‘Queen of E!’ May See Early End to Hollywood Story

Entertainment executive Mindy Herman seems a ripe subject these days for her cable channel’s own trademark show, “E! True Hollywood Story.”

As soon as today, Herman’s four-year reign as chief executive of E! Networks could come to an abrupt but lucrative end, according to well-placed sources. Among other things, she has been accused of abusing her power and behaving in decidedly undignified ways, including brawling in the parking lot of a Hollywood burlesque club.

Although Herman has raised the profile and profitability of the celebrity-driven channel, she also has accumulated numerous detractors among rank-and-file employees, who complained that she created a fearful climate through firings and heavy- handed management.

An E! spokeswoman said Herman, 42, has acted appropriately throughout her tenure. Sources said Comcast Corp. and Walt Disney Co., co-owners of E! Networks, had signed off on a $20-million severance package. Her departure would not occur until she approves of the terms, expected to be presented to her today. The two media giants declined to comment on why Herman might be leaving six months before her contract expires.

Hollywood executives have long been known to be among the most coddled in the business world, often expecting to be treated like stars themselves. In Herman’s case, however, more than a dozen sources in and out of the channel said she craved pampering to an extreme and, on occasion, used company resources to facilitate her aspirations.

Herman’s potential undoing resulted in part from two anonymous letters sent to Disney and Comcast last fall, prompting an investigation and a subsequent audit. Comcast declined to comment on the investigation, and Disney said Wednesday that as a minority partner in the company it did not have authority over personnel, programming and day-to-day operations.

One of the letters, a copy of which was obtained by The Times, had a pleading tone. “It is desperation time here at E!” it said. “I pray that you will not turn a deaf ear.”

The letter described two lavish baby showers it claimed that Herman threw for herself last fall at company expense. One, held at E!’s headquarters on Wilshire Boulevard, was “the single most expensive company party ever,” according to the letter.

Sources said e-mails distributed at work by Herman’s colleagues regularly informed employees about the details of Herman’s baby registry and where to bring gifts.

“Everyone knew the implications of the e-mail -- buy her something nice or risk losing your job,” stated the anonymous letter. “So we all spent money we didn’t have to appease her.”

The other baby shower was convened for about 30 friends and family members at the upscale Geoffrey’s restaurant, located on a Malibu bluff.

A spokeswoman for E! said Herman reimbursed the company nearly $8,000 for the office shower after learning of the anonymous complaint. The spokeswoman said Herman’s friends paid for the Geoffrey’s event.

The anonymous writer also questioned the appropriateness of Herman making herself the recipient of an expensive room remodeling on the E! show “Guess Who’s Coming to Decorate.”

The program’s concept is to surprise a homeowner with a $2,000 face-lift for a room in his or her home, a project orchestrated by an old friend. Herman, who appeared in the show that aired in January, had a bedroom in her Malibu home transformed into a nursery for her newborn. It was decorated in an underwater motif, with fabric sea creatures attached to the wall with Velcro, a lampshade that looked like an amoeba and a new crib.

The show’s host described Herman as “a media mogul,” “bigwig” and “one of the most powerful women in Hollywood.”

Herman’s decorating requests, sources said, pushed the cost thousands of dollars beyond the $2,000 budget.

An E! spokeswoman said Comcast had approved the show.

The anonymous letter also discussed an E! party for the premiere of the channel’s “The Anna Nicole Show” at a Hollywood burlesque club, 40 Deuce. According to multiple witnesses interviewed by The Times, Herman became engaged in “hand-to-hand combat” in the parking lot with another woman. The witnesses said they did not know what prompted the fight.

The witnesses and other former and current employees of E! Networks spoke only on the condition that they remain anonymous. Some of the employees who were let go signed agreements that they would not speak badly of the channel or its management as part of their severance packages. Others, still employed by E!, said they feared their jobs would be in danger.

Herman took the helm of E! in 2000 and by all accounts promptly brought a new focus and intensity to the channel, which was long known for a collegial, easygoing work environment.

Among other things, she stepped up the daily dose of tabloid-style celebrity news and gossip by launching programs such as “Celebrities Uncensored.” Herman also expanded the reach of its sister channel, Style, from 6 million subscribers to more than 40 million.

The value of E! and Style together has jumped to about $4 billion today from about $1.9 billion in 1999, company sources say. Herman’s contract provides for an exit package based on the company’s increase in value during her tenure.

“Mindy has done an amazing job,” said comedian Joan Rivers, an on-air host at E! since 1996. “E! was a little channel when she came in and now it’s all around the world. They know me in Australia, New Zealand, the U.K. She is fantastic.”

