Time Inc. Promotes Nicholas to Key Post

Time Inc., struggling to rein in costs, announced a management shuffle on Wednesday that will make Nicholas J. Nicholas Jr., a 46-year-old financial whiz who now heads its video division, president and chief operating officer on Sept. 1.

In a three-way management shift, President and Chief Executive J. Richard Munro, 55, will remain chief executive and will add the chairman’s title. The current chairman, Ralph P. Davidson, 58, meanwhile, will become chairman of the executive committee.

The promotion appears to give Nicholas a clear edge on two rival executives, Kelso F. Sutton and Gerald M. Levin, to succeed Munro if he retires as planned in 1991 on his 60th birthday, observers said. Sutton heads Time’s magazine group, while Levin runs the book and information services and the corporate development units.

In a statement, Munro said the need to create the position of chief operating officer “has become apparent as the pace of our business activity has increased.” The heads of each of the divisions will report to Nicholas, who will in turn report to Munro, he said. Nicholas’ video group includes the company’s Home Box Office pay-TV unit and its American Television & Communications, the second-largest cable-TV operator with 2.7 million subscribers.

Nicholas has distinguished himself as a financial fix-it man. He has several times been dispatched to straighten out troubled Time units. In 1976, he ousted almost every manager at HBO in an effort to make the young operation profitable. He will assume his new role as Time seeks to hold down costs in the face of slower growth in both its video and publishing operations. Last October, New York-based Time began a program of work force reductions and other expense cuts aimed at reducing annual costs by $75 million, or about 2.5%.

“He knows how to maintain good financial controls, and this is a time when the company is increasingly oriented toward those kinds of concerns,” said Christopher M. Byron, author of “The Fanciest Dive,” which details the failure in 1983 of Time’s much-heralded cable magazine, TV-Cable Week. Byron said Nicholas’ selection was “not surprising,” a view shared by several financial analysts who follow the company.

Nicholas said in an interview that the promotions will not mean any “substantive change in direction” at Time. Munro “will still be No. 1, and we’ll continue to go in the direction that he’s mapped out, particularly in the past year,” he said.

Nicholas, who holds an MBA from Harvard, began at Time in 1964 in the controller’s department. Over the years, he has served as president and chief executive of Time’s Manhattan Cable Television Co., chairman and chief executive of HBO, and as Time’s chief financial officer.