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February 28, 2007

Like Any Other Business?

According to an article in the Chicago Tribune on February 22, the Chicago billionaire Sam Zell, is quoted as saying that despite the public service role of journalism, “there is no difference” between running a newspaper and managing any other for-profit business. Well, it gives me great satisfaction to tell someone who is worth several billion dollars that he’s misinformed.

The biggest trouble with the newspaper industry today is that Wall Street and other investors feel the same way--that newspapers are just like other businesses and that the public service role of journalism is a subordinate issue to making a profit. Yes, newspapers are suffering from an erosion of circulation and advertising revenue as young people go to the Web for their news, and as ad revenue, especially classified ad dollars, migrate to the Web. This revenue erosion and its multi-layered fallout that is effecting journalism was well documented in the third PBS “Frontline” program titled “News War: What’s Happening to the News,” that aired on February 27.

The “News War” program included a segment on the problems the Los Angeles Times is having because of its ownership by the publicly held Tribune Company. Big investors want the LA Times to cut editorial staff and focus on local news. It was scary watching interviews with investors Charles Bobrinskoy, vice chairman of Ariel Capital Management, and Lauren Rich Fine, managing director of Merrill Lynch.

Bobrinskoy said, “They’ve got over 20 foreign bureaus, including Istanbul and Cairo. Nobody is reading the LA Times wanting to find out what’s happening in Istanbul, so it’s critical that the LA Times figure out what it is, which is a provider of local news about what's going on in Southern California.” In other words, the big Wall Street investor wasn’t afraid to tell the editors how to run the newspaper and tell them what kind of stories are important. What would Bobrinskoy say if James O’Shea, the editor of the LA Times, or Bill Keller, the Editor of the NY Times, told him that he didn’t know how to manage his portfolio of investments, that he had too many high-tech stocks and was too heavy in junk bonds?

Lauren Rich Fine, said on the same “Frontline” program, “I don’t believe consumers are willing to pay for the distinction between good-quality journalism and bad-quality journalism…,” thus indicating that the LA Times should concentrate on local coverage and cut staff in international and national reporting. What arrogance, what a low opinion of newspaper readers. She’s obviously speaking from interviewing a sample of one—she’s reflecting her own inability to distinguish. She probably reads The NY Post and Page Six.

When Private Capital Management CEO, Bruce Sherman, badgered Knight Ridder into selling its newspaper chain to McClatchy, it was reported that Sherman was urging Knight Ridder to sell so that his investment fund could make its targeted return and he could then get his huge bonus. Some rumors were that the bonus would be over $300 million. So when Wall Street fund managers say they are looking out for their shareholders, the translation is, “I’m looking out after my multi-million dollar performance bonus and have to find anything even remotely believable to say to justify my actions, no matter how ridiculous or harmful.”

When “Frontline” reporters, or any reporters for that matter, interview anyone from Wall Street, they should ask for full disclosure of interviewees’ financial interests in the company or industry they are being asked about. So, “Frontline” should have asked Lauren Rich Fine, “What percent of the Tribune Company stock does your fund/company own?”, “What is your annual total compensation?”, “”How much money is at stake in your performance bonus if the Tribune Company stock goes up, say three points?” “How much is your fund up or down this year?”, and “How will the percentage it’s up or down effect your bonus?” Then, when Fine says something silly about the LA Times or any company in which her fund and/or firm own stock, we’ll know how to evaluate what she says.

It’s obvious Fine wasn’t up on 35 years of scholarly research on the positive relationship between newspaper quality and profit. Esther Thorson and Murali Mantrala recently completed a study that will be published in the April issue of the Journal of Marketing. Thorson said of the study, "The most important finding is that newspapers are under-spending in the newsroom and over-spending in circulation and advertising. If you invest more in the newsroom, do you make more money? The answer is yes. If you lower the amount of money spent in the newsroom, then pretty soon the news product becomes so bad that you begin to lose money."

But what would Fine or Bobrinskoy or any Wall Street investor know about the facts and reality of the newspaper business or, more importantly, about public service or being a public trust when their personal bonuses are at stake? The next time I see “Frontline” or any news report quoting any of these creeps, I want better reporting. I want full disclosure—I want to know what’s really at stake for the investors and corporate executives being interviewed. After all, I know what’s at stake when courageous journalists like Dean Baquet, ex-editor of the LA Times, speak out and tell the truth—their jobs, not million-dollar bonuses, are at stake.

