Murdoch mogul in dollars 30m pay-off

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The Independent Online
BARRY DILLER, the Hollywood mogul who resigned as head of Rupert Murdoch's Fox film and TV business in February, is collecting a dollars 30m ( pounds 15m) pay-off. The compensation comes on top of dollars 19m worth of News Corporation shares he has sold since leaving the media empire, of which he was a director.

Mr Diller's payout is nearly three times the dollars 11m-a-year package he is thought to have received from Fox. Even by Hollywood standards, the figure is regarded as high.

It is also larger than the dollars 27.3m of total dividends that Mr Murdoch is paying this year to News Corporation shareholders.

Bankers to the debt-laden media group have imposed severe restrictions on its spending, including limitations on what it pays to its shareholders.

News Corporation, which owns the Sun and the Sunday Times in Britain, refused to confirm the pay-off to Mr Diller. ' A lot of odd things happen in Hollywood,' a spokeswoman said.

Mr Diller, a 50-year-old multi-millionaire whose sharp tongue and brusque management style earned him the soubriquet 'Killer Diller', was unavailable for comment.

A University of California drop-out, Mr Diller worked his way up in Hollywood and later spent 10 years running Paramount, where his proteges included Michael Eisner, who is now chairman of Walt Disney.

His departure to the rival Fox studio in 1984 stunned Hollywood as much as this year's sudden exit from the Murdoch empire.

Mr Diller was widely credited with building up the 20th Century Fox film studio and its sister, the Fox chain of TV stations in the US.

The studio enjoyed huge success with made-for-TV series such as The Simpsons, but its recent film record has been poor. The successful Home Alone was followed by a string of box office flops, including Dutch and Prelude To A Kiss. Last week, News Corporation revealed that operating income from filmed entertainment tumbled by 40 per cent to Adollars 127m ( pounds 46m) last year, despite a 10 per cent rise in revenues to Adollars 2.42bn. The film division's profits, in an area well known for arcane accounting practices, are not stated.

Rather than appoint a successor to Mr Diller, Mr Murdoch decided to take charge of Fox himself and begin a new career at the age of 61.

'I'm just getting into it too late in life to learn all the tricks,' Mr Murdoch said last week. 'But you can apply some issues of taste, some issues of economics.'

Details of a financial deal with Mr Diller are contained in a document recently filed with the US Securities and Exchange Commission. This covers the issue of around dollars 30m worth of News Corporation zero coupon notes to Mr Diller, which he may sell on the stock market. This may also give him the chance to reduce his tax liability by effectively spreading his pay-off over more than one tax year. The document also reveals that Mr Diller now owns 900,000 News Corporation shares, down from the 2 million he held in June 1991.

A banker close to News Corporation said: 'The document relates to Mr Diller's severance terms and we were aware he was receiving something of the order of dollars 30m.' Asked why Mr Diller, who was said to have left Fox amicably, is entitled to any payment at all, he said: 'People who leave big companies are always said to have resigned and to have resigned amicably.'

News Corporation, which was forced into a huge debt rescheduling in 1990, last week revealed a 65 per cent improvement in net profit to Adollars 531m ( pounds 196m). The group's cash-flow statements showed that cash provided by its operating businesses in fact fell during the year from Adollars 526m to Adollars 501m, below the Adollars 740m spent on investing in new printing plant in the UK and Australia.

News Corporation succeeded in reducing its overall debts, but the cash raised to pay off its banks came from asset sales and new money from outside shareholders - sources Mr Murdoch is likely to tap further to help meet scheduled bank repayments in 1994.

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