USA Networks’ Other Blunt Barry

Walt Disney Co.’s Michael Eisner doesn’t have one. Neither does Sumner Redstone, the chairman and chief executive of Viacom Inc.

But Barry Diller does. And in naming a forceful executive with visionary tendencies as his No. 2 at USA Networks Inc., Diller is winning applause from management experts for taking an initiative that many other media moguls have not--leaving their entertainment companies vulnerable at the top.

Since Diller last month named Barry Baker president and chief operating officer of his fast-growing cable, broadcasting, Internet and electronic retailing company, some in Hollywood have taken to referring to the USA team as “Barry squared” because of similarities that go beyond their first names.

Baker, 46, is described by television executives with adjectives that could as easily suit his new boss: smart, tough, decisive, demanding, entrepreneurial, opinionated and creative. The two Barrys even share a style that some in Hollywood find offensive: Both can be unflinchingly blunt.

“You don’t leave a meeting wondering what Barry thinks,” said one television executive who has a long history with Baker, a self-made millionaire who built Baltimore-based Sinclair Broadcasting Group into one of the nation’s most influential TV operators before resigning last month and becoming Diller’s No. 2. “If he doesn’t like you or your idea, he tells you. While his gruff approach can ruffle feathers and upset some people, I don’t think he is going to hurt Diller’s feelings.”

Indeed, one executive who knows them both predicts a certain amount of volatility: “It’s Attila the Hun meets Genghis Khan,” he said.

Yet analysts say Baker is just the seasoned hand Diller needs to hone USA after a period of rapid-fire expansion. USA now includes Ticketmaster, the Home Shopping Network, the Sci-Fi Channel, USA Network, TV stations, a TV production arm, the CitySearch online local service guides and some online shopping sites.

Over the last three years, Diller has brought together this disparate clutch of assets with the vision of developing electronic retailing as a third revenue stream as traditional advertising and cable subscription fees come under pressure.

But USA has fallen behind in making some of these assets work, even as Wall Street has bid up USA’s market value to more than $13 billion on the basis of Diller’s visionary talents, not counting a proposed purchase of the Lycos search engine that would take it to more than $18 billion. Diller is credited with building the Fox network for News Corp.’s Rupert Murdoch.

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Sources say the development of programs in-house for both USA’s stations and cable channels has bogged down because of turf wars. The much-heralded CityVision format emphasizing local programming for its TV stations has been such a disappointment that Diller has returned to a conventional mix of sports, movies and network reruns, only to be outbid for the best shows by larger station groups such as Tribune, Fox and Disney’s ABC.

Though Home Shopping is a huge cash generator, it hasn’t flourished in league with rival QVC. James Held was fired earlier this month as chief of the shopping channel.

In addition to getting the divisions to work independently and together, Baker said, his job is to drive the people buying tickets and watching USA’s television stations and cable channels to the Internet shopping mall it is building.

Baker’s arrival also frees Diller to focus on strategy and deal-making. Diller has kicked the tires of the NBC and CBS networks, CBS’ cable holdings and Cablevision Systems Corp.’s national cable channels. Diller has an agreement in principle to acquire Universal Studios’ 51% stake in specialty film distributor October Films as well as the domestic assets of PolyGram Filmed Entertainment. Sources say that within the last two weeks, USA has offered to buy Cablevision’s Bravo channel for a steep $800 million as an outlet for movies and arts programming.

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Rumors have circulated recently about a merger with Sinclair, whose 64 television and 54 radio stations would combine with USA’s 13 TV stations with little overlap. Baker would not comment.

Baker could even buffer Diller’s abrasive style. Though Baker is considered a tough negotiator and boss and is referred to by some on Wall Street as “the Godfather” because of his intimidating, gravelly voice, people who have known him for decades say he is also fun-loving, gregarious, personable and fair-minded.

“People who work for Barry [Baker] go through walls for him,” said Michael Lambert, a Los Angeles station owner and close friend of Baker’s who formed a program-buying cooperative whose station members include Sinclair and at one time also included River City Broadcasting, the radio and TV station group Baker built and sold to Sinclair in 1995 for $1.2 billion.

At River City and Sinclair, where he became chief executive after the merger, Baker is famous for orchestrating lavish and imaginative junkets for advertisers, taking them sailing and on trips to Hong Kong and Greece.

He and his second wife, Amy Bluestein Baker, a former NBC programming executive, host 200 media buyers, 50 at a time, at their ski home in Park City, Utah, every year.

“He is a Clinton-like personality, without the flaws,” said Beverly Harms, Baker’s first boss and now a senior vice president at Communications Equity Associates, an investment banking firm in Tampa, Fla., that backed River City. “When he walks into a room, he has to say hello to everyone.”

Harms, who said Baker is like a son to her and described him as a dedicated husband and father to two children, added, “He’s always looking for the next guy coming into the room--but never in a way that makes people feel slighted.”

Baker had humble beginnings as the grandson of Russian-Jewish immigrants and the son of a Bronx meat cutter and salesman. He ran his own music booking agency as a student at Syracuse University, and upon graduating in 1973 sold cable subscriptions door-to-door and then ran a radio station for Harms’ media company in Syracuse, N.Y.

Harms said Baker’s networking skills are a foundation of his success. She said she never expected to hear from him after he left in 1977 to manage radio start-ups in Houston and St. Louis, and was surprised when he called every few months, keeping in touch through her transition into investment banking and remaining in contact today.

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Baker formed River City in 1989 with the purchase of KDNL-TV in St. Louis from Cox Broadcasting, though his first choice was another St. Louis station, owned by Koplar Communications. Harold Koplar had lured Baker to run his two stations in 1983 but died seven months later. Baker was fired by Koplar’s mistrustful heirs in 1988 after trying to buy the St. Louis station, which he had tripled in value. Though lenders were down on broadcasting because of a looming recession and cable’s promise of 500 channels, Baker and a partner scraped together the $5.5 billion to buy the Cox station and expanded River City over the next six years to 10 television and 24 radio stations.

River City was an early champion of a practice that allowed TV broadcasters to sidestep federal laws barring ownership of more than one station per market. Through local management agreements, River City radio and TV stations operated weaker rivals, enabling them to cut costs by centralizing news gathering, advertising sales and marketing.

Baker also found clever ways to increase revenue by persuading advertisers to draw money from other budgets, such as marketing. He was one of the first group owners to centralize marketing and program buying, cutting costs and debunking the conventional wisdom that what works in Omaha won’t in Tampa.

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If the centralized structure gave River City clout in negotiating programming deals with Hollywood, it gave Sinclair, a family-owned broadcaster, even more. Baker expanded the group from 14 TV stations to 64 TV and 54 radio stations with a reach into 26% of the nation’s households.

Anyone launching a syndicated program requires clearances from Sinclair, whose willingness to use that leverage earned it a reputation in Hollywood as a bully. Sinclair created an uproar recently with demands for payments for carrying programs, spreading a practice previously restricted to New York and Los Angeles.

Said Baker: “Sinclair was a tough place before I got there and became tougher, with a smile, after I came.”

Baker’s charms have endeared him to many in Hollywood. “In the end, Barry makes deals work for everybody--and always finds ways to work with the people who helped him when he was a little guy without any clout,” said Rick Jacobson, the syndication chief for Fox Television. “He’s fun, charismatic and built his success on the strength of his personality. He’s an irresistible force.”