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Executive Shuffle Expected in 2005

Times Staff Writer

There will be a high-stakes game of musical chairs in the media sector this year. When the music stops, who’ll be left without a seat?

Among those who have set dates for their retirement are Walt Disney Co. Chief Executive Michael Eisner, Viacom Inc. CEO Sumner Redstone and Sherry Lansing, chairwoman of Paramount Pictures.

But even companies whose chief executives plan to stay put could be affected by transition-related gamesmanship during the year.

That’s the thing about executive shuffles: With every opening filled, another one is created. That reality -- along with the threat of an actors strike, the rise of satellite radio and the auction of a leading cable TV provider -- will make for an exciting, if chaotic, year in the media business.

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Here are some predictions for 2005, based on interviews with analysts and top industry executives, along with some intuition.

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Disney Flirts With the ‘Smiling Cobra’

Eisner’s imminent retirement from the top job at Disney could set off a chain reaction across entertainment’s upper echelons.

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Leading contenders to replace Eisner are a who’s who of big media No. 2s: Disney President Robert Iger; Time Warner Inc.'s entertainment and networks chief Jeffrey Bewkes; Viacom Co-President Leslie Moonves; and Peter Chernin, president of News Corp.

Executives at News Corp. will continue to buzz about whether CEO Rupert Murdoch will elevate his two sons should Chernin leave the family-controlled conglomerate for the Disney job or some other opportunity.

One scenario has 32-year-old James Murdoch, head of Britain’s leading pay-TV provider, taking over satellite operations worldwide, and Lachlan Murdoch, 33, who already manages News Corp.'s newspapers and TV stations, adding the movie studio, cable channels and the Fox TV network to his list.

Murdoch would inject some creative sizzle by tapping a maverick such as Moonves, who is credited with rebuilding Viacom unit CBS and is currently in a two-man race to succeed Redstone at the parent company. To the extent that his co-president at Viacom, Tom Freston, is perceived to be the apple of Redstone’s eye, insiders say Moonves is open to being wooed if he could get out of his contract.

Meanwhile, Chernin, whose smooth-but-decisive style has earned him the nickname “the Smiling Cobra,” will refuse to be interviewed by Disney’s headhunters because he thinks the board is going through the motions and has already chosen Iger.

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But Inside Man Gets Job

All this will indeed become moot because Iger, the former weatherman who has been president of Disney since 2000, will convince the board that he’s the man best suited to lead.

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Iger’s victory will stem in part from the surprise success of “Desperate Housewives,” the racy prime-time comedy that repaired Disney’s weakest link: ABC.

Iger’s first act as CEO: renewing Disney’s contract with Pixar Animation Studios Inc.

To fill his own shoes as president, Iger will tap Disney’s cable chief, Anne Sweeney, who agreed to take on troubled ABC amid a management shakeup at the network last spring. That, notably, is when Iger fired the executives responsible for developing “Desperate Housewives.”

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Deja Vu All Over Again

When Iger is named, dissident shareholders and former Disney board members Roy E. Disney and Stanley P. Gold will revive their campaign to nominate an alternative board slate. And when Eisner is named chief creative officer, a newly minted title in the entertainment hierarchy that in effect keeps him in power, Disney and Gold’s campaign will shift into hyper-drive.

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Darwinian Death Match

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Succession competitions will become more intense at NBC Universal, News Corp., Time Warner and Viacom.

At Time Warner, the back ailments that plague Donald Logan, who oversees publishing, AOL and cable systems, will give the upper hand to Bewkes, who presides over Warner Bros., TBS, the WB and HBO.

At General Electric Co.'s NBC Universal, the persistently rising star of Jeff Zucker, who heads the broadcaster’s entertainment group, will start to fade.

The TV network will fall further in the ratings, MSNBC will gain no traction in the news wars and CNBC will struggle to fend off the brazen advances of Fox News’ new business channel.

At Viacom, the weakness of the radio business will continue to frustrate Moonves, who will find himself in an increasingly no-win battle with co-President Freston, the former cable chief who is determined to perk up the demoralized Paramount.

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Paramount Insider Out

Freston will ring in the new year by picking an unconventional outsider to succeed Lansing as head of Paramount Pictures. Although many insiders have rooted for Donald DeLine, the production head whom Lansing handpicked to succeed her, Freston will tap his friend, talent manager Brad Grey.

A shrewd dealmaker who has made millions in television -- HBO’s blockbuster “The Sopranos” is among his credits -- Grey has long wanted to transform himself into a movie mogul. He will cash out of the talent business by selling his management firm to an advertising agency looking to increase its influence over programming.

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Never Count Frank Out

Private equity investor Frank Biondi will return to the entertainment industry as chairman of Metro-Goldwyn-Mayer. It’ll be a cakewalk for this former chief executive of Viacom and Universal Studios, who will spend most of his time looking after the financial interests of the private equity firms that financed the Sony Corp.-backed acquisition. That’ll leave plenty of time for him to work on his backhand.

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Tokyo’s Quiet Retreat

Sony Corp. of America chief Howard Stringer will lay the groundwork to spin off the consumer electronics giant’s bulked-up entertainment holdings. An initial public offering will include Sony Pictures Entertainment, the group’s newly acquired stake in MGM and the recently merged music company Sony BMG. The IPO will be welcome news to the equity partners in MGM -- as well as to Bertelsmann, the German owner of BMG -- who eventually plan to cash out. Moreover, Stringer’s move will set the stage for Tokyo-based Sony Corp. to make a graceful exit from Hollywood.

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Musically Inclined

Former songwriter and Universal Chairman Edgar Bronfman Jr. will take Warner Music Group public. Then, he’ll try to take over EMI, leaving the industry with only three major music companies.

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Mel’s Hell

Mel Karmazin, the new chief of Sirius Satellite Radio Inc., will seek a merger with XM Satellite Radio Holdings Inc., but he will be rebuffed for setting too high a price.

At the same time, Infinity Broadcasting will refuse to give its longtime talk-jock Howard Stern an early exit from his contract, which expires at year’s end. Sirius, which has signed him to a lucrative five-year deal, will have to wait while its stock price slides.

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Cable Hijinks

In a joint bid, Time Warner and Comcast Corp. will trump private equity investors to buy Adelphia Communications Corp. out of bankruptcy protection. Time Warner will become the cable leader in Los Angeles and the nation’s second-largest pay-TV provider after Comcast, catapulting over DirecTV Group Inc. and EchoStar Communications Corp. The deal will spark a series of cable subscriber swaps, fortifying the industry to do battle with regional phone giants that are entering the pay-TV business.

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Murdoch Strikes Again

The irascible 73-year-old Australian will remake the economics of the broadcast business by charging cable operators cold, hard cash for the right to transmit the signals of his Fox TV stations. Traditionally, broadcast networks have exchanged those rights for distribution of their cable channels. But Murdoch will use his muscle as the nation’s largest TV station owner to get what he wants: the dual revenue streams that cable channels have long enjoyed.

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Solidarity Forever

Actors and studios will avert a strike and work slowdown by agreeing early in the year on a new contract that bolsters actors’ health plans and boosts their pay. Studios again will avoid having to give up a bigger share of their DVD revenue.

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Maxed Out

Miramax co-founders Harvey and Bob Weinstein, who named their company after their parents Miriam and Max, will leave Disney and set up a new company named after themselves.


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