Posted by Charles Warner at 06:39 PM | Comments (0) | Print | Mail this entry

February 22, 2007

Shame On You, Pinch

A couple of weeks ago the Ochs-Sulzberger family pulled the majority of its assets (around $640 million) from Morgan Stanley, which had been the custodian of the family fortune for many years. The caption under a picture of Arthur (“Pinch”) Sulzberger on the FORTUNE website read, “Angered by a money manager’s challenge, Times chairman Sulzberger, Jr. will no longer do business with Morgan Stanley.”

I understand how Pinch could get pissed and defensive at Hassan Elmasry, a Morgan Stanly managing director who runs Morgan Stanley’s American and Global Franchise Strategies Portfolio. The fund has $11.5 billion in investments and owns about 7.6 percent of the NY Times Company stock. Elmasry has been urging a shareholder revolt against Pinch and the Ochs-Sulzberger family ownership of about 19 percent of the NY Times Company stock but all of the Class B voting shares, which allows the family to control nine of 13 board seats. The company’s stock is off 40 percent in the last two years and Elmasry thinks it’s probably Pinch’s fault. After all, he’s the Times’ CEO who is elected by the family-controlled board of directors.

But, shame on you, Pinch, for pulling your money out of Morgan Stanley in a snit. What would the NY Times or the Boston Globe say to an advertiser who used economic bullying by canceling its advertising because it didn’t like an editorial stance your papers took? Wouldn’t you say that they were trying to use their financial clout in an attempt to squelch your well-considered and well-researched position? Wouldn’t you defend freedom of speech and the notion that your editorials create a public dialogue about important public issues and that you would welcome and publish dissenting opinions in an attempt to create a robust marketplace of ideas? Wouldn’t you urge the advertiser to fight it out with you publicly, to put the ideas out, defend them, and let the public choose? Wouldn’t you accuse them of trying to bully you and interfering in your duty to your public?

In the FORTUNE website article (February 2) by Tim Arango, in which the picture and caption quoted above appeared, Morgan Stanley CEO John Mack was reported to have said that he would have preferred that Elmasry had never gone after the newspaper of record, but that he has never interfered because meddling would conflict with Elmasry’s obligation to his investors.

It’s ironic that the New York Times editorialized when the dot.com bubble burst and the subsequent scandal erupted about how some investment analysts should be punished because they gave positive ratings to turkey stocks because of pressure from the investment banking side of the house. It seems only fair and balanced that the Times should editorialize now against another type of economic bullying or else be accused of flagrant hypocrisy.

Posted by Charles Warner at 12:19 AM | Comments (0) | Print | Mail this entry

February 20, 2007

The XM/ Sirius Merger

My wife, Julia, and I went to see the new play last week, "Talk Radio," starring Liev Schreiber, and I loved it. Schreiber is brilliant and real in his portrayal of Barry Champlain, a troubled, popular talk show host in 1987. I urge my ex-radio friends to go see it; you'll appreciate Liev Scheiber's performance because he nails with deep understanding the complex, ego-centered, self-loathing, talented talk-show host. Schreiber understands talent--the kind anyone who ever ran a radio station had to deal with.

Written by Eric Bogosian, the play was evocative of the kind of talk radio that was popular in the 1970s and 80s and was also, for me, nostalgic. In the 1970s and 80s radio was fun, popular, and if programmed properly, quite profitable. I was general manager of several radio stations in the 70s, so I could relate to the characters and problems the play presented.

That sense of nostalgia was amplified this week when XM and Sirius satellite radio channels announced that they planned to merge. The move has been rumored for months and was hailed by Wall Street as the best solution to stop the massive bleeding of cash at both companies. A merged company would be able to shed a large number of employees in redundant back-office and sales jobs. Sirius’s CEO, Mel Karmazin, has been pushing the merger as a way to create value for his stockholders (and, of course, himself, a large stockholder).

But the merger would not close until 2008, if it is approved by the Justice Department and the FCC, which seems quite problematic, especially after a statement released by FCC Chairman Kevin Martin saying that the two companies will face a “high” hurdle. In 1997 the FCC passed a rule indicating that there must be two satellite services, which would nix the deal if the FCC holds firm.

The two companies want to merge because they are losing tons of money and whine that the media landscape has changed dramatically since the there-must-be-two FCC rule was passed a decade ago. Competition from iPods, Internet radio, downloaded music, YouTube, and MySpace has increased dramatically in the ensuing decade and the two satellite radio companies have lost a total of around $6 billion as they overspent in marketing costs and talent acquisition, escalating costs as they each tried to beat the other’s brains out.

