A time for bold leadership: Richard Parson's deal-making prowess and ciplomatic touch has catapulted him to become CEO of AOL Time Warner, the world's largest media powerhouse - Cover Story - Company Profile - Interview

Black Enterprise, Feb, 2002 by Derek T. Dingle, Allan Hughes

ON AN UNUSUALLY WARM DECEMBER DAY, RICHARD DEAN PARSONS IS WHERE HE usually is--in the thick of the action. One minute, he's in a strategic powwow with top executives, in the next, he's peppered with questions from financial news reporters. Through countless meetings, a blizzard of phone calls, and a series of mini-crises, he maintains his trademark cool.

What makes this day different from any other is that 24 hours ago Parsons was named CEO of AOL Time Warner, putting him in charge of a media leviathan and cementing his position among the global business elite. The move makes the 6-foot-4-inch, scruffy-bearded executive one of three African Americans currently at the helm of a Fortune 500 corporation. The other two members of this exclusive club are Franklin Raines of Fannie Mae, a $44 billion mortgage lender, and Kenneth Chenault of American Express, a $23 billion financial services monolith. (see "Navigating Rough Waters," this issue). Parsons, listed among BLACK ENTERPRISE's 50 most powerful blacks in corporate America two years ago, will be installed in the position in May.

"I think it says a lot about the positive changes that are taking place in the country," says Clarence O. Smith, president of Essence Communications Partners and CEO of Essence Entertainment, speaking of the other African American CEOs appointed within the last few years. "I think if you just think back even just six years ago, none of those appointments were made, and so it seems there's a very important confluence of activities and events that are bringing this about." He says the positive performance of such leaders as Kenneth I. Chenault, Colin Powell, and others led to a "perception of value" of African Americans operating in top positions, paving the way for Parsons' appointment.

The media assets under Parsons' stewardship are just plain mind-numbing. He controls a vast $36 billion empire, as of year-end 2000, that reaches billions worldwide through a host of megawatt brands including, leading online service AOL; Time, Money, and Sports Illustrated magazines; HBO, TNT, and CNN cable networks; Warner Brothers Studios; and a 49% stake in Essence Communications Partners (No. 23 on the 2001 BE INDUSTRIAL/SERVICE 100 list with $148.9 million in gross sales), the publisher of Essence magazine (see chart).

To expand these franchises, the 53-year-old Parsons has a laser beam focus on executing his comprehensive, three-prong strategy. "The immediate goal is to make our assets work seamlessly," Parsons told SE. "I see us going forward by addressing three key areas. We must continue to cultivate our low-hanging fruit such as properties like Harry Potter. The next order is the advancement of technology like interactive TV and downloading music. Finally, we must invent new businesses."

To achieve this grand scheme, he must bring together a sprawling colossus and create one distinct corporate culture. It's no simple feat.

His predecessor, however, believes he's more than up to the challenge. Asserts outgoing CEO Gerald Levin:" I have the greatest confidence in Dick Parsons' ability to lead the company forward, coalesce its diverse interests, and work with our strategic partners to achieve ambitious goals."

Even President George W. Bush is a fan of Parsons' leadership prowess. When he appointed the executive to serve as co-chair of a commission to overhaul Social Security last May, he said: "Bichard Parsons is one of the leaders of this nation's information age economy. Few people have served more tours of duty in the American government and business ... [He] represents, in our time, the spirit of business statesmanship at its highest."

A TIME FOR CHANGE

When the $106.2 million AOL--Time Warner merger--the largest such transaction in history--was completed roughly a year ago, there had been much speculation about the company's future leadership. Analysts say that even though the recent management shuffle came as a shock, word is that Levin had been quietly planning his retirement for as long as a year, consulting with board directors and executives to devise a transition plan.

Why now? Maintains Scott Kessler, a securities analyst at Standard & Poor's: "My impression is that the transitional plan was just [delayed] by the fact that you had an economic downturn that was affecting the company. My guess is that [Levin] would've probably announced his plans to leave before he did, but he didn't because of a lot of things that were happening in the economy and in the Internet sector."

With the company basking in the glow of the success of New Line Cinema's Harry Potter & the Sorcerer's Stone (which grossed $219.7 million in its first three weeks), and the anticipated success of the movie adaptation of J.R.R. Tolkien's Lord of the Rings: The Fellowship of the Ring, Kessler says the investment community is thinking more positively about AOL Time Warner, allowing Levin to step down without leaving on a sour note. And Wall Street also liked the news, surprise or not. AOL (NYSE: AOL) stock gained 1.08, or 3.11%, to close at $35.83 on December 5, the day of the announcement.