The race is off. Dick Parsons won.
AOL Time Warner CEO Jerry Levin shocked the media world yesterday by announcing he will step down from his post in May of next year. But he paved the way for the rise of the Time Warner people at the world’s biggest media and entertainment company by making sure his longtime friend and deputy Dick Parsons was named his successor.
Bob Pittman, 47, who has shared the co-COO title with Parsons since AOL Time Warner was formed in January of last year, will become the sole operating chief, reporting to Parsons. Steve Case will remain chairman.
“AOL may own Time Warner, but Time Warner got it in the end,” said one Time Warner exec, who noted the mood inside the home of Bugs Bunny and Tony Soprano was one of sweet revenge.
When Pittman and Parsons were made partners last year, industry insiders were betting on the rise of Pittman. The former No. 2 at AOL and a creator of MTV, Pittman quickly grabbed the lion’s share of operational duties – including AOL, magazine publishing giant Time Inc., HBO, and Turner Broadcasting, which includes CNN and the WB Network.
Parsons was left with only the movie business, Warner music and the trade publishing operation.
But the tide suddenly shifted. “When the deal was cut, it looked like AOL was in charge of everything,” said Uri Landesman, chief investment officer at AFA Management Partners, which owns AOL Time Warner shares. “But the economy turned down, and the benefits of the deal have taken a lot longer to present themselves.”
“The $64 billion question is: Bob Pittman lost. Can he go from working beside Parsons to reporting to him? It depends on what’s important to him right now.”
Pittman, according to his close confidants, has no intention of bowing out. Said one colleague: “He plans on finishing out his career there.”
Pittman – generally seen as an operations guy versus Parsons’ more outspoken role – said yesterday, “I love running a company’s operations, and I look forward to working with Steve Case and Dick Parsons” in the new, streamlined structure.
However, others are not so sure. Insiders say Pittman has had problems with many Time Warner execs, including former Time Warner cable chief Joe Collins, who was reassigned to AOL’s new interactive-video unit in August as a result.
“Pittman doesn’t have many friends. Everyone trusts Parsons,” said one high-level media exec.
“I can think of at least five other entertainment companies that could use someone like Pittman,” said one industry analyst.
Still, most industry watchers see Pittman as a talented cross-platform marketer who prefers juggling the various branding and promotional issues under AOL’s vast media umbrella to serving as the public face of a conglomerate in Washington D.C. circles – a role Parsons relishes.
The 62-year-old Levin said yesterday his decision was motivated not by corporate and boardroom infighting, but by the realization that after 30 years, his job was done.
Levin spent the past year talking with the board about his succession – and spoke privately with both Parsons and Pittman about their new directions.