E! Acting President Plans to Step Down, Become Consultant

In the second top management shuffle at the cable channel in a year, Fran Shea, the acting president of E! Entertainment Television Networks, said Wednesday that she will not take the job permanently and will step down when the company finds a successor.

Shea, who will become an exclusive consultant to E! under a two-year contract once a replacement is found, reluctantly took over as acting president in January when Lee Masters, president and chief executive of the Los Angeles-based cable channel, resigned after 10 years on the job.

Masters, who is credited with building E! into a profitable cable network worth more than $1 billion, is now the head of Liberty Digital, the interactive television and Internet arm of Liberty Media Corp. He left E! with an estimated $20 million after his stock options vested in December.

Shea, 41, senior vice president of programming under Masters, said she took the job in part because the channel’s controlling shareholder, Comcast Corp., agreed to let her “do it my way”--working mostly from home to allow her to take care of her newborn baby, her first child.

But sources close to the company said the arrangement has made it difficult to schedule meetings and run the business, and Shea agreed that her divided priorities were part of her decision.

“E! needs a leader with more of a time commitment than I can give it,” Shea said.

Shea said she also took on the role to provide stability at a time when all of Masters’ top lieutenants were positioned to cash out. All but one of his nine top executives stayed with the channel for nine years and, on Dec. 31, became vested in stock options collectively valued at nearly $19 million.

“When everyone vests on the same day, it’s tough,” Shea said. “They all wanted something, and they wanted an insider to see them through that period. That was the real turning point for E!.”

Indeed, since that time, Shea has reorganized the company, leaving many of Masters’ lieutenants without new challenges.

Six top executives have left, including the chief financial officer and the heads of affiliate sales, marketing, international and E! Online.

Shea said the changes are needed to take E! from a start-up company to one that is positioned for the competitive future that cable faces. Critics, however, say the management turnover has left the company “rudderless.”

Comcast said Shea will spearhead the recruitment of her successor, which is expected to be completed by the end of the year.

E! reaches 60 million cable and satellite subscribers, while its new sister network, Style, reaches 6 million viewers.

Comcast has had a mixed record in managing E! since the cable company took control of the channel in 1997 in partnership with Walt Disney Co.

Although E!’s ratings and income have increased in that time, its reputation as one of the most stable cable channels in the industry has been shaken.

Rich Frank, the former Disney TV executive who formed the Hollywood production company C3 in partnership with Comcast, and was in charge of managing E!, butted heads with Masters and many on his team.

Comcast dissolved C3 shortly before Masters’ departure.