UPDATE: It’s official. Chase Carey is returning to News Corp as Deputy Chairman, President, and Chief Operating Officer and to rejoin the Board Of Directors. The press release, and memo from Rupert Murdoch are below. At DirecTV, general counsel Larry Hunter will fill in for Carey.

EXCLUSIVE: This follows my reporting that the President/CEO of DirecTV was in talks with News Corp. Just now, I was informed, “The deal is done,” by my insiders. Indications are the job Carey negotiated will be structured differently than the one Peter Chernin occupies in that it will be almost exclusively operational. I can tell you that Carey will not be as integrally involved in Hollywood as Chernin has been; he by all accounts is not moving to Los Angeles, and so won’t closely oversee the film and television business like Chernin did. At one time co-chief operating officer with Chernin of News Corp, Carey has remained incredibly close to Rupert Murdoch. So Rupe is gaining an even more trusted and loyal executive to smooth all those constant Wall Street worries about successorship to the 78-year-old chairman. And the scuttlebutt is that Rupert’s youngest son James Murdoch, considered the heir apparent, is less ready today than ever to take over News Corp. And daughter Elizabeth Murdoch won’t even join the News Corp board despite being asked to by her dad. So Carey will be in the No. 2 job a good long while. Already, Rupert-watchers are waiting to see exactly what title is bestowed on Carey: Chernin’s, or an elevated “Vice Chairman”.

Back in the day, Chase not only used to speak for the boss but also carried water for Murdoch on many battlegrounds, from fighting Nielsen’s rating system, to attacking other media conglomerates, to landing DirecTV for News Corp. Carey became president/CEO of DirecTV in 2003 when Murdoch finally acquired 34% controlling interest in the largest U.S. home satellite TV service. But in December 2006, John Malone horsetraded his large stake in News Corp for DirecTV, and Carey stayed on. But he also had to resign as a director on News Corp’s board.

My news today ends months of speculation that Carey might return to News Corp to replace Chernin who retires as prez/COO at the end of June. Even longtime Wall Street media analyst Jessica Reif Cohen recently suggested in a broker’s note that Carey may return as an “interesting potential solution” to Murdoch’s need for a designated No. 2. Carey himself had been downplaying all the chatter, telling reporters in March that “I’m focused on moving DirecTV forward and enjoying what I’m doing with DirecTV.” But who else at one time has served on News Corp’s board, and at one time shared power with Chernin, and at one time oversaw so many parts of Rupert’s diverse empire? (Carey was also a senior exec at Sky Global Networks, Fox TV, and Fox Inc.) No one else is so ready to backstop Rupert without a steep learning curve.

But Murdoch’s media conglomerate is in a very different place than it was in the late 1990s/early 2000s. Instead of a conquerer, Murdoch now needs a conciliator since cooperation is the name of the game among Big Media. Witness the integral role which Chernin played in the inception and growth of Hulu alongside NBC Universal and now Disney.

Subject: Memo from Rupert Murdoch

Dear Colleagues:

I’m pleased to let you know that today we are announcing Chase Carey will return to News Corporation as Deputy Chairman, President and Chief Operating Officer and rejoin our board of directors. Attached is the press release.

Chase has been an important advisor and a close friend to me for several decades. I know that his leadership, strategic capabilities and more than 15 years of experience at our Company will prove invaluable as we face the challenges and opportunities before us.

As many of you know, Chase joined News Corporation in 1988 and played a central role in managing the operations and strategy of several key businesses. He held senior positions during his tenure, including Chief Executive Officer of Sky Global Networks and Co-Chief Operating Officer of both Fox Entertainment Group and News Corporation, before taking the CEO position at DIRECTV.

His appointment caps a particularly exciting and active period for News Corporation, and we all welcome him back.

We named a new head of digital operations, Jon Miller, who has already made great headway at the Fox Interactive Media operations, and is spearheading a global initiative to monetize our valuable print content online. Jon is actively evaluating all of our current digital business models with an eye to creating the kinds of new, innovative approaches that will ensure News Corporation retains its leadership position.

We installed new leadership at MySpace, injecting a renewed energy and focus that I am confident will restore its momentum and profitability.

We restructured our LA-based businesses, with Tom Rothman and Jim Gianopulos assuming greater oversight of our creative production divisions and Tony Vinciquerra adding additional responsibility for our cable and broadcast operations. This new leadership team has already distinguished itself in a difficult economic climate.

This is not a time to stand still or allow the difficulties we’re all facing to overwhelm us. We will continue to invest smartly in our businesses, better rationalize cost structures, grow our market share and emerge bolder, better aligned and more competitive than ever.

I am confident that the right leadership team is now in place to steer us through these difficult times.

Thank you all for your efforts.
Rupert Murdoch

Chase Carey Returns to News Corporation as Deputy Chairman, President and Chief Operating Officer

New York, NY, June 3, 2009 – News Corporation Chairman and Chief Executive Officer, Rupert Murdoch today announced the appointment of Chase Carey to Deputy Chairman, President and Chief Operating Officer, effective July 1. Reporting to Mr. Murdoch, he will have oversight of News Corporation’s global operations and will be based in New York.

Mr. Carey, 55, will join the Board of Directors of News Corporation on July 1 when Peter Chernin steps down as a Director.

The appointment marks a return to News Corporation for Mr. Carey who spent 15 years as a senior executive at the Company before becoming Chief Executive Officer of The DIRECTV Group in 2003.

“Chase has been one of my closest advisors and friends for years and I am delighted we’ll once again be working together across our businesses as we face the challenges and great opportunities ahead,” said Mr. Murdoch.

Mr. Carey said, “Under Rupert’s leadership, News Corporation has always been the boldest, most innovative media company in the world. With its leading franchises, News Corporation’s growth opportunities are second to none and I am thrilled to be returning at such a transformative time for our businesses across the globe.

Prior to DIRECTV, Mr. Carey was co-Chief Operating Officer of News Corporation from 1996 to 2002, as well as co-Chief Operating Officer of the Fox Entertainment Group from 1998 until 2002. Mr. Carey served on Board of Directors of News Corporation from 1996 until 2007 and on the Board of the Fox Entertainment Group from 1992 until 2002.

In his tenure with News Corporation, Mr. Carey played a central role in managing the operations and strategy of the Company with particular focus on its worldwide television business that encompasses the FOX network, Fox Television Stations, Fox’s cable programming group, and News Corp.’s international satellite operations.

Among key initiatives he led were the launch and growth of Fox Sports, the expansion of the Fox Television Stations group from seven stations to 35 stations (subsequently reduced to 27), the emergence of Fox cable channels such as Fox News Channel, FX and the National Geographic Channel, and the building of satellite platforms in Europe, Asia and Latin America.

Mr. Carey joined Fox in 1988 and served in numerous roles, including Executive Vice President and Chief Operating Officer of Fox, Inc. and Chairman and Chief Executive Officer of the Fox Television Group. Mr. Carey also served as a Director, President and Chief Executive Officer of Sky Global Networks. Prior to joining News Corp. he was employed at Columbia Pictures in senior capacities from 1981 to 1987.

In addition to the Boards of News Corporation and Fox Entertainment Group, Mr. Carey also served on the boards of NDS, Gemstar-TV Guide, and BSkyB during his years with the Company.

Mr. Carey is currently a Trustee Emeritus of Colgate University. He is a graduate of Colgate University and Harvard Business School.