainment offerings with the most advanced and appealing technologies for the more than 12 million DirecTV subscribers. Viewers can expect an even better DirecTV, featuring greater programming choice, digital video recorders, more high-definition channels, more interactive services and enhanced customer service," said Stern.
In a prepared statement, Austin said: "I am very proud of what we have accomplished at DirecTV in the past two years. Serving as DirecTV's president and COO has been tremendously rewarding. I care deeply about DirecTV and its future success, but with this imminent transition I am taking the opportunity to pursue my long-term career goals."
Austin was named DirecTV president and COO in June 2001. Under her leadership, DirecTV's revenue increased 37 percent from $5.5 billion in 2001 to a projected $7.6 billion in 2003.
From the third quarter of 2001 through the third quarter of 2003, DirecTV subscriber growth has increased by 34 percent, as it has added more than 2.6 million net new customers.
Customer churn has been reduced from a monthly rate of 1.8 percent in 2001 to a current 1.5 percent, a 17 percent improvement. Operating profit before depreciation and amortization increased by approximately $780 million or over 360 percent from 2001 to 2003.
Net income has increased $378 million from a loss of $178 million in 2001 to a projected profit of $200 million in 2003. Annual cash flow improved from a negative $403 million in 2001 to a projected positive $400 million in 2003.
"I want to thank Roxanne for her effective leadership through a very challenging period and difficult circumstances at DirecTV," said Carey. "She brought a singular focus and boundless energy to DirecTV that has improved its performance in the last two years and positioned it for future growth."
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