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

Over the past year, the buzz was that Robert W. Pittman, co-COO and Parson's equal at the company, would be Levin's heir presumptive. In fact, a cover of Business Week hailed Pittman and Chairman Steve Case as "Men of the Century." In his position, Pittman oversaw AOL and Time Warner's cable systems, magazines, cable channels, and the WB network--roughly 86% of the company's expected 2001 cash flow. Parsons, on the other hand, was responsible for the content business--primarily filmed entertainment and music--and all corporate staff functions, including financial and legal activities.

The board, however, viewed Parsons as the better executive. Industry watchers say he was picked over the more visible and vocal Pittman because of his experience in running a large global business, knowledge of regulatory issues, and contacts in Washington, D.C., having been a corporate attorney and a senior White House aide under President Gerald Ford.

Under the new management structure, Pittman will serve as the company's sole COO, and all division CEOs will report to him. He, in turn, will report to Parsons. (Case, the founder of AOL, will remain chairman.)

David Joyce, an equity analyst at Guzman & Co., an investment banking firm in Miami, points out that Parsons is lead negotiator in the media conglomerate's bidding war (along with Microsoft Corp., Cox Communications Inc., and Comcast Cable) for cable television operator AT&T Broadband. Should AOL Time Warner have the winning bid, the deal is sure to be chock-full of regulatory snafus. AT&T Broadband, a division of AT&T Corp., has 14.4 million subscribers as of June 30, 2001, making it the largest in the industry. Time Warner Cable is No. 2 with 12.67 million subscribers, according to the National Cable & Telecommunications Association.

Parsons has also demonstrated vision and can effectively communicate and execute strategic plans. "What he brings to the table is that he's probably more effective as a big-picture thinker than Pittman," Kessler adds. "Pittman is a more logical choice for COO because basically he's a great operations guy, and you really need someone who's more visionary oriented for [the CEO slot], and Dick Parsons fits that mold."

Also, expect the new corporate chief to offer more realistic financial goals. When the two companies merged, management promised annual revenue growth of 12% to 15%. Because of a weaker advertising environment, revenue growth is expected to be closer to 5% to 7% next year. This news did not give investors warm fuzzies.

MAKING HIS BONES

Parsons will need to summon his impressive diplomatic skills to unify the old economy stalwart Time Warner and the younger, new economy structure from AOL. "My sense is that Parsons is truly a statesman and that's really what you need in a CEO's position," says Joyce. "He's got a really even keeled, witty temperament about him and that's maybe what's settled factions within the company. He's got an ability to coalesce the different factions."

A self-proclaimed "Type B" personality, the New York native made his bones in politics and finance. And throughout his career, the graduate of the University of Hawaii and Union University's Albany Law School has presented himself as a roll-up-your-sleeves leader with a combination of sound judgment and accessibility. "I'm kind of a lunch-pail manager," says the laid-back Parsons. "Where Jerry Levin was more cerebral and strategically focused as a CEO, I will tend to demonstrate more of an in-the-trenches style of leadership. I like to be with the troops."