The One-Guy Theory
There is a central truth about Time Warner (TWX) that new CEO Jeff Bewkes must grapple with: Things. Move. Very. Slowly. There. The stock market yawned after his initial earnings call with analysts on Feb.6, perhaps because two of the major initiatives he mentioned—revamping AOL to sell its dial-up access business more easily and moving toward some decision about Time Warner Cable (TWC)—already have spent a few seasons percolating as possibilities in the press. Furthermore, readying AOL would be "fairly complicated," Bewkes warned. The process could take several months.
This touches on the fundamental media conglomerate problem: There are too many layers. There are too many fiefdoms. There are too many...guys. Guys strolling the corridors, guys clustering around the boardroom, guys slowing things down. (The litany of executives that follows shows they're, still, almost exclusively guys.) This, in a time of great uncertainty and fast-shifting consumer appetites, when sheer speed may determine which companies successfully molt and which simply melt.
I was chewing this over with a dealmaker pal and, inevitably, the alacrity and decisiveness with which News Corp. (NWS) makes its moves came up. Said pal had a two-word explanation: "One guy."
Meaning, at News Corp., Rupert Murdoch is the one guy who sets the parameters, who makes the decisions, and whose sensibility is stamped onto the brains of underlings. A producer on, say, Fox News, for good or ill, thinks about what Murdoch wants out of the programming a hell of a lot more than a producer for Time Warner's CNN thinks about Bewkes.
Permit me to introduce the One-Guy theory of media companies. A One-Guy company, to a remarkable degree, has one guy clearly in charge and setting the tone of the organization. Working at a truly One-Guy kind of place concentrates the mind wonderfully, as anyone who worked for ur-One-Guy guy Barry Diller will tell you.
But Time Warner, famously set up as a group of decentralized divisions, is no such place. All earlier attempts to make it more, um, One-Guy have flopped resoundingly. This is bad, because practically all of media's recent forward-looking moves came courtesy of One-Guy guys. Which companies are making sudden knockout bids for laggard companies? One-Guy players News Corp. for Dow Jones and Microsoft (MSFT) (former One-Guy Bill Gates; current One-Guy Steve Ballmer) for Yahoo! (YHOO) Which broadcast network has made the boldest moves online? CBS (CBS), dominated by the One-Guy personality of Leslie Moonves. He likely learned a thing or two from his years working for Sumner Redstone, an exemplar of the form and One-Guy enough to have fired Viacom (VIA) CEO Tom Freston abruptly for, well, not being One-Guy enough, and letting a One-Guy company snatch up MySpace (NWS). (NBC, its Many-Guys status solid thanks to being submerged within General Electric (GE), is making a bid to reinvent the online video space with its still-upcoming Hulu.com. But it had to partner with Murdoch's News Corp. to do it.)
One of the sharpest recent moves from newspapers—now there's a phrase you don't encounter often!—is the complex, 22-company deal with Yahoo to partner on various local online ventures. (Some proponents of that partnership expect it to start producing meaningful revenue this year.) A key player in knitting together the alliances: W. Dean Singleton, chieftain of the privately held Media-News Group and a rare modern-day One-Guy newspaper exec.
Publicly traded newspaper companies were founded in the One-Guy vein but long ago abandoned that model. Tribune Co. hasn't followed it since erstwhile guiding spirit Colonel Robert McCormick died in 1955. But watch Tribune closely in the aftermath of its purchase by billionaire Sam Zell. Zell has serious One-Guy tendencies. He proudly, and loudly, engages in all manner of One-Guy behaviors, as evidenced by his predilection for publicly directing unprintable phrases at current and former staffers, as those who have seen Web videos of his meetings with underlings now know. (One-Guy guys can't be fired easily, if they can even be fired at all.)
Technically, some companies that operate as One-Guy are actually Two-Guy or Three-Guy. Among them: the former Miramax and current Weinstein Co., where the guys are Bob and Harvey Weinstein. Another is Google (GOOG), which to a remarkable degree remains a creation of Sergey Brin and Larry Page, but whose longtime CEO Eric Schmidt is firmly in the realm of its One-Guy-ness. (Big tech companies tend toward the One-Guy. Apple (AAPL), Microsoft (MSFT), Dell (DELL), Oracle (ORCL), Amazon (AMZN)—One-Guy, all. But Yahoo? Not so much.)
The One-Guy Theory should not be considered a corollary to the oft- discredited Great Man Theory. One-Guy guys tend to the operatic. One-Guy guys can be spectacularly wrong. One-Guy ventures can have shortcomings. Microsoft's software dominance has yet to translate to its media ventures. While a classic One-Guy cautionary tale is Hollinger's Conrad Black, who was convicted of fraud last July, even the best and brightest make massive miscalculations. Many of Diller's recent troubles at IAC (IACI) stem from getting crosswise with stakeholder John Malone, who's been a sort of apex of One-Guyness ever since he built cable giant TCI; having two One-Guy guys in the same place can lead to some heavy weather. Michael Eisner's long run at Walt Disney (DIS) was remarkably successful until several unattractive One-Guy traits—micromanagement, tone-deafness, the inability to stop undermining successors—came to the fore and did him in.
It's true that Disney's stock popped nicely after Eisner left and the more Every-Guy Bob Iger took over. But, whatever. A switch in executive temperament often releases a burst of energy. Baseball teams usually turn around when a manic, hyperintense manager is replaced by someone with a more mellow affect. Still, in times like these, look for One-Guy guys to thrive and steer their ships more surely and swiftly than the competition.
The reason is simple: In the land of the blind, the One-Guy is king.
For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia