Some at Fox Fear a New Murdoch Era : Entertainment: Studio executives worry that with Barry Diller gone the media baron will push his fabled sensationalism on the television product.

Employees at KTTV-Channel 11, Fox’s local TV station, started wondering when they saw Rupert Murdoch’s green Mercedes-Benz convertible showing up in Fox’s Sunset Boulevard parking lot.

Murdoch makes it a habit to pop in on the staff and executives of his global media empire. But lately he had been spending more time with Greg Nathanson, head of Fox’s seven TV stations around the country. Murdoch’s daughter, Elizabeth, works as one of Nathanson’s assistants.

Indeed, Fox executives say that over the last year, Murdoch--the media baron best known for his tabloids’ bare breasts and conservative politics--has become increasingly involved in the operations of Fox’s TV network and stations.

And now, with Murdoch set to take center stage as the hands-on chief executive of one of Hollywood’s major television and film studios, the worry both inside and outside the company is that Murdoch will increasingly stamp his brand of fabled sensationalism on Fox’s TV product.

“I don’t think there are going to be huge changes,” says entertainment lawyer and power broker Peter Dekom. “But you have to be naive not to think he will put his imprimatur on the company.”

In the past, Murdoch, chairman of Fox Inc.’s parent firm, News Corp., frequently deferred in matters of programming to Barry Diller, the demanding Fox studio chief who quit Monday with plans to start or buy a company. Diller launched the Fox TV network with programming designed for the 18- to 34-year-old audience, including such audacious shows as “Married . . . With Children” and “The Simpsons.”

That’s not to say Murdoch’s presence wasn’t felt.

Fox’s reality-based shows, such as “A Current Affair,” “America’s Most Wanted” and a now-defunct series called “The Reporters,” are commonly identified with Murdoch because they were developed by loyal New York-based associates who knew him before he acquired Fox beginning in 1985. Personally, Murdoch is a big fan of “A Current Affair,” once extolling the syndicated program as “good, old-fashioned, foot-in-the-door, investigative reporting.”

Without Diller as a buffer, some people fear the worst.

“The next thing coming is televised executions,” warns one former senior Fox TV executive who did not want to be identified. “Barry was the last gasp of decency, taste and morality at Fox. He tempered a lot of what Murdoch wanted to do.”

But Murdoch usually has shown more flexibility and balance than his detractors would suggest when it comes to running his various businesses.

His News Corp. empire includes such perfectly upright publications as the Times of London, the staid Harper Collins book publishing house and the emerging BSkyB satellite TV service in Great Britain. He helped finance the critically acclaimed Australian film “Gallipoli,” about a World War I battle that his father covered as a war correspondent.

Murdoch’s recent immersion in the details of Fox’s television operations is characteristic.

At News Corp.’s huge printing plant in the Docklands of East London, he can been seen eating in the canteen, talking over production problems with a mid-level manager. He’ll suddenly appear in programming meetings on the Fox lot. A thick, black binder called the “fast report” provides Murdoch with weekly, line-by-line breakdowns of revenue and profits at hundreds of subsidiaries.

And while Murdoch is widely expected to play a bigger role in Fox’s television properties than its movie operations, Diller says he has no doubts about Murdoch’s ability to run a movie studio: “He’s a great editor, period. That’s what movies are about--editing.”

Murdoch says that his growing involvement in Fox is a result of the studio now accounting for close to half of News Corp.’s profits.

Over the last two years, much of Murdoch’s time in running News Corp. has been taken up with refinancing $7 billion in debt, accumulated as a result of a decade’s worth of acquisitions of everything from Fox to TV Guide.

After a series of asset sales and new debt and equity offerings, News Corp. today is less rooted in its publishing past and more focused on becoming an electronic media conglomerate.

Already Murdoch has begun shaping his new team at Fox.

Chase Carey, the studio’s chief financial officer, is expected to be named chief operating officer.

The other four operating division heads--Joe Roth in film, Lucy Salhaney in television, Jamie Kellner at the network and Nathanson at the TV stations--will report directly to Murdoch.

Until Diller privately began making his intentions known last year, “it had never occurred (to me) in my life to run a studio,” Murdoch says. “It’s going to be interesting.”

The Murdoch/Diller Record at Fox Under departing Fox Inc. Chairman Barry Diller and Rupert Murdoch, chairman of Fox parent News Corp., the television and motion picture company has challenged convention--with mixed reviews for its creative efforts but with financial returns that have steadily improved.

Highlights

In just 4 1/2 years, Fox Broadcasting launches four-night-a-week programming on more than 130 affiliates nationwide.

By June, 1990, Fox has two of the nation’s five most popular programs: “The Simpsons” and “Married ... With Children.” Such daring shows--along with the hip “In Living Color” --earn Fox a reputation for challenging staid network programming.

“Home Alone” becomes the highest-grossing film comedy ever, taking in more than $280 million domestically. Other 20th Century Fox film hits include “Sleeping With the Enemy,” “Aliens,” “Cocoon” and “Die Hard 2.”

Lowlights:

Fox Broadcasting’s first program, “The Late Show Starring Joan Rivers”--for which Diller lures the comic from her position as Johnny Carson’s “Tonight Show” backup--flops in May, 1987, after just eight months on the air.

Early broadcasts of the prime time Emmy Awards by Fox result in low ratings and industry grumbling.

“For the Boys,” which cost about $40 million, is a big box-office disappointment for 20th Century Fox. The film, which opened over the holidays, has taken in about $18 million in domestic ticket sales. Other weak performers include “Dutch,” “Dying Young” and “Love Potion Number 9.”

Profit (loss) for major Fox Inc. units

1989 1990 1991 Fox Broadcasting* ($3) $20 $40 Fox TV Stations* $111 $123 $156 20th Century Fox Film Corp.** $311 $58 $165

* Operating profit ** Net earnings Source: County Natwest USA, company reports