Diller Stuns Hollywood, Quits Fox Inc.

Barry Diller, the volatile but innovative Fox Inc. chairman who built a fourth TV network on the strength of unsophisticated entertainment such as “Married With Children” and guerrilla programming tactics, unexpectedly resigned Monday.

Diller--whose razor-sharp tongue and impatient management style earned him the nickname “Killer Diller”--said he plans to work for himself, but did not elaborate. Sources speculated, however, that he will make a play for an existing network or start his own company.

“I’ve not had any direct discussions with anybody,” Diller said. “I think I’ve completed one phase of my life. Now I want to go on to the next. I want to put myself a bit at risk.”

Management of Los Angeles-based Fox, which includes Fox Broadcasting Co. and 20th Century Fox film studio, will be taken over by Rupert Murdoch, chairman of News Corp., Fox’s parent company.

Sources said there is no evidence that Murdoch--the Australian-born press lord who has made Fox a center of his global media empire--has a replacement in mind for Diller. Murdoch indicated that there will be no major changes in the network or its programming and that he will leave Diller’s senior management team in place.

While there was obvious friction between Diller and Murdoch over the years--including last year, when News Corp.’s debt crisis hindered Fox’s growth efforts and ate into company profits--both men said Diller left of his own accord.

Murdoch said he had known of Diller’s intentions for “a long time.” Others apparently did not. Members of Diller’s senior management team said they were shocked by the announcement.

Studio Chairman Joe Roth said he learned of Diller’s resignation Monday morning when he came into the office.

“I’m happy for Barry,” Roth said. “He spent the last 30 years of his life in these jobs, which is a lot of pressure. It’s great that he’s moving on to a situation where he’ll be the principal and make his own rules. I have no idea what he’s going to do, but I feel very confident he won’t show up in another ‘job.’ That’s what he’s saying, anyway.”

Record mogul David Geffen, one of Diller’s closest friends, said Diller kept his own counsel in deciding to abandon the chairman’s suite.

“At 50, he’s decided to go and work for himself,” Geffen said. “Barry’s wealthy enough so that it’s possible for him to go and do this. He’s been thinking about it for the past year. Murdoch tried to stop him, but Barry is determined to be his own boss.”

Diller came to Fox in 1985, after heading Paramount Pictures--at age 32--and being in charge of programming at ABC, where he created the movie-of-the-week and miniseries formats.

During his seven-year reign at Fox, Diller elevated the company from an also-ran in movies to a major film and television force. The Fox Broadcasting Co., given little chance of success when it took to the airwaves in the fall of 1986, is Diller’s greatest legacy.

The refined and formal Diller found success by taking the opposite stylistic approach with Fox. The network became a bona fide competitor on the strength of such programs as “Married . . . With Children,” “The Simpsons” and “In Living Color,” and Diller boldly programmed his top programs in competitive time slots. The Fox network is expected to make a $40-million profit this fiscal year.

The film division’s record is a bit spottier. It has struggled recently with “For the Boys,” “Shining Through” and “Grand Canyon.” But the studio dominated the holiday season a year ago with “Home Alone,” which has taken in more than $280 million domestically. Overall, 20th Century Fox captured a healthy 12% of the domestic box office in 1991 and 14% the year before.

In-house television production also has been a mixed bag for Fox. “L.A. Law” and “The Simpsons” are Fox’s only self-generated prime time hits. But the company has enjoyed success in the lucrative syndication market with “A Current Affair” and “Studs.”

Diller earns a reported $11 million a year as Fox chairman and has accumulated 2 million shares of News Corp. stock valued at $26 million.

Some credit his success to an intimidating and unforgiving management style. A recent television documentary, “Naked Hollywood,” portrayed Diller as a Gucci’d gunslinger. And a famous story concerns the time actress Farrah Fawcett supposedly bumped into Diller at a Christmas party and symbolically--if incorrectly--wished him happy birthday.

Entertainment analyst Lisbeth R. Barron of S. G. Warburg & Co. in New York said Diller achieved much of what he set his sights on.

“There have been a lot of companies that wanted to build a fourth network, but no one else was able to do it,” she said. “So that’s a major accomplishment.” On the film side, Barron added, “Fox also is high in market share and profitability.”

Jeffrey Logsdon, an analyst with Seidler Amdec Securities, said Diller’s departure may signal his frustration at transferring profits generated by his film and television operations to News Corp.

“One can speculate that perhaps the financial restrictions, because of the corporate debt of its parent, News Corp., finally became problematic,” Logsdon said. “The network and studio have been sending a fairly significant sum of cash upstream.”

In recent months, Diller has expressed distress at the high cost of making and marketing movies. One source close to the company noted that he also had been conspicuously absent over the past three weeks from all the TV network’s meetings about pilots for the fall season.

Producer-manager Sandy Gallin, another Diller friend, said he would not be surprised to see Diller put together the backing needed to purchase NBC or CBS, both of which reportedly are available. Others have speculated that Diller has his sights set on politics.

Diller was mum.

“There will not be substance until there is,” he said in his usual cryptic style. “When I left Paramount it was a surprise. When I left ABC, it was an even bigger surprise. Now it’s a surprise that I’m leaving Fox. That’s the way I like, and I’m proud of that.”

Diller said he expects to leave his posts no later than April 1.

Times staff writers Elaine Dutka and David Willman contributed to this story.