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May 6, 2004
Thursday, May 6, 2004.
Thursday, May 6, 2004. Thanks CBS NewsWhen I was general manager of NBC-owned WNBC-AM radio (now WFAN) in 1978, I became a member of the New York City Radio Broadcasters Association. The general managers of the major New York radio stations were member and regularly attended the meetings: Mel Karmazin was GM of WNEW-FM, as I remember, and Rick Devlin was GM of WOR--I them both from the years that we were at CBS Radio together. One of the group's projects was to do a yearly salary survey of general manager's salaries. I remember a meeting at which we discussed the project. Several general managers indicated that their companies were reluctant to have them provide that information. Mel Karmizan was adamant and angry--he was an is always angry about something--that they survey be completed as soon as possible so that he could show WNEW-FM's owners that he was being underpaid. He seemed to have an obsession about being underpaid, and made the survey and GM's salaries the main topic of discussion. Other GMs at the meeting wanted to talk about a project for ascertaining the needs of the community. Not Mel.
A story in today's Wall Street Journal by Gregory Zuckerman and Joe FLintwas headlined, "Why Wall Street Snubs Viacom: Darling of Investors a Year Ago, Media Titan's Karmazin Feel Heat Over Radio Woes, Profit Concerns." The first paragraph read, "The love affair between Mel Karmazin and Wall Street is on the rocks. A year ago, investors held their collective breath as Mr. Karmazin, Viacom Inc.'s president, considered leaving the company. They viewed Mr. Karmazin as the most gifted manager in the media world, and fretted that his departure would send Viacom shares plummeting. Eventually, Sumner Redstone, Viacom's chairman and chief executive, bit the bullet, retaining Mr. Karmazin with a juicy contract on par with Mr. Redstone's hefty salary."
A year ago, it was about money for Karmazin, just as it was in 1978. Leopards don't change their spots. In both situations I can see Mel threatening to quit if he didn't make more money. The WSJ story went on to report that investors were frustrated that Viacom stock is down over 9% in the past year, and more than 13% so far this year, compared with a drop of just 1% in Dow Jones industrial average in 2003. It was also reported that short sellers had sold 41 million shares short as of April 12, "a significant increase from the 13 million a month earlier." The rest of the story detailed some of the problems Viacom is having, even though the CBS television network is battling NBC for the number-one spot with the desired 18-49 demo.
What the WSJ story doesn't examine is Karmazin's management style. When Viacom's profits were growing, his take-no-prisoners style was overlooked. Wall Street has always taken the position that it doesn't matter how you treat people or how you do it, as long as earnings continue to rise, Wall Street is blind to anything else (including ethical lapses). Karmazin is a horrible, nasty manager. It's no coincidence, in my opinion, that on the same day the WSJ story ran, Media Post reported that the CBS program executive responsible for landing "Survivor" has jumped ship to join NBC. Glen Maynard, senior vice president of alternative programming and creative strategies, will be the new executive vice president of primetime development at the NBC television network. I know many people who have left Infinity and CBS because they said, "It's a terrible place to work. Mel's terrible to work for."
Could it be that Wall Street is seeing that one of the main problems at Viacom is that top management is not as good as it thought and that Viacom has no succession plan. Redstone thinks he will live forever and wants to dump Karmazin when his contract is up next year, so Mel wouldn't think of hunting for a successor. He wants to threaten to quit if he doesn't get a big raise--same old trick. I suspect that the WSJ story might have been a plant from Redstone to set up giving Karmazin that bad news (no raise, no job), but I wonder who he has in mind? Moonves? His (Redstone's) daughter? Who do you think?
The problem is that whoever Redstone brings in will probably be a bottom-line oriented CEO who, like Karmazin (and I assume like Redstone), will not the least bit interested in serving the public--just maximizing profits. I suspect that the troops at CBS and, especially, CBS News know this and are depressed. I know morale at CBS is low, which is too bad, because it ought to be
sky high after "60 Minutes II" was the first television network to break the Abu Ghraib torture story. But does CBS News get any credit for runnig with the story? No, all it gets is a story about Viacom's flagging stick price. I'll bet the people at CBS News are pissed.
There is an enormous amount of talk about the torture story, but I haven't seen anyone say, "Good job, CBS." So, I'll say it. Thanks CBS. You had the guts to show the horrible Abu Ghraib pictures of torture--no abuse, disgusting torture. And I'll also say thank you to ABC News for letting Ted Koppel read the names of those killed in the war, even in the face of stupid, right-wing criticism from forces like the conservative Sinclair station group. Both were courageous decisions and show that the news divisions are not yet puppets for the conservative agenda, like Fox News is, or puppets of the corporate greed meisters. So there is some hope.
Posted by Charles Warner at May 6, 2004 10:37 PM