Company Town : Salhany-Murdoch Discord Finally Hit the Boiling Point : Television: ‘She wasn’t happy and Murdoch wasn’t happy,’ insider says.

Three months ago, bedeviled by rumors that she was about to be replaced as Fox Broadcasting chairman, Lucie Salhany approached Fox Inc.’s Rupert Murdoch and demanded a vote of confidence.

After receiving that vote, an emboldened Salhany invited skeptics to have the rumor debunked by Murdoch himself. “Go ahead, call him,” she advised one person. “I’m not being replaced.”

But now it turns out the reprieve only masked a deeper schism between Salhany and Murdoch over the direction of the upstart fourth network--which resulted in Salhany’s formally leaving her post Thursday after 18 months on the job.

Despite recent high-profile gains such as snaring the National Football League and investing $500 million in New World Communications Group to convert a dozen stations to Fox affiliates, the network under Salhany had suffered a number of setbacks, including lower ratings and the disastrous bid to create a late-night talk show around Chevy Chase.

For her part, Salhany was said to be frustrated by Murdoch’s intensely hands-on management style and the shifting corporate politics of News Corp., where Murdoch in recent months has moved several longtime trusted managers from the newspaper side into television.

Irritated by what she perceived as poaching on her turf by other Fox executives, Salhany finally forced the issue with Murdoch over the weekend, even though her contract had less than a year remaining. “She wasn’t happy and Murdoch wasn’t happy,” one insider said. “It was time to move on.”

Sources now say Murdoch had been casting about for a new head of Fox for some time. Several months ago, he held talks with longtime ABC News President Roone Arledge. He also considered moving Sam Chisholm, a trusted manager who oversees News Corp.’s non-U.S. TV operations, to Los Angeles.

In the wake of Salhany’s departure, Fox has reorganized the studio’s TV operation. Chase Carey, executive vice president of Fox Inc., has been handed the largest chunk of the empire, including oversight for the network, the studio’s owned TV stations, domestic syndication and the new cable TV network f/x.

Peter Chernin, the former Fox Entertainment head who now runs motion pictures, will assume responsibility for network TV production.

The moves underscore the suddenness with which Fox and Salhany came to a parting of the ways--although Carey has been put in charge of the consolidated TV operations of the studio, no replacement was named as head of the network.

Carey, a Harvard MBA with a handlebar mustache and the build of the champion rugby player that he once was, is strong on finance and administration but has had limited experience on the creative side of the business.

Nonetheless, Carey said the core team of Fox executives--Sandy Grushow in programming, Preston Padden over affiliate relations and John Nesvig overseeing advertising sales--will remain in place.

Salhany, a successful TV syndication executive who is credited with launching “The Arsenio Hall Show” and revitalizing “Entertainment Tonight” while at Paramount, is expected to rebound quickly. Sources said she is already discussing the possibility of joining CBS if it completes its merger with QVC, as head of the network’s expansion into the syndication business.

Murdoch’s more direct involvement at Fox began three years ago, when the jet-hopping global media baron decided to base himself in Los Angeles and make his U.S.-based entertainment operations the focus of his attention. Murdoch’s presence was at least partially responsible for two previous high-profile departures: those of Chairman Barry Diller and film studio chief Joe Roth.

The 7-year-old Fox network has been undergoing a strategic shift over the past year. Originally conceived as a mini-network best known for its youth-oriented programming such as “The Simpsons” and “Married . . . With Children,” Murdoch has sought to broaden its reach with football and news.

Such moves have given Fox at least a temporary boost. In the recently concluded “upfront” selling market, the fourth network sold $750 million in advertising time for the 1994-95 season, a 50% increase over last year. The NFL deal was also a prime reason New World switched its affiliations.

Still, with limited new programming successes and seven nights of programming to fill, Fox executives face a difficult task in making sure the network doesn’t slip any further than it did this past season.

Once a spunky upstart, the network is now approaching--in television years anyway--comfortable middle age.

Its status as the spoiler is challenged by rival networks being launched by Paramount and Warner Bros., and the prospect of former progenitor Diller now running CBS is said to have Murdoch deeply concerned. In that sense, the future of Fox may have as much to do with who is on the outside as with who is running things inside.