I subscribed to XM radio several years ago because a good friend who was a senior executive at XM gave a friends-of-XM discounted deal. I listened to a few jazz channels occasionally and tried some talk channels and the comedy channel, but I cancelled it two months ago because I didn’t think it was worth $12.95 a month. I listened less and less over the months and found my own mix of iPod tunes, podcasts, several online radio stations, and the New York NPR station satisfied my music and information needs.

I suspect I’m not alone, which is probably why subscription growth for both services has slowed in recent months and which, in turn, probably made a merger and cost cutting more urgent. Mel Karmazin said in a joint news conference announcing the deal that, “The benefits to the subscribers are awesome.” And later he said, “There’s going to be more consumer choice.”

Sure, Mel. Consumers will have a choice of fewer channels that will eventually carry commercials of some kind, maybe underwriting like NPR stations. But you can bet your first born that Mel will find a way to squeeze in more commercial messages into combined satellite radio channels just as the CBS Television Network did, the CBS Television Stations did (remember the illegal digital machine that speeded up commercials so they could fit in more spots), and as the Infinity Radio stations did under his stewardship. Karmazin has never reduced commercial loads, so he won’t in the future, thus eventually limiting the appeal of satellite radio just as over-commercialization has hurt over-the-air radio.

Ahh, for the good old days of radio.

I asked my pal Bill Grimes if he thought the FCC would approve the merger and here’s what he wrote:

“If the companies can show that competition between the two cannot produce profitability, which will be tough to demonstrate, and that the consumers/customers of the two services would then be deprived of receiving a satellite radio service, then getting approval will be a bit easier. The problem for current shareholders is that a Federal judge or the FCC may well rule that both companies should continue on the route they are headed-- bankruptcy. In such a circumstances the equity holders would lose all their value (Paul Allen, Karmazin, and some other wealthy investors) and the debt would be eliminated (banks would get equity in return for the debt a company failed to pay). Then, either one or both companies would emerge from bankruptcy as a going venture with a good chance to succeed.

I think the latter has a better chance of providing consumers with more choice, i.e. two companies emerging from bankruptcy instead of one merged one. But in a Republican FCC, which might favor large investors, it might decide that both companies after bankruptcy still might not make a profit and really disappear and, thus, approve a merger (I find that unlikely though).

Answer: I don't know. But better law would be to prevent the merger, force bankruptcy, and emerge subsequent to bankruptcy with two companies neither with debt.”

Neither the Wall Street Journal nor the New York Times nor any of the other online news stories I read about the merger mentioned the effect of NPR Radio has had on commercial radio listening in the U.S.A. I think NPR has significantly hurt listening among up-scale adults over 25 to commercial, over-the-air radio, which is another reason that the powerful National Association of Broadcasters lobby will fight hard against the Sirius/XM merger. Commercial radio stations are reeling from the same competition that is hurting satellite radio (including NPR) and they don’t want a stronger competitor.

The good old days of radio, the radio of the play “Talk Radio,” are gone forever, which makes me a little sad, but not sad enough to stop me from listening to some enlightening podcasts that I download FREE onto my iPod from the iTunes Store, the Podcasts section, and the Education category, where you can get lectures from Harvard, Yale, and Princeton. My favorite this week is a podcast from a lecture at Yale by Barry Nalebuff titled “Why Not” (from his excellent book of the same title). Come to think of it, we need satellite radio and commercial radio now about as much as we need buggy whips.

Posted by Charles Warner at 11:27 PM | Comments (2) | Print | Mail this entry

DVD [TypeKey Profile Page] at February 21, 2007 06:33 PM writes:

Though it's still too early to gain too much perspective on this whole matter, the smartest people in our industry are being objective and fair with their commentary and aren't jumping at conclusions or being overly defensive the way the industry's been since it's been getting beaten over the head by everyone from Wall Street to Internet Radio.

But, your thoughts are in-line with reality. At my company, Bridge Ratings, we have been anticipating this announcement for months and along with our usual examination of satellite radio consumers we have also been surveying this group since late summer on issues related to a possible merger. One fascinating element we can garner from our responses is that the period between now and when/if the merger occurs will see a dramatic slow-down in subscription trial due primarily to consumer uncertainty about whether the product they get now will be anything like the product they get at merger time.

Another consumer perception problem comes with the territory. Most of the consumers we interviewed just don't trust monopolies.

In order to stop the bleeding, Mel and friends will have one heck of a marketing and communication story they will need to get out there between now and December and hope that the average consumer - and not the radio community - can see the benefit of one merged company.


