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Company Town : Is Tisch Ready to Let Go of the Reins?

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Whether or not CBS winds up being sold during the current wave of network mania, media sources say Chairman Laurence A. Tisch is in the market for fresh leadership.

People close to CBS report that Tisch recently put out a feeler to Jeffrey Katzenberg, the outgoing chairman of Walt Disney Studios. According to those sources, the overture included day-to-day control of the network and the opportunity to expand its entertainment holdings.

CBS declined to comment. A spokesman said Katzenberg also had no comment and that his only immediate plan is to spend time with his family. Other industry sources acknowledged the Tisch talks but said that running CBS is just one of many job opportunities that Katzenberg, who once tried to persuade Disney to buy a network, plans to consider in the coming months.

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Hollywood executives take the Katzenberg overture and other recent events at CBS as signs that Tisch is anxious to hand over the reins of power one way or another. Insiders say the network has been adrift since its planned merger with QVC, the home shopping network headed by Barry Diller, fell apart in July.

While the prospect of the volatile Diller becoming chief executive of the Tiffany Network made some executives uneasy, it also temporarily boosted morale after years of absentee stewardship. Tisch, who briefly became engaged in the network, is now described as once again “detached.”

“The company’s quite weird right now,” said one senior CBS executive on Monday. “It’s like waiting for Godot.”

Tisch, 71, took control of CBS in 1986. In the wake of the failed QVC deal, he said the network was not for sale. Even so, many CBS insiders anticipated that Diller would return to the table with fresh financial backing, or that Walt Disney Co. Chairman Michael D. Eisner would make a bid.

Instead, the focus has shifted to General Electric’s NBC unit, which is said to be fielding interest from Disney, Time Warner, Turner Broadcasting System and ITT.

One top source insists that Tisch is still ready to sell at the caviar price of $400 a share. “What he doesn’t want to do is give up his influence,” the source said.

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But another says Tisch is tired of the day-to-day grind, adding: “Larry Tisch is not a seller. All these rumors about CBS being sold are not true. He’s looking for CBS to be better run and better managed.”

Katzenberg is said to be Tisch’s choice for the job because of the skill he demonstrated in building Disney into a Hollywood dynamo during his 10 years at the studio. Sources say they’re unaware of other candidates being contacted by Tisch.

Any executive of Katzenberg’s caliber would probably join CBS only with the understanding that bigger things are in store for the company--perhaps an alliance with a studio or cable company. While there are few jobs as heady as being chief executive of a network, in the era of mega-media conglomerates CBS has shrunk to one of the smallest around.

Once a broad-based entertainment and media giant with interests that spanned records, magazines and book publishing, CBS has been pared back by Tisch to its core business: a television network, seven company-owned TV stations and radio. Unlike Capital Cities/ABC and NBC, Tisch has refused to diversify into cable.

But Wall Street’s fervor for major networks remains high. CBS shares reached a record high of $361 during trading Monday on the New York Stock Exchange before closing $3.375 lower at $353.125 in profit taking. The stock has zoomed from a low of $253.25 earlier this year.

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If Florida voters approve a gaming initiative in November, don’t look for Walt Disney Co. at the dealers’ table. The company sees no upside to hordes of gamblers descending on the Sunshine State--even though Disney World in Orlando suffers from flat domestic tourism and a drop-off in international visitors.

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“They continue to have a fairly negative bias toward gaming,” said Jill Krutick, an analyst for Smith Barney. “They feel the Disney culture doesn’t mix with gaming.”

Disney in the past has vocally campaigned against Florida gambling. This year its stance is more low-key, but Krutick says the company could still come out a winner in the casino sweepstakes.

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In a recent report, she notes that Las Vegas-style gaming might revive Florida’s international tourism trade, following a series of attacks on visitors to the Miami area. Casinos would also bring a major capital investment to the Florida region, which could increase overall spending.

On the downside for Disney is the likelihood that gaming would cut into the amount of time visitors spend at theme parks. Krutick says casinos would also draw such non-theme-park-goers as adults without children.

Analysts estimate that operators could realize $5 billion in profits annually from Florida gaming. But it remains a controversial issue. A survey by the Florida Opinion Poll found that 50% of the 553 voters interviewed opposed a casino in their county. There was a margin of error of plus or minus four percentage points.

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