Contract Loophole Could Ease Cherin Move to Disney

26 November 2004

A new contract penned this summer could allow News Corp president Peter Cherin to leave the group without notice to become boss of a rival media giant like Walt Disney Co.

Recently filed with the Securities and Exchange Commission, the contract is phrased in such a way that Cherin could quickly fill the shoes of current Disney chief executive Michael Eisner, due to depart in 2006.

The contract stipulates a six month notice period and consent of News Corp chairman Rupert Murdoch if Cherin wanted to leave and join a rival company that is part of a public conglomerate. However Disney itself is a public company, thus potentially excluding it from the resignation clauses and allowing a swift exit by Cherin, said a source close to the situation.

A successor to Eisner is due to be announced by June 2005.

Data sourced from Wall Street Journal Online; additional content by WARC staff