Rabh17 [TypeKey Profile Page] at February 21, 2007 03:27 PM writes:

Hold on Mr. Curmudgeon

I have XM. I paid for sattelite radio because I got tired of hearing the same THREE pop songs In-A-Row over and over and over. I PAID becuase I did NOT want to hear near nonstop commercials between the songs. I Chose Sattelite because I’m over 35 and I want to hear MY music– NOT what the POP music industry thinks 17 years olds should be hearing. I don’t have Cable sattelite TV with their abbreviated music offerings because I still refuse to PAY for Video with Commercials. And the Music selection is NOT as comprehensive as either Sirius or XM.

Next– there is simple convenience. I just TURN IT ON. I let the programmers surprise me. I have no iPod, and have nothing against iPods. What I DON’T want to do is spend HOURS and HOURS searching, downloading, sampling, categorizing, copying, transferring, shuffling my music. People: That’s called WORK. KIDS and Teenagers do it because they have TIME on their hands. I WORK! When I get home, I just want to TURN THE MUSIC ON and RELAX.

And yes, I know a lot of you adults also make a lot of noise about how great your digital music collection is– but you are a small technophilic minority. I'll go the dowload route for an NPR segment when it VERY important. Otherwise-- I just Listen to NPR. I just TURN IT ON. And back to Music-- in order to keep that digital collection new and fresh– YOU have to go and Search, Sample, Download, Copy, Transfer, Categorize, etc etc. You have to WORK for your music. Why do it when you don't HAVE TO?

So don't dismiss us ordinary, WORKING adults who enjoy music and uninterrupted entertainment sans the iPod yoke.


February 16, 2007

Bill Grimes On the State of Radio

Radio station owners may not be as "desperate" as Bruce Braun contends in his February 15 Media Curmudgeon blog entry; although, if they were they would hardly reveal it publicly. But Clear Channel might be desperate, having watched its stock decline for three years. It is reportedly selling as many as two hundred of its stations.

Radio's problem is that it is a forgotten "utility" in that high-speed Internet access provides both information and entertainment that users want when they want it. This increasing Internet access is now available in more that 50 percent of US households, and usage has dealt a significant blow to advertiser-supported radio listenership in home. Out-of-home audiences, long a bastion of radio's appeal to advertisers, is in decline because of wireless Internet devices, iPods, satellite radio, and because the increase in the number of commercials that stations air today has alienated many listeners. I stopped listening to Newsradio two years ago when the increase in commercials became too overbearing and I realized that any news being broadcast was available on some website, including its own.

The fact is that radio station values have declined in both public and private markets because of the reasons stated above, and their ad revenue growth is less than inflation. So Google's ambitions to gobble up radio station inventory may be unrealistic and arrogant but its market capitalization and balance sheet cash enables it to engage in an abundant number of business ventures such as this one in radio without the company suffering much consequence. If it wanted to, Google, which has a market cap of $141 billion today (versus Clear Channel's $18 billion), has the financial capacity to buy nearly the entire US radio industry. Of course the FCC would prevent such a purchase, and why would Google want ownership in a declining industry. Google's desire to reap advertising revenues by making deals like Bruce describes with stations may fail and stations may continue to sell all of their inventory themselves, but that does not enhance the prospects of the ailing radio business.

Posted by Charles Warner at 04:32 PM | Comments (0) | Print | Mail this entry

February 15, 2007

Bruce Braun On Google Selling Radio Spots

Guest blogger Bruce Braun writes about Google's failed attempt to sell radio air time after reading the following written by Eric Sass in Media Post:

"Why Can't Google Sell Premium Radio Ads?
by Erik Sass, Wednesday, Feb 14, 2007
With the departure of DMARC founders Chad and Ryan Steelberg last week, industry observers are buzzing about Google's ongoing attempt to penetrate the radio market with low-cost online ad sales and placement."

Bruce then writes:

"As smart as the Google guys are, they are still arrogant and ignorant about advertising. AdWords and AdSense are not really advertising or marketing products. They simply match up searches to lists of products, services and names for a fee. From a technology standpoint, that is a great accomplishment. Certainly their success in attracting a market for these products is amazing. But that is where it all ends for Google.

Does Google really think CBS or any other radio group is going to turn over their prime inventory to them? We have all seen remnant sellers/brokers for 40 years and no one ever turns inventory over to those guys unless the market has tanked and the station is desperate.

