Fox Studio Chief Calls It Quits After Box-Office Slump

Fox Filmed Entertainment chief Bill Mechanic is leaving as head of the studio under intense pressure from Rupert Murdoch, chairman of Fox parent News Corp., and the mogul’s No. 2 executive, Peter Chernin.

Mechanic confirmed in an interview that he is leaving, calling it a resignation. But other sources said Chernin fired Mechanic this week, and informed Murdoch about it.

The move comes amid a prolonged box-office slump, culminating in the current animated flop “Titan A.E.” A source said Chernin “lost confidence” in Mechanic after that and other expensive, high-profile failures such as “Anna and the King” and “Fight Club.”

Mechanic for some time has had strained relations with both Murdoch and Chernin, Mechanic’s direct boss. Chernin hired Mechanic away from Walt Disney Co. in 1993 to be president of the studio and then promoted him to chairman in 1996.

Mechanic said he has no job lined up. Fox has no replacement for him, but Chernin will probably take a more active role while the company looks for a successor.

“This has been brewing for a while. I’m looking to do something different. It’s an opportunity to have creative freedom and do what I want to do,” Mechanic said.

He declined to comment on his relationships with Murdoch and Chernin. But in an interview earlier this year, Mechanic told The Times that Murdoch “is, as he should be, completely intolerant of failure.”

Mechanic’s departure comes at an especially sensitive time for News Corp., which has been preoccupied with the planned spinoff of its global satellite television operation in an initial public offering. One of Murdoch’s top deputies, Chase Carey, is being deployed to head the venture.

Mechanic, a highly respected executive who is well-liked by his staff and filmmakers, has had a generally strong run as Fox’s movie chief, overseeing such mega-hits as James Cameron’s epic “Titanic,” “Independence Day” and the Farrelly Bros.’ raunchy comedy “Something About Mary.” At Disney, he was credited with building its hugely profitable video business.

However, he has been under increased pressure to turn around the sagging fortunes of the movie division, which only recently got a lift from the comedy hit “Big Momma’s House.”

Earlier this year, Fox’s highly anticipated Leonardo DiCaprio movie, “The Beach,” bombed domestically with barely $40 million in ticket sales, though the film did more than $100 million overseas and the studio said it has turned a profit.

Fox’s slump prompted Chernin to refocus some attention on the movie side of the business that he once headed himself. Mechanic downplayed the action at the time, but sources at the studio said he resented Chernin breathing down his neck.

It’s also widely known that Murdoch is tough on Mechanic when the movies lose money, and that his conservative tastes differ vastly from Mechanic’s. Mechanic was passionate about the graphically violent “Fight Club,” which Murdoch is known to have loathed. In addition, Mechanic’s strong-willed nature often grated on Murdoch, one of the industry’s toughest moguls.

“Bill is very passionate. When he believes in something, he doesn’t let go. Murdoch doesn’t mind a good fight, but he wants to move on,” said one top Fox executive.

Mechanic’s troubles came to a head with last weekend’s dismal opening of his pet project “Titan A.E.,” an $80-million-plus sci-fi animated film that debuted with less than $10 million at the box office. The film is expected to lose tens of millions of dollars.

Fox executives suspected something was up this week when Mechanic was a no-show at Wednesday’s long-scheduled meeting of top News Corp. and Fox executives. The night before, he skipped a dinner of top executives and News Corp. board members at Murdoch’s Beverly Hills home because of a family conflict.

Mechanic no doubt also took the heat for Fox’s once aggressive push into animation, which didn’t pan out as expected. Fox had hoped to rival Disney and cash in on the lucrative animation business. Fox pulled back earlier this year, laying off 100 workers, about a third of its staff, at its Fox Animation Studios in Phoenix.