The channel was originally launched in 1987 as Movietime, focusing chiefly on upcoming films. By 1990, it expanded its scope to celebrity-driven entertainment of all sorts and relaunched itself as E!

The channel hit pay dirt in 1991 with “Talk Soup,” a program that mocked such talk shows of the day as “Sally Jessy Raphael.” The program won an Emmy in 1994 and was a springboard for several stars, including its first host, Greg Kinnear.

“Talk Soup” was soon flanked by other hits. Most notable was a docudrama on the behind-the-scenes foibles of celebrities, “The E! True Hollywood Story,” which debuted in 1996 and is still the channel’s highest-rated series.

Along the way, talent such as Rivers and entertainment reporter Steve Kmetko became well known in America’s living rooms, working the red carpets at the Oscar, Emmy and Grammy awards shows.

Herman, who earned MBA and law degrees from UCLA, cut her teeth in the entertainment industry at News Corp., where she worked in business affairs starting in 1990. Her first taste of cable came three years later, when she helped launch FX, a general entertainment channel that marked News Corp.’s entry into the U.S. pay TV arena.

Her appointment at E! took many in Hollywood by surprise. Although Herman is viewed by many as smart and tenacious, her expertise was in cable deal making. She had never run a creative enterprise and lacked entertainment connections.

“When Mindy went to E!, she really had to transform herself ... because as a lawyer, she had been very much in the background,” said Sandy Grushow, the former chairman of Fox Television Entertainment Group. “She is Hollywood’s ultimate makeover.”

Some in the cable industry barely recognized Herman after she began to don a stylish haircut, makeup and hip clothes, including patent leather go-go boots. E! insiders claim that much of that makeover was courtesy of the channel’s wardrobe, hair and makeup departments -- not uncommon in Hollywood.

Critics say Herman seemed to get swept up in her own sense of celebrity. They said she had a particular fondness for the gift baskets given to stars who participate in awards shows.

Two years ago, according to E! sources, Herman’s representatives intercepted a Grammy gift bag that had been sent to the channel for reporters Kmetko and Jules Asner, who had done a news segment on the baskets. The booty, worth several thousand dollars, included a Tumi suitcase, an Apple iPod, a weekend at an Ian Schrager hotel as well as a membership and 10 massages at the SportsClub LA in Westwood.

Neither Asner nor Kmetko would comment. Lash Fary of Distinctive Assets, which prepared the basket, said he vaguely recalled sending replacement goodies when the gift was not received by the anchors.

Kmetko, the popular on-air news anchor whom many credit with putting E! on the map, no longer works at the channel. He was fired by Herman in 2002. Although many longtime executives had been dismissed as Herman retooled the channel’s upper management, his ouster hit the troops particularly hard.

According to E! sources, the firing occurred after Herman was flooded with e-mails praising Kmetko. Suspicious, Herman asked Kmetko whether he orchestrated the onslaught, and he denied it. Still not satisfied, Herman ordered the company’s computer experts to sift through his e-mail, where she found an exchange between Kmetko and a webmaster who ran an Internet site for Kmetko fans, encouraging the e-mail campaign.

Kmetko, who had been worried that his contract would not be renewed, was fired two days before the Emmy awards, where he was scheduled to work the red carpet. He later told one E! executive that Herman admonished him: “You never lie to the queen of E!”

Kmetko later filed a discrimination complaint with the California Office of Fair Employment, according to his lawyer, Martin Singer. In the complaint Kmetko, who sources said was having difficulty collecting from E! for the time remaining on his contract, accused the channel of giving preferential treatment to friends of top management who worked at the channel.

Kmetko would not discuss E! because a subsequent settlement agreement with the network precludes him from doing so, Singer said.

Perhaps the beginning of the end for Herman’s tenure occurred in the wake of the Sept. 11 terrorist attacks. At the time, E! had about 70 employees in New York, many covering Fashion Week for the Style channel. Workers were in shock and frightened for their safety.

Many were young adults “who had never been on a trip before and suddenly the world was falling around them,” said one executive who was there.

Back in Los Angeles, E! employees were working around the clock to book cars, buses and planes for their stranded colleagues in New York.

Herman and other top E! executives gathered at the Iroquois Hotel in Midtown Manhattan and assured those present that everyone would stick together until employees had secured transportation home.

The following day, word leaked out that Herman had left the group, heading to Philadelphia in a rental car to catch Comcast’s corporate jet back to Los Angeles. An E! spokeswoman said Herman went there to organize travel arrangements for the rest of the group.

But executives and employees left in New York dispute that. They were furious, feeling abandoned and betrayed. Many of the remaining employees finally took a cross-country bus trip that lasted four days.

Said one E! employee: “Everyone pretty much disengaged from Mindy after that.”