For those of us who come from radio and television backgrounds, dMarc and what Google sees as the future of radio (and TV) advertising sales is a joke. Google aims to be a broker of air time. Nothing more, nothing less.

One thing could be rather easy to predict would be guys like Redstone selling all of their inventory to Google for about 50% more than what CBS radio could have every hoped to generate on their own. Lock in that 50% premium for about five years with annual rate increases along with a guaranteed payout and it becomes a home run for CBS. At that point Redstone could eliminate the entire sales organization, saving hundreds of millions, with no cost of sales over the contract term and every dollar going to the bottom line profit.

All Redstone would have to do then would be to figure out how to get rid of programming costs!

If I were Redstone, I make sure the payments from Google were all cash and not stock for this sort of deal!

Google can learn the hard way what it means to REALLY be an advertising driven business."


Posted by Charles Warner at 04:04 PM | Comments (0) | Print | Mail this entry

February 13, 2007

The Media Curmudgeon Responds

Neil Derrough and Bill Grimes have caught me in a squishy bit of reasoning. Good for them, because their comments force me to be more precise in my reasoning and language.

Neil suggested that Hilary Clinton’s recent turn to the center be checked against previous comments that are inconsistent with what she is saying now. He makes a good point that, “In that honesty has been an issue in the past few years, the character of the person may well be as important as it is that they happen to be a woman.” He is politely indicating and reasoning that Hilary is a liar and that being a liar means a person has poor character. He is also saying that character is a trait that is gender agnostic, a concept with which I agree.

Neil seems to be using inductive reasoning. From Wikipedia: “Induction is sometimes framed as reasoning about the future from the past, but in its broadest sense it involves reaching conclusions about unobserved things on the basis of what has been observed.” Inductive reasoning, or everyday reasoning, depends on patterns of repeated experience that predicts the future, which may or may not be true, rather than from deductively valid arguments. The common notion is that inductive reason proceeds from the particular to the general.

Bill Grimes also seems to be using inductive reasoning when he writes that “What is debatable is your assumption that because a person is a woman that she will be necessarily more compromising and inclusive in her decision-making and, therefore, a better leader.” He lists other traits that make a good leader, such as delegating authority better, groom more successful subordinates, being more tolerant of opponent’s views, and in general be less mean spirited than the Alpha males who have ruled so long. “But,” he writes, “do they accrue to a leader because of gender alone?” So far, so good. He is making the same point that Neil makes—that leadership is gender agnostic and that his inclination to vote for Hilary Clinton is not based on the fact that she is a woman but has “a lot to do with my belief that despite her often-exhibited prickliness she would seek the middle road on important issues.”

Bill then uses inductive reasoning to point out that Carly Fiorina, the ex-CEO of HP, was a woman and not good leader; therefore, not every woman is a good leader. He’s right. There are plenty of examples of autocratic, power-hungry, and mean-spirited female leaders. All we have to do is to look at Srimavo Bandaranaike of Shi Lanka or at Indira Ghandi or at Linda Wachner ex-CEO of Warnco in addition to Carly Fiorina.

Deductive reasoning, on the other hand, proceeds from the general to the particular. I was using a fuzzy form of deductive reasoning to come to my conclusion that it’s time for America to have a female president to support a bias I have in favor of women as leaders. I think Neil Derrough used a form of inductive reasoning to support his bias against Hilary. In other words, both us reasoned backwards from our biases.

I have read several articles and books that indicate that, in general, women tend to be cooperative, are interested in establishing and maintaining relationships (often through compromise), are consensus building, are excellent listeners, and have a high degree of emotional intelligence. The research on the subject indicates that men tend to be competitive, aggressive, and more interested in winning than in relationships. Of course these are broad generalizations. One study I read indicated that these gender traits apply to about 60 percent of the female and male populations. Thus, I was hoping that the next president might be someone who is cooperative, consensus building, and relationship oriented, and the odds are six to four that those traits belong to a woman. I should have been more precise in my reasoning and language.

By the way, Ms. Fiorina probably came from the other 40 percent. Perhaps Hillary Clinton does, too; we’ll have to wait and see. We should observe her very carefully and decide if she has the traits to make her an effective leader in the current situation, or, rather, in the situation in 2008, when we vote.

Research and expert opinion on leadership indicate that effective leaders must adapt their leadership style to fit the situation. Sometimes, authoritative leadership is effective, at other times either an affiliative or a coaching leadership style might be more effective.

