2 NBC Suitors: A Rare Breed of ‘90s Mogul

When the government forced the major studios out of the movie theater business in the 1940s and the major television networks out of the program production business in the 1970s, who would have guessed that entertainment moguls would wind up consolidating more power than ever in the 1990s?

Time Warner Chairman Gerald M. Levin and Walt Disney Co. Chairman Michael D. Eisner already rule over kingdoms bigger than their autocratic predecessors could have imagined. Now, with talk that one may acquire General Electric’s NBC, there’s the chance to add the penetrating reach of a network to a collection of assets that includes film, TV, cable, music, theme parks, exhibition, publishing and video.

It’s a measure of changing attitudes that no one’s screaming bloody murder over their latest skyscraper-sized vertical integration moves. Most people assume that Time Warner, as a cable operator, can clear the regulatory hurdles standing in the way of an NBC deal. And Disney’s path is even less cluttered, because it’s not in the cable hardware business. As NBC discussions continue against the restless and competitive backdrop of the new-media world, the role of the mogul is in rapid transition.

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At the very height of his power, Metro-Goldwyn-Mayer Chairman Louis B. Mayer dominated only one medium--movies. Time Inc.’s Henry Luce had only publishing. Others added a few more pieces. Legendary CBS Chairman William S. Paley ran CBS TV, Radio and Records, and Gen. David Sarnoff linked the programming of his NBC network to the manufacturing of radios and TVs through RCA.

Those titans exercised power more visibly and forcefully, often because they were owners. They also operated in a less-crowded media environment, at the dawn of the modern communications era. But in today’s fragmented world--where movies compete with network TV, which competes with cable, which competes with video games, which compete with music--Levin and Eisner are among the rare breed of executives with full reach.

As a music manufacturer, Time Warner sold a staggering 300 million CDs and cassettes worldwide last year by artists as varied as Eric Clapton, Naughty by Nature, Enya and George Gershwin.

On top of that, Levin’s Time Warner controls 20% of domestic magazine advertising revenue with perennials such as Time, People and Sports Illustrated; 14.6% of the domestic box office with movies such as “Natural Born Killers” and “Maverick”; 8.5 hours of prime-time network programming with popular shows such as “Murphy Brown” and “Full House”; the influential pay channel HBO; Six Flags theme parks; a piece of Ted Turner’s Cable News Network, and about 9 million cable subscribers.

Eisner’s business is more purely entertainment-based but no less omnipresent. It’s possible for a child to go to bed in Disney’s “Aladdin” pajamas, wake up and watch the Disney Channel’s “Gummi Bears,” eat a Mickey Mouse-shaped waffle for breakfast, pack a Donald Duck lunch box for school, dress in a Disney Mighty Ducks T-shirt, spend the afternoon watching a package of syndicated Disney cartoons or listening to the best-selling “The Lion King” soundtrack, then drift off to sleep with a Disney storybook like “Pinocchio.”

More than 78 million movie tickets have already been sold to “The Lion King.” About 15.5 million homes regularly tune in to the Disney-produced “Home Improvement.” And even though the business is flat, 39 million people still visited Disney’s domestic theme parks last year.

Eisner has a higher profile than Levin so far, because he’s been on the job longer and has taken over Uncle Walt’s folksy role as Disney spokesman. They also have diametrically different personalities--with Eisner seeming the polished and uncomplicated leader of a pop culture kingdom and Levin so introverted and studious that he often seems to fade out of group photographs. But both have put strong personal stamps on their companies, even if they’ve done it more subtly than moguls like Mayer, Paley, Luce and Sarnoff.

Levin, 55, is a former biblical literature student and lawyer who came up through the cable ranks at Time Warner. It was because of his civil-libertarian stance, however short-lived, that the controversy over rapper Ice T’s “Cop Killer” song raged as long as it did last year. Levin’s also more attuned to the high-tech world of new media than his predecessor, Steve Ross.

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Disney, on the other hand, is a reflection of Eisner’s colonization mentality, which has the company expanding everything from theme park locations to retail outlets. Much of what Disney produces is also the result of the middle-brow tastes of Eisner, 52, who put in time at all three major networks and Paramount before going to Disney. He was an early champion of movies such as “Down and Out in Beverly Hills,” genuinely views theme parks as a place to have a rollicking good time and is said to be a major Chevy Chase fan.

A broadcast network would add immeasurably to those power bases. Even though cable has cut into their business, the major networks still provide the biggest direct line into American homes, with an average 9 million viewers per prime-time program. A network can also be used as a place to run studio-produced TV shows and movies, enter the news business, link up with new advertisers and devise cross-promotions too numerous to imagine.

And the road to empire building doesn’t end at NBC’s Rockefeller Center. It’s widely assumed that CBS and Capital Cities/ABC will be sold or partnered with other entertainment conglomerates before the dust clears in the stampede by companies to position themselves for the new-media age. Eisner could someday stage an entire Chevy Chase festival. And Levin could do wonders for Ice T’s career.

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It’s a small world, after all: Hollywood’s executive pool is so limited that people invariably cross paths more often than ants. Take the case of Tom McGrath, who was just named executive vice president of Viacom Entertainment Group, which includes Paramount Pictures.

McGrath headed producer Norman Lear’s Act III Communications before a bitter falling-out in 1990. He moved on to Time Warner, and Lear continued on with his own company. Now Lear is negotiating a TV production deal at Paramount--just as McGrath assumes a senior management position at the company. Sources say there will be no impact on Lear’s deal.

The Changing Face of Media Titans

Legendary CBS Chairman William S. Paley, left, ran CBS TV, Radio and Records. Walt Disney Co. Chairman Michael D. Eisner and Time Warner Chairman Gerald M. Levin now rule over kingdoms bigger than their autocratic predecessors could have imagined.

PAST

William S. Paley

PRESENT

Michael D. Eisner

Gerald M. Levin