When Chase Carey was leading negotiations for the fledgling Fox network in the early 1990s, he went to his boss, Rupert Murdoch, with a spreadsheet showing the kinds of money TV networks were spending for football rights at the time.
Scanning the document, Mr. Murdoch asked Mr. Carey, "Where's the bid we are going to make?" according to a person familiar with the matter. Mr. Carey informed him Fox's bid, $ 1.58 billion, was so much higher than the others it wouldn't even fit on the page.
Betting big on football, a strategy that reaped dividends for Fox in the ensuing years, is one of the marks Mr. Carey has left on the company over a nearly three-decade career there.
Mr. Carey, 61 years old, will step down as chief operating officer as part of a leadership transition at Fox that goes into effect July 1, the company said Tuesday. Mr. Murdoch will hand the CEO title to his younger son James, 42, but will stay on as executive chairman. Meanwhile, Mr. Murdoch's older son, Lachlan, 43, will be elevated from nonexecutive co-chairman to executive co-chairman.
Mr. Carey will stick around for a year as executive vice chairman, a largely advisory role.
Mr. Carey, famous for his handlebar mustache and love of sports so fanatical he has seats from the old Yankee Stadium installed in his midtown office, has been the elder Mr. Murdoch's right-hand man over the years. He has also been Fox's chief deal-maker, prime negotiator in battles with pay-TV giants, and ambassador to Wall Street.
One Fox executive credited Mr. Carey, a former college rugby player, with a "take-no-prisoners" negotiating style. On his watch, Fox built its cable unit into a profit engine that throws off the bulk of the company's profit. Fox leads its peers in the rate of growth of carriage fees it collects from pay-TV operators, according to an analysis by Nomura analyst Anthony DiClemente.
But the company is potentially vulnerable as young people eschew big cable bills for cheaper online options. Mr. Carey recently acknowledged on an earnings call that the pay-TV bundle was "fraying." Fox also has big decisions to make in digital strategy—for example, whether to join peers like CBS Corp. and Time Warner Inc.'s HBO in directly courting "cord cutters" by offering channels over the Web.
Investors have viewed Mr. Carey as a disciplined operator. He was one of the key voices who advocated that Mr. Murdoch split up his media empire in 2013, according to people familiar with the matter. The faster-growing entertainment assets went to 21st Century Fox, while the publishing assets, which include The Wall Street Journal, went to News Corp.
"He was a strong voice in what has essentially been a family business," said Chris Marangi, portfolio manager at Gabelli Funds, a Fox investor.
Mr. Carey has said he wanted to mentor the next generation of talent at Fox. In recent years, he has brought James and Lachlan along to negotiations with everyone from distributors to sports leagues, according to people familiar with the matter.
Under the leadership transition, Mr. Carey's direct reports will report jointly to James and Lachlan Murdoch.
The transition could prove tricky in some corners. Fox News Chairman Roger Ailes, who has reported to the elder Mr. Murdoch, will report to his sons, the company said Tuesday. Mr. Ailes and people close to Fox had said last week that he would continue to report to the elder Mr. Murdoch.
Jeffrey Sonnenfeld, senior associate dean at the Yale School of Management and an expert on CEO succession, said executing handoffs of authority like the one in the Murdoch family is always a challenge.
"When family businesses try power balancing, it's pretty inelegant," he said. "Somebody is going to win out."
Mr. Carey joined the company in 1988 and served as chairman and CEO of Fox Television from 1994 to 2000. The Fox-NFL deal, struck when Fox consisted of just a handful of stations, helped catapult the company into a major player.
Mr. Carey "understood the value of sports and recognized what it cost to acquire them," said National Football League Commissioner Roger Goodell, who was himself a young executive at the NFL at the time of the 1993 deal.
Mr. Carey led the company's expansion into the cable business, launching FX, Fox News and the National Geographic channel during this tenure as Fox Television chairman.
When trying to get Fox News off the ground in 1996, he came up with the idea to offer pay-TV operators $ 10 per subscriber to get them to distribute the channel.
"No one had ever heard of that, and of course it seemed like more money than you would ever be able to spend in fees," said Comcast CEO Brian Roberts. "Chase is the one who got Fox News into every home. It changed history."
From 2003 to 2009, Mr. Carey was CEO of DirecTV. In that role, Mr. Carey got a taste for just how badly pay-TV operators needed content, knowledge he put to use when he returned to the company in 2009 as chief operating officer.
"When he sits across the negotiating table from the cable companies, he has a great understanding for what they can pay," Mr. DiClemente said.
Write to Keach Hagey at keach.hagey@wsj.com
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