After learning more about Barack Obama, I’m beginning to think he might have more of the “female” stereotypical traits of cooperation, compromise, listening, and consensus building that I believe the country needs than any of the current candidates seeking their party’s nomination. Like Carly Fiorina, he might be in the 40 percent of atypical types.

Of course, if I flip flop from wanting a woman to supporting Obama, I will be accused of being a waffler or even a liar. Oh well, that’s blogging.

Posted by Charles Warner at 01:11 AM | Comments (1) | Print | Mail this entry

Bruce Braun [TypeKey Profile Page] at February 13, 2007 11:58 AM writes:

Hi Charlie-
Let's not intellectualize to much about women and leadership. At the end of the day, we are all more driven by emotion than fact-driven logic. How many of us make a final decision based upon our "gut"?

Predicting how anyone will act is problematic at best. Those of us who have gone through a divorce can testify they would never have predicted the kinds of behavior they experienced from their ex-spouse in that environment.

In reality, politicians are more predictable than others in our society. Their predictability is very basic: whatever it takes to obtain and hold onto power.

We have become big fans of the HBO mini-series, "Rome". Taking into consideration that the show is a drama and fictionalized, it is still based upon real personalities and actual events. What makes the show compelling are all of the political intrigues and power struggles. While watching the show, I cannot help thinking the only difference between then and now is the mode of dress: togas and suits. Not much else has changed, other than the public exposure by the press today of all of the antics.

What I do know is that I can depend upon Hillary and every other presidential aspirant to distance themselves from past behavior, votes and pronouncements their pollsters tell them will cost them votes in 2008. I know that everything we will be hearing from now until November 2008 from these people is pure bullshit. They are all like guys hustling a beautiful woman in a bar to leave with him. Just like the guy buying drinks for the woman,our leaders do the same with offers of free health care, social security reforms(meaning payouts will be larger in the future), social programs up the yazoo etc. If this were the guy in the bar, he would be taking money out of the woman's purse to pay for the drinks!

What we need as a nation is a lot different than what we want. Just as an indulgent parent spoils their child by trying to buy love through agreeing to any demand, not one member of the Congress or ANY presidential administration is willing to say NO to the voters. If they say NO, their little darlings might get upset and tell them they don't love them anymore! As any politician knows, if the voters don't love you, you won't get re-elected...or so they think.

Sorry Charlie, I can't get excited about Hillary about being presidential timber. Neither Hillary or Obama or any of the other announced candidates have EVER accomplished anything other than raising money to get elected. At least Rudy can point to his success as the U.S. Attorney and as Mayor of NYC.

Using race or gender as an voting criteria is political sop for those who can only identify with someone of their own race or gender. Some might even say that sort of criteria is a form of bigotry.

Politicians making "bold" pronouncements that they know they will never be able to accomplish or be held accountable for is not leadership. For senators, and congressmen, pronouncements are all they make. Every vote they cast is first evaluated by how it might be used against them in the next election and then by what their party leadership demands.

As our old friend, Bob McGroarty once said to me: Nothing is impossible as long as you don't have to accomplish it! Bob was talking about sales goals but he could have been talking about politicians.

Welcome to Rome!


Bill Grimes Comments

This is a thought-provoking "Curmudgeon" (as all usually are) and not just because a good Republican friend of yours was cited for his belief that Hillary might be an attractive presidential candidate because she may well be more compromising than she often appears. The main reason is, of course, that it seems impossible today to argue that women should not be represented in positions of leadership and authority in proportion to their approximate percentage of the population (51% I believe).

What is debatable is your assumption that because a person is a woman that she will be necessarily more compromising and more inclusive in her decision-making and therefore a better leader. From this thinking it easy to heap upon women many other desirable leadership traits. They would delegate authority better, groom more successfully subordinates, be more tolerant of opponents' views and in general be less-mean spirited that the Alpha males who have ruled so long. All desirable traits, but do they accrue to a leader because of gender alone?

Let's look at the recent sorry regime of Carly Fiona, the erstwhile chief executive of Hewlett Packard. There are a slew of examples that industry analysts would cite as failings of the once most powerful female CEO of a public company in the nation, if not the world. The most important of which was her decision to acquire Compaq, the large computer manufacturer, at a premium when it was apparent that computers had become a commodity (note IBM's sale of its ThinkPad division), her continuous abuse of company perks and her regal attitude to subordinates which were chronicled in a lengthy issue of FORTUNE magazine and, most important and very unfemale-like an illegal wire tapping of her Board of Directors' business and personal phones.

