Opportunity Already Knocks
What does a media mogul do for a second act?
That’s what ousted Viacom Inc. Chief Executive Tom Freston was trying to figure out Wednesday. The man who built MTV Networks into a global phenomenon began pondering his next move, not ready to retire with his millions at age 60.
Join NBC Universal? Take a seat on the board of News Corp.?
Team with an investment group on the prowl for a media target?
“I want to get back in,” Freston said in his first interview since being fired Tuesday. “I’m open to anything.”
He may have many opportunities. Close acquaintances and rivals say Freston, unlike many other media executives, isn’t a man known for vindictive tantrums. His reputation as a benevolent manager with a finger on the pulse of the youth market could give him a powerful encore in an Internet era.
“Tom has built a larger reserve of goodwill than any businessperson I can think of,” said Graydon Carter, editor of Vanity Fair magazine and a Freston friend. “Tom’s second act will be bigger than his first.”
But scores of media bigwigs -- including Freston’s predecessors at Viacom -- have been forced out of top jobs only to fade from view or step into much smaller roles.
“It’s a really difficult transition,” said Bill Simon, a senior executive at Los Angeles-based Korn/Ferry International, an executive recruiting organization. “There’s only a handful of executives who have gone on to bigger things once they’ve lost a big job.”
Freston says that before moving on, he needs to make sense of his fall after a more than two-decade run at MTV Networks, where he built a cable group worth close to $25 billion that includes such networks as MTV, Nickelodeon and Comedy Central.
“I’ve got to take a beat and figure out life after the 20-hour workday,” said Freston, who will probably leave the company with a severance package worth $60 million. “You’re like an addict to this fast-paced life and you don’t know it.”
Already, rumors have surfaced that Freston could land at NBC Universal or News Corp. and that he’s had discussions with private equity firms. The NBC and News Corp. rumors were both quashed by the respective organizations.
Freston acknowledged that he had a surprising number of board seat and job offers in a 24-hour period but wouldn’t provide specifics. He envisions being part of a “maverick organization, left to center, with a good honest product.”
Few media companies, driven by quarterly earnings, fit that description. But friends of Freston suggest that he may be more suited to the converging world of digital music and content than to the old media universe.
Freston presents a unique figure in the media landscape. As the chairman of MTV Networks, Freston created one of the most influential and successful television companies in the world. More informally, he was marketer-in-chief, staying one step ahead of teenagers’ fickle tastes and standing out within Viacom as the fastest-growing and most profitable arm of the empire built by Sumner Redstone.
In January, Redstone separated the cable and broadcasting assets into two publicly traded companies. Freston was put in charge of the new slimmed-down Viacom, but was fired by Redstone when cable advertising unexpectedly slowed and the stock price of the company languished. Redstone faulted Freston for not being entrepreneurial enough in a fast-moving digital era that threatened to unseat MTV as the arbiter of young tastes.
The son of a New York public relations executive, Freston graduated first in his class of MBA candidates from New York University in 1969. He quickly abandoned his first job, in advertising, to travel, eventually starting a company that manufactured peasant-style clothes in India and Afghanistan for export to the U.S. Seven years later, he joined MTV’s marketing staff a year before the music cable channel’s 1981 launch.
He soon established himself as an iconic marketer, developing the widely known “I Want My MTV” campaign.
He was known to be as comfortable with rock stars as corporate executives. “Tom is beloved by talent,” said Irving Azoff, an artist manager and friend. “With Freston gone, it’s going to get more expensive for MTV to deal with the musical community.”
Freston was also known for creating a corporate environment where loyalty was genuine. Many of Freston’s top deputies -- such as highly regarded MTV Networks Chief Executive Judy McGrath -- have stayed with him for decades.
Those leadership skills may put him in high demand.
“There’s a huge shortage of leadership talent in the media business world,” said Adam Klein, a music executive who once worked with Freston as an advisor to MTV Networks. “At that level, being seen as a strong leader matters. People know Tom and they know his talents.”
But Freston’s irreverent style didn’t strike as true a chord with Wall Street. And his sense of loyalty, say Viacom insiders, was part of his downfall. These people say Viacom failed to acquire digital assets the company was pursuing, such as websites MySpace and MusicMatch, because Freston refused to fire executives who had proved themselves incapable of closing deals.
“I’m not sure he wanted to run a publicly traded company,” said Time Warner Inc. Chief Executive Jeffrey Bewkes, a close friend. “But he’s a tough competitor who his rivals respect and admire.”
Traditionally, executives who have bounced into bigger things after getting fired are skilled in wooing Wall Street analysts and closing big deals, observers say. Those include Terry Semel, who became chief executive of Yahoo after he left Warner Bros., and Steve Jobs, who returned to head Apple Computer Inc. after he once lost the job. Mel Karmazin, who preceded Freston as Viacom’s CEO before clashing with Redstone in 2004, reemerged as chairman of Sirius Satellite Radio Inc. largely because of his strong ties to Wall Street.
Freston, on the other hand, did not relish courting stock analysts.
Many of Freston’s associates agree that it is unlikely he will reemerge near the top of a Fortune 500 company. For one thing, they note, few sitting chief executives would welcome a potential rival.
Freston, however, said he was overwhelmed by an outpouring of support. He received more than 500 e-mails, some with job offers, after being fired.
But for now, Freston will bide his time -- at least for a few months.
“I intend to take a prolonged trip to Asia and get back to my roots, to clear my head,” he said. “I’ve only had two weeks off in a row once in the last 25 years. That life is over for now.”
Times staff writer Sallie Hofmeister contributed to this report.