News Corp President Chernin leaving

By Robert MacMillan

NEW YORK (Reuters) - News Corp President and Chief Operating Officer Peter Chernin will leave after 12 years on the job, depriving the media conglomerate of its second-highest ranking executive as it deals with a severe decline in advertising revenue.

Chernin, 57, is a well-regarded Hollywood executive who has been a critical force in News Corp's success in movies and TV. But though he has been with the company for nearly 20 years, it was unlikely that Chernin would ever get more than a secondary role because Murdoch is expected to eventually hand the reins to his son James, 36.

"I think that Murdoch is viewed as the visionary, and Chernin is viewed as the operator ... the guy who says, 'I get things done," UBS analyst Michael Morris said.

"Certainly losing a leader with Mr. Chernin's abilities and reputation is yet another challenge for the company," said Morris, who has a hold rating on News Corp.

News Corp Chief Executive Rupert Murdoch and Chernin had failed to reach an agreement on a new contract, so he will leave when his existing contract expires on June 30, the company said on Monday.

Chernin will start a Fox-based production company as well as other ventures, News Corp said.

Chernin will be under a six-year deal that calls for him to produce movies and TV shows for Fox, which must buy at least two movies a year from him, News Corp spokeswoman Julie Henderson said.

He would get a fee "at least as favorable as the most favorable agreement" that the studio has with other producers, she said.