Did those misdeeds occur because Ms. Fiona was really a man or because a woman in a position of leadership and authority can be as ineffective, as arrogant and as non-compromising as a man? Assuming that it is the latter, we should--while recognizing that women historically have been viewed as more compromising (maybe,ever been divorced?) more inclusive of subordinates, tolerant of opponents' viewpoints and gentle in interpersonal relationships--withhold these judgments until we have had the opportunity to evaluate the performance of more women in positions of power.

Which is to say that my current inclination to vote for Mrs. Clinton has little to do with the fact that she is a women and a lot to do with my belief that despite her often-exhibited prickliness she would seek the middle road on important issues. The need to please--a trait often associated with her husband--has become in my mind a more desirable one for politicians to acquire and exercise. I think that somewhere in that devious, cunning female Hillary that trait exists and her ambition to become president may be the driver to release it.

Posted by Charles Warner at 01:01 AM | Comments (0) | Print | Mail this entry

Neil Derrough Comments

Charlie - Before you and your Republican friend are swayed by Hilary's recent turn to the center, I would check many of the on-the-record comments she has made not too long ago that are inconsistent with what she is saying now. In that honesty has been an issue in the past few years, the character of the person may well be as important as it is that they happen to be a woman.

Posted by Charles Warner at 12:57 AM | Comments (0) | Print | Mail this entry

February 11, 2007

Ramblings About Women Leaders

Today, Harvard announced that historian Drew Gilpin Faust would become its first female president as the successor to Laurence Summers, who had what the NY Times referred to as "tumultuous five-year tenure."

Bully for Harvard. The NY Times wrote that "Faust, 59, recognized the significance of her appointment.

"'I hope that my own appointment can be one symbol of an opening of opportunities that would have been inconceivable even a generation ago,'" Faust said at a news conference on campus. But she also added, "I'm not the woman president of Harvard, I'm the president of Harvard.'" Now, half of the eight Ivy League schools have female presidents. It seems these prestigious institutions of higher learning and knowledge have discovered something from which the rest of the country could benefit--that it's time for women to take over the leadership of our important institutions.

As I wrote in my December 9, blog, it's time for the country to elect a woman president. I wrote, "My point was that ordinary U. S. citizens are ready to vote for a woman for president because as a country we are ready for cooperation and compromise, and a woman president couldn’t possibly screw up the country any worse than a bunch of old white men have in the last couple of years."

I think it's also important to note that even though half of the Ivy League colleges are smart enough to hire women to lead them, no major media company has a female CEO. Could it be a coincidence that no media company appeared in the FORTUNE list of the best companies in America to work for. Media companies need a woman's touch, and don't mean baking cookies, I mean a human touch in which people count and there is an emphasis on cooperation and compromise.

Pepsi announced a nice 15 percent increase in earnings recently at the same time that Coca-Cola is stumbling and where a top female marketing executive recently left, ostensibly because she didn't get promoted due to a male-oriented culture.

When are voters going to learn?

In the December blog I also wrote about Hilary Clinton that "I don’t think she’s electable—too much baggage, too many people who hate her, and because she waffled on Iraq and other things." Well, she's looking stronger than I thought at that time. Especially compared to all of the Republican candidates so far, especially Rudy Giuliani. Women won't like Rudy, who didn't stand by his wife--left her for his girl friend in a messy, well covered affair. Hilary stood by her man in an almost impossibly difficult situation.

Also, my wife Julia and I had dinner a few weeks ago with a dear friend who has been an ardent Bush supporter, ingrained conservative Republican, and Hilary hater. He shocked us by saying that he might vote for Hilary because she as shed her liberal image and moved much more to the center. "She'll keep her eyes on the polls and listen to what the public wants, which is in the center and out of Iraq."

If she can turn around this rock-ribbed Republican, Hilary might be able to turn around those who dislike her. Let's hope, because America, like Harvard, needs a woman as president.

Posted by Charles Warner at 07:54 PM | Comments (2) | Print | Mail this entry

Media Curmudgeon [TypeKey Profile Page] at February 21, 2007 11:16 PM writes:

Jim - You are correct, of course, about the three women CEOs. I would sumbit that I was referring to "major media companies." Ann Moore is CEO of a division of Time-Warner, which is run by men (Parsons and Bewkes) and Cathleen Black is CEO of a division of Hearst, which is run by a man. I overlooked Marjorie Scardino of Pearson, so I owe you a mea culpa.

Let's hope Cathleen Black becomes CEO of the parent Hearst Corp. I don't think it's in the cards for Moore to succeed Dick Parsons at AOL.

