New Blood For Turner

Cable World, March 12, 2001 by Jon Lafayette

Ex-WB Chief Eyes New Nets

At first there was shock in Atlanta. Two of the top executives at Turner Broadcasting were leaving in a management shakeup engineered by AOL Time Warner COO Robert Pittman.

Suddenly the man who started one of the newest broadcast networks was in charge of many of cable's largest networks.

When the smoke cleared, Turner insiders were relieved that months of uncertainty were over and that new CEO Jamie Kellner was arriving with a strong reputation as a good boss and a fading Ted Turner's blessing.

Wall Street hailed the combination of the mostly older audiences of the Turner networks with the teeny-bopper viewers of The WB, forming a cradle-to-grave portfolio rivaled only by Viacom's TV properties.

"Jamie Kellner is an extraordinary manager and a `perfect fit,' in our view," gushed a report from Merrill Lynch analysts Henry Blodget and Jessica Reif Cohen, who expect him to be able to wring from the combination the synergies that Pittman and other AOL TW executives have been promising.

Turner CEO Terry McGuirk becomes vice chairman and a consultant in the transition, and president Steve Heyer is leaving for a top spot at Coca-Cola. Heyer apparently had gotten a signal weeks before that he wasn't in line for the No. 1 TV job under Pittman.

AOL also put another broadcast executive, Robert Friedman, president of New Line Television, in charge of AOLTV, the company's product that offers Internet services such as e-mail and instant messaging through television sets.

What's next for Turner?

Many observers say a cable music channel is being talked about to take on Viacom's MTV and VH1. While Kellner dismissed the report, saying, "That's speculation of the press, not something we've released any information on," a media buyer thought a new music channel would be a welcome addition.

"In terms of cable, there's been only one place you could go if you're talking about teen," says Chris Geraci, director of national TV buying at OMD USA.

Building businesses

Kellner does say that starting networks is part of his business plan. And while Wall Street is demanding a tight rein on costs, he says he's there to build the business.

That would be a welcome change in Atlanta. Shortly after AOL's acquisition of Time Warner closed, a company-wide wave of layoffs hit Turner Broadcasting.

Those job cuts came a few weeks after CNN fired about 400 staffers. That downsizing was orchestrated by management installed by McGuirk and Heyer.

"That was an act of desperation by people who knew their performance was under review," says CNN founder Reece Schonfeld, who has been critical of Turner while promoting his book Me and Ted Against the World.

Ted's sixth child

McGuirk, Turner's right hand for almost 30 years, was known as "Ted's sixth child." He'll stick around for a while to help with Kellner's transition.

Then, "All the important people who really built Turner, they're all gone," Schonfeld says.

Will there be more departures?

Kellner, who will relocate his family to Atlanta, spent last week reassuring Turner staffers in person and praising them for their dedication to the company.

Still, some insiders wonder if some of the sales executives promoted to division presidents by Heyer will be sticking around. Among those mentioned: Turner Sports head Mark Lazarus and Dennis Quinn, who runs TBS Superstation.

Also still under the gun is the CNN hierarchy, including chairman Tom Johnson and CEO Phil Kent.

Kellner had nothing but praise for the news network, calling it "in terms of journalism, the most legit cable news network by a mile."

Fox News Channel has done well courting conservatives with the political winds blowing from the right, "But at the end of the day, when you look at the mass audience, CNN is the place," Kellner added.

He noted that CNN's ratings have responded to recent programming changes, and a strong push of promotion will help even more.

Overseeing an empire whose networks range from appealing to denture wearers (CNN) to braces wearers (Cartoon Network and The WB), Kellner says, "We are in a position to serve advertisers better than anybody else in the media business today."

Generally, media concentration leads to fears of higher ad rates from Madison Avenue, but Geraci says he doesn't see buyers' relationships with individual Turner networks changing.

Cradle-to-grave is "a wonderful thing in theory," but there are only a few advertisers that buy across that broad a spectrum.

In addition to packaging networks, Kellner sees the company's online brands as a sales point. Of course, even before Kellner's arrival, Turner was pushing integrated sales. A day after the management changes, AOL announced that three of its advertisers, Kinko's, Continental Airlines and Princess Cruises, were expanding their relationships with the company, in some cases including Turner TV networks in the mix.

Cross programming

Kellner also expects his networks to do more cross programming and promotion. "I see no reason why we couldn't see something from TNT on The WB and vice versa," he says.