It may have been a sign of things to come, or maybe it was just a fashion statement.
But recently, Robert W. Pittman, Century 21’s new chief executive, firmly but politely declined to don the company’s trademark gold coat during his first visit to the firm’s gleaming Irvine headquarters.
“I like this jacket I have on,” said Pittman, dressed more for a power lunch in Beverly Hills than a walk through a hallway festooned with photos of gold-jacketed real estate agents.
An entertainment whiz who shook up cable television by creating MTV, Pittman intends to push the real estate brokerage firm, with 6,000 offices worldwide, boldly into the 21st Century.
Through MTV, VH-1, Nick at Nite and the other Pittman creations, television got a big dose of youth culture and energy. Now, real estate may be poised for a similar revitalization when Pittman, 41, takes over Century 21 on Nov. 1.
“They are going to create a whirlwind,” said Sanford R. Goodkin, a real estate consultant in La Jolla. “We are going to see more high-tech products, more visuals offered to the consumer. With what this new CEO promises--it’s sensational.”
Pittman wants to change the way Americans buy homes. He plans to create one-stop shops where customers can purchase a home and within minutes get a mortgage, and he wants to build on an already strong brand name by adding luster to the company’s straight-out-of-the-1970s gold-and-brown logo and image.
One of his first steps will be to move the company founded 24 years ago by two Orange County realtors to New Jersey, where Century 21’s new owners are headquartered.
“I pride myself on the fact that whatever company I run, we move faster and quicker and are the envy of others,” Pittman said in an interview last week.
“We want Century 21 to be very entrepreneurial, flexible and with active dissent. As [former Time Warner Chairman] Steve Ross always used to say, ‘In this company, you’ll be fired for not making mistakes.’ ”
Still, with little experience in real estate, some wonder how Pittman will fare in his new arena, especially with some areas of the country, particularly California, still in the real estate doldrums.
Others who say he is more a showman than a producer wonder whether the traditional world of real estate can hold his attention.
Kenneth Agid, a real estate consultant in Irvine, said Pittman could bring the luster back to Century 21 if he can bridge the gap between real estate and entertainment.
“If he tries to make it Disneyland there will be a problem,” Agid said. “There are some important basics of real estate and there’s a reason that certain things are done certain ways. But if he can bring that imagination and new way of looking at things he could turn Century 21 into a leader again.”
Still, Elizabeth Ellison, co-owner of Century 21 Casa Grande in Santa Ana, questioned how much Pittman knows about the daily travails of brokers trying to survive in a sluggish housing market.
“I think he should come out here and work for a day as a broker then see the problems we have,” she said. “But he’s a multimillionaire, right? He probably won’t want to.”
If anything, a look at his track record shows that the high-profile Pittman, who recently posed for Vanity Fair magazine, never shies away from a good challenge.
The Mississippi native and son of a Methodist minister began his career at 15 as a part-time disc jockey.
At 23, Pittman was named a program director at New York’s WNBC-TV. He then turned the radio station into the top-ranked station in the country. In his late 20s, Pittman was battling to get his “crazy idea” for a 24-hour music channel approved by Ross, soon to become a close mentor, at Warner Bros. He succeeded, and MTV became the first profitable basic cable station in the country.
But Pittman is not without his failures. Such ideas as Radio Lisa, a 24-hour heavy-metal radio network, never really caught on. He ran Quantum Media, a firm that produced such TV shows as “The Morton Downey Jr. Show,” but it closed down in 1989, its assets bought by Time Warner.
At Time Warner, Pittman became executive of the Six Flags Theme Parks Inc. division. There he oversaw development of a new water park called Hurricane Harbor in Valencia near Magic Mountain, and created new entertainment-driven attractions like the Batman ride.
Earlier this year, Pittman announced he would leave Six Flags following Time Warner’s sale of a 51% interest in the theme park to an investor group. Pittman, who was expected to remain with the business and was instrumental in the sale, left when the two parties could not agree on the size of his stake in the new venture, analysts said.
“Something went wrong with the deal--maybe it was just an agreement to disagree,” said David S. Leibowitz, a managing director with Burnham Securities in New York. “But Pittman did a very fine job at Six Flags and deserves all the credit for building it up.”
Pittman said he looked at various opportunities, including the entertainment industry, but Century 21 made the best offer.
With close friends such as Rolling Stone Publisher Jann S. Wenner, Pittman and his wife, Sandy Pittman, a mountain climber, run in elite social circles, including visiting with Vice President Al Gore and attending other events that get the couple mentioned in gossip columns.
A Democrat and supporter of President Clinton, Pittman was chairman of the New York Shakespeare Festival for many years. He and his wife, who live in Connecticut, have a son, Bo, who is 12.
With his host of society friends and his glitzy entertainment background, some wondered why he would take a job with such a meat-and-potatoes company like Century 21, far removed from the glamour of entertainment.
But Pittman said he was looking for something different.