Maybe Sumner Redstone will turn over Viacom and/or CBS to his daughter and Murdoch will do the same.


ParsonJim [TypeKey Profile Page] at February 12, 2007 02:00 AM writes:

You're wrong about the media companies.

Ann Moore is CEO and Chairman of TIME.
Marjorie Scardino is CEO of Pearson.
Cathleen Black is CEO of Hearst Magazines Division.

Do your homework.


February 06, 2007

Corporate Reputations and The Media

In sort of a follow up to my 1/15/07 posting of "Google Yes, Media No," in which I noted that there were no media companies in the FORTUNE survey of America's Best Companies to Work For, I recently read that media companies did generally not rank well in the Harris Interactive/Wall Street Journal poll of the world's best and worst corporate reputations. No surprise here.

An article by Ronald Alsop titled "How Boss's Deeds Buff A Firm's Reputation" with the sub-head "Gates's Philanthropy Puts Microsoft Atop Yearly Survey of Best, Worst Companies" stated that "...Mr. Gates's personal philanthropy boosted the public's opinion of Microsoft."

Here some top-line results of the survey:

Popularity Contest
A look at how a selection of companies fared on this year's Reputation Quotient survey, which evaluates the public's perception of a company.

60 companies ranked in 2006 Rank from 2005 to '06

Best_____________________________Biggest increase
1 Microsof_______________________________1 Microsoft +6
2 Johnson & Johnson_____________________39 Merck +6
3 3M____________________________________22 Apple +5

Worst_____________________________Biggest decrease
58 Comcast_______________________________57 General Motors -19
59 ExxonMobile___________________________55 Ford Motor -18
60 Haliburton____________________________47 McDonald's -12

If you were to look at the entire list of 60 companies, you'd see that there were only three media companies (I'm not including General Electric, which owns NBC Universal): Walt Disney (#13), Time Warner (#48), and Comcast (#58).

Remember that the study was done among ordinary people and not among Wall Street investors, thus it was about perceived reputation, not performance. Why did Walt Disney do so well and Time Warner and Comcast do so poorly?

I think Walt Disney did well because it has always done well in these types of surveys, even before it bought the ABC television network and ESPN. I think its reputation rests largely on its theme parks. People, and especially kids, have a great time and are treated well at Disneylands across the globe.

I think Time Warner and Comcast did poorly because people perceive these companies primarily as cable operators that keep raising their cable bills and give them generally poor service. Like ExxonMobile and the hated Haliburton, I believe that people think cable companies are greedily raking in unconscionable profits (regardless of reality). Cable companies are legal monopolies (only one cable company franchise per market), and, thus, often act and price themselves like monopolies, which is typical of firms without direct competition.

I think that people like to watch TV and read magazines--the products of big media companies--but don't much like big media companies. There is definitely a dislike of "the media" and "journalists" in America today. Maybe the American public is subconsciously aware that they are addicted to the opiate of entertainment television and celebrity magazines and hate the pusher, not the dope. They blame the messenger and deny their addiction.

But prime time entertainment television, like most opiates, requires stronger and stronger doses to be effective and soon addicts crave a new excitement, a new hit. Escape entertainment is like other forms of dope—people can never get enough and are always looking for something new. They can never escape enough, or for that matter at all. Reality is not a hit show, reality is real life and you can’t escape it alive. So, entertainment and news addicts are looking for new media, new forms of entertainment and information, and a new form of escape and excitement.

Of all people, Rupert Murdoch seems to understand this audience that is addicted to big media entertainment and how it is changing. In a recent speech at the World Economic Forum in Davos, Switzerland, the chairman and CEO of News Corp. said that big media companies and governments ultimately cannot stop or reverse their reduced agenda-setting power that has been affected by the Internet and digital media. Murdoch said that media conglomerates have less influence among the continued explosion of news websites, blogs, and podcasts. He also said that the big media is “put right immediately” these days when making mistakes and, thus, have less power.

The theme of the World Economic Forum was “The Shifting Power Equation,” and Murdoch’s speech fit in perfectly. Murdoch should understand that the media has little power; after all, his NY Post newspaper and Fox TV news channel have vigorously supported Bush, Cheney, and the war in Iraq, and they have had little effect on public opinion.

Add to the “kill-the-pusher” syndrome the fact that big media companies generally have bad reputations and are lousy places to work, no wonder they have less power than ever.

Posted by Charles Warner at 12:42 AM | Comments (0) | Print | Mail this entry