Fox Chairman Exits to Launch TV Venture

Sandy Grushow, the hard-charging chairman of Fox Entertainment Group, surprised Hollywood on Monday by announcing that he would leave the network immediately to become a TV producer.

“This was, and is, an extremely difficult decision for me,” Grushow said in an e-mail to Fox executives.

Grushow, 43, had been negotiating a new contract with Fox, where he has worked for nearly 20 years. Then he abruptly changed course, triggering a clause in his current employment deal that allows him to start a TV production company that Fox must finance for the first three years, to the tune of at least $10 million.

The contract stipulated that he could trigger the clause beginning Jan. 1, and he did so the following day, telling Fox Group Chairman Peter Chernin on Friday that he was stepping down.

Chernin wasn’t available for comment Monday. In a statement, he said that Grushow’s “contributions to the evolution of Fox are too numerous to list, but I can say that Sandy’s determination and savvy leadership over these past years have helped make the network and studio what they are today.”

For the last four years, Grushow has been in charge of the network’s entertainment division, as well as Twentieth Century Fox Television, one of the industry’s leading production studios.

Fox executives said Grushow would not be replaced. Instead, Chernin, who also oversees the Fox movie studio, will assume many of his duties. Fox Entertainment President Gail Berman, and studio co-Presidents Gary Newman and Dana Walden will report directly to Chernin.

Sources said several factors contributed to Grushow’s sudden exit.

An aggressive and ambitious executive, Grushow has long been interested in moving up the ladder. But his boss, Chernin, isn’t going anywhere anytime soon. In addition, Rupert Murdoch, chairman of News Corp., which owns 82% of the Fox Entertainment Group, has been grooming his sons for key spots in the corporation, not longtime lieutenants like Grushow. Beyond that, Murdoch and Grushow have had a rocky relationship.

Grushow left Fox once before, in 1994, when Murdoch fired him, writing him off as little more than a marketing guy, not a creative programming executive.

This time, “Sandy is not being pushed aside,” said Tom Sherak, a partner in Revolution Studios who gave Grushow his first break in the business, hiring him in 1983 as a runner at the Fox movie studio marketing department.

“This is Sandy wanting to take the next step, and this is the next step,” Sherak said.

Grushow quickly gained a reputation for synthesizing story lines and concepts, Sherak said. He worked on advertising campaigns for such movies as “Big,” “Broadcast News” and “Die Hard.”

“Sandy was always great at writing copy lines for movies,” Sherak said.

But others noted that there were complaints that Grushow’s penchant for heavy editing and dictating the content of the network’s promotional spots, smothered the creativity of his subordinates. Sources said Grushow’s controlling nature caused tension with other Fox executives, including Berman.

Berman was attending a funeral Monday and was unavailable for comment.

Linwood Boomer, executive producer and creator of Fox’s “Malcolm in the Middle,” said that Grushow alienated some people with his management style, but he expected that Berman would improve relations between the network and studios. Before joining Fox, Berman was president of Regency Television, which produces “Malcolm in the Middle.”

“The conventional wisdom at Fox was that Gail was in charge of the creative side and Sandy’s strength was marketing and promotion,” Boomer said. “I hope this will free [Berman’s] hand a bit ... and I hope they will add more to her plate because I think she can handle it.”

After five years at the Fox movie studio, Grushow warily joined the fledging Fox TV network in 1988, two years after its launch. He started as marketing and advertising chief and quickly moved up in the ranks, eventually becoming programming chief.

Three years after he was ousted, Grushow was called back to Fox in 1997. He had spent the intervening years on a failed venture called TELE-TV. At Fox, he became the head of the TV studio and oversaw production of such hits as “The Simpsons,” “X-files” and “Ally McBeal.”

During Grushow’s tenure, the studio reeled in $1.5 billion in profit, including $400 million for this television season. The television network last season for the first time won two of the three sweeps periods in the most lucrative category, viewers aged 18 to 49. It came in second for the season among that key demographic.

This fall, Fox got off to a fast start because of the Major League Baseball playoffs and World Series. Then it stumbled. Its most heavily hyped shows, “Skin” and “Joe Millionaire,” flamed out. But the network has had modest success with “The O.C.,” and later this month its ratings powerhouse “American Idol” returns.

In an interview Monday, Grushow dismissed speculation that Fox’s struggles to develop shows was a factor in his departure.

“Fox has had as much, if not more, success developing new scripted and unscripted shows in the last four years as any other network,” Grushow said. “I’m extremely excited about the opportunity of starting my own company.”

As co-president of the studio, Walden, who has worked for Grushow for seven years, will essentially become his boss. Grushow’s TV production venture -- named “Phase Two” -- will be a unit of the studio.

“I think this was a matter of Sandy evaluating his future as well as the future of the business,” Walden said. “I don’t think there was a lot of room for him to grow in his current position.”

Jamie Kellner, the chairman of the WB network and one of the early architects of Fox television, agreed. “Sandy is a very talented guy. He’s one of the few guys around who could get a chance at the top job at an entertainment company, and he’s not going to get that at Fox.”

Media analyst Larry Gerbrandt, chief operating officer at Kagan World Media, called Grushow one of the stronger entertainment executives in Hollywood. “These executives move around a lot,” Gerbrandt said. “I wouldn’t be surprised to see Grushow resurface relatively soon.”

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Times staff writer Maria Elena Fernandez contributed to this report.