“People say, ‘My god, he’s had glamorous jobs, he must worship glamour,’ ” said Pittman. “But my close friends know I was only in it for the challenge. They knew I was going to do something weird.”
For clues as to what may happen to Century 21 under Pittman, analysts say look to what its new owner, Hospitality Franchise Systems Inc. of Parsippany, N.J., has done in the lodging industry.
Hospitality bought Century 21 from Metropolitan Life Insurance Co. of New York for $200 million in cash and stock in early June and later sold a 12.5% stake to Pittman and two associates. He would not discuss details of the private purchase.
Once a fragmented business, various pieces of the lodging industry came together under Hospitality’s roof. The company franchises Days Inn, Ramada, Howard Johnson, Super 8 and other hotels. While it doesn’t own or operate the hotels, the company provides its hotel operators with various services, such as advertising campaigns and reservation systems.
Now, with a wave of consolidation about to hit the real estate industry, Pittman is expected to increase Century 21’s already significant presence throughout the world through acquisitions.
“For Century 21, regardless of whether home sales are going up or down, we’ll be gaining market share,” Pittman said. “The small independents will be losing.”
Noting Pittman’s reputation as a “brand builder” extraordinaire, real estate analysts agreed with the strategy.
“Consolidation is the name of the game in the real estate industry these days and I think the way they are positioning themselves with this new CEO is sensational,” said Goodkin, the real estate consultant. “The competitors are going to say, ‘What are they doing?’ ”
Chandler Barton, president and chief executive of Coldwell Banker Corp., a real estate company with more than 2,400 offices worldwide, said he isn’t worried about the competition.
“This young man has been quite successful in all his ventures in the past,” Barton said. “He’ll be bringing valuable marketing skills to 21 and our industry. I think it will be good for all of us.”
Barton, 61, chuckled when asked if he had some advice for his competitor.
“None exactly,” he said. “And if I had any, I think I’d keep it to myself.”
Competitors are watching to see what the brand-building whiz does with Century 21’s current advertising budget of $50 million. Pittman was the television pitchman for Six Flags in a series of commercials, but noted that was a “one-time deal.” He said it would be unlikely for viewers to see him on television in a gold jacket any time soon.
So far Wall Street has responded positively: Hospitality’s stock has jumped $17.75 a share since the purchase to close Friday at $46.50. The price jump has surpassed predictions by analysts, some of whom pegged Century 21 to grow about 10% each year.
“It’s explosive,” Jerry Peterson, a vice president with Denver Investment Advisors, which owns a stake in the company. “The real estate area, in my opinion, hasn’t been really professionally run. It could be run more like a corporation.”
Henry R. Silverman, chairman of Hospitality Franchise agreed, saying that Century 21 needs to be streamlined. He said future acquisitions are planned.
“The company Century 21 has become somewhat bureaucratic, part of being owned by an insurance company,” said Silverman “We need to bring Century 21 back to where it was when it began--very entrepreneurial.”
Silverman said Pittman will bring Hospitality’s corporate culture to Century 21.
“This industry is going to see consolidation driven by technology and, if I could have developed a template of a person to head the company, Bob would be it,” Silverman said. “Century 21 is in the sales and marketing business and I don’t know anyone who sells or markets better than Bob.”
But some analysts say it is too early to tell.
Pittman is “a sexy name, but who knows yet,” said one analyst, who did not want to be named. “They are going to do some interesting things with the company--and Pittman could be the one to do it. It’s too early.”
In a recent report, Peter Oakes, an analyst with Merrill Lynch & Co., said Hospitality has developed a “cookbook for improving the financial performance of an acquired brand,” and the purchase of Century 21 was the right move.
Oakes predicted that Hospitality would tap directly into the Century 21 franchises and provide enhanced services, such as new technology and advertising. Also, the company will work to match home buyers and sellers with other real estate vendors, such as mortgage providers, moving companies, life insurers and security systems firms.
“It certainly looks like there is a lot of potential here,” Oakes said. “So far, we agree with what the company is doing.”
One thing Pittman, who has been meeting Century 21 brokers throughout the nation, said he will improve are relations between the company and its brokers.
He scoffed at predictions that Americans will soon be buying homes through computers and avoid using brokers.
“The bigger a purchase someone makes, the more they want a person in the transaction; they want to see their face,” Pittman said. “I just don’t believe people are going to click a mouse and buy a home.”
At the company’s headquarters two weeks ago, Pittman met with key executives, but several employees said the atmosphere was tense, with workers concerned about future layoffs or corporate relocation.
Last Tuesday, the company’s new chairman, John Snodgrass, told nearly 200 workers that Century 21 would be moving to New Jersey. He said it was unclear how many workers would be asked to relocate.
Silverman said it is always hard to revamp a company.
“Any time you try to change or fix a culture, there’s a lot of pain involved,” Silverman said. “It requires people to work very hard and to make changes.”
And the gold coats? Pittman said: “I have no idea. They are on my list.”