The Big Picture

Patrick Goldstein and James Rainey
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In Hollywood, succession is a messy business

April 1, 2011 | 12:31 pm

 In corporate America, when you're done, you're done. Even the fabled superstar CEO Jack Welch agreed to retire at 65, allowing General Electric to hold an orderly bake-off between a trio of strong contenders before handing the  job over to Jeffrey Immelt.

 But in the entertainment business, the top talent rarely plays by this rule book. Oversized egos and volatile personalities often get in the way, as does the fact that several of the biggest companies are still family run and controlled. It’s hard for a board to tell Rupert Murdoch, the indomitable octogenarian who controls News Corp., to step aside for the younger generation.

That was reinforced this week when News Corp., which operates like a Middle Eastern monarchy, named Murdoch’s son, James, as its deputy chief operating officer. The move only intensified speculation that the 38-year-old Murdoch is  his father’s successor, a decade after James’ older brother Lachlan relinquished that title, unable to navigate the political waters of News Corp.’s top management.

This week, another Hollywood succession battle began in earnest. Time Warner chief Jeff Bewkes  pushed out longtime motion picture group chief Alan Horn, even though under his leadership, the studio has enjoyed record profits and remarkable stability. That clears the way for Horn’s successor, Jeff Robinov, who took charge on Friday, to step into a three-way race to become studio chairman when Barry Meyer departs in 2013.

Bewkes insisted it was time to make room for  Robinov, who will now oversee the studio’s massive movie production and marketing machinery. When I spoke to Horn the other day, he was trying to play the part of a good soldier, but it was clear that he believed, at age 68, he still had plenty of gas left in the tank.

Meyer and Horn had originally told Warners’ staffers they would be going out together in 2011. But Meyer never had a clear successor, while Horn had carefully groomed Robinov to take the film studio reins. So Meyer is staying on while a trio of younger guns--Robinov, television president Bruce Rosenblum and home entertainment president Kevin Tsujihara--compete for his job.

Warners insiders say Bewkes has simply delayed the inevitable, since once someone becomes the preferred candidate, the others will likely defect to an industry rival. No matter how much Bewkes says that he won't tolerate  infighting among the three men, the whole set up is fraught with peril, since the contenders have very specialized strengths in very different areas of the Time Warner universe.

To see how messy succession plans can become, you only have to look at Universal Music, the record industry's leading  label. Vivendi, the French media conglomerate that owns Universal, had been trying for years to persuade longtime Universal Music chief Doug Morris  to name a successor. Finally, early last year, Universal announced that Morris would step aside, allowing international division chief Lucian Grainge to become chief executive this January. Until then, he would share responsibilities with Morris, who had made Universal the most profitable and most stable record company in the troubled music business.

But in the midst of what was suppose to be an orderly transition, Morris, 72, decided his career wasn’t over. In December, word leaked out that Morris had been in secret negotiations with Universal's arch-rival, Sony Music, to become  chief executive. After considerable turmoil, Morris was granted an early release from his contract, allowing him to assume power at Sony in July.

Of course, when it comes to botched succession plans, nothing can top former NBCUniversal chief Jeff Zucker's ill-fated scheme to have Conan O'Brien take Jay Leno's job hosting “The Tonight Show.” Not wanting to lose Leno to a rival network, Zucker moved him to prime time, which was a disaster, resulting in lower ratings not only for Leno, but  for O'Brien and NBC stations’ nightly newscasts. After a firestorm of criticism, Zucker gave Leno his old job back, prompting O'Brien to leave with a $45 million severance package. Now O'Brien hosts a nightly show on TBS and Zucker is out of a job, having taken the hit for mishandling some of NBC's most precious talent.

It's little wonder that so many showbiz entities fumble their succession plans, since any effort to gently ease out the Big Kahuna and make room for a Young Gun is a trade-off between short-term continuity and long-term growth potential. Having enjoyed bigger-than-life careers, the giants of show business rarely recognize their own mortality. Even in his 80s, after he'd sold Universal to Matsushita, its chief, Lew Wasserman, never wanted to pass the torch, be it to his No. 2 man, Sid Sheinberg, or a new owner.
Much of the instability at Disney in the 1990s was due to CEO Michael Eisner's unwillingness to cede any real power to Jeffrey Katzenberg, which not only cost Disney a wad of cash after Katzenberg's departure, but ultimately created a formidable competitor in the form of DreamWorks Animation. It later took a shareholder vote to convince the Disney board that Eisner himself needed to retire.

Viacom has long been a studio in turmoil, largely because Sumner Redstone, 87, has fallen out with a stream of trusted lieutenants who were viewed as potential successors. Frank Biondi, Mel Karmazin and Tom Freston were unceremoniously ousted by Redstone, who rules Viacom with little regard for polite corporate governance. When Business Week once asked Redstone what his succession plan was, he answered: “That's a good question. As [cable mogul] John Malone [once] said to me, 'Some of us are going to die, Sumner, but you're never going to die, so you don't have to have a succession plan.' That's my answer.”

People in show business have an inordinate capacity for self-deception. This is especially true of older men who, having hired personal trainers and wooed younger wives, see themselves as ageless wonders. After working so many long hours and making so many difficult decisions, they are married to their jobs, their corporate identity having merged with their personal psyche. It's why many self-made moguls have ended up selling their company, as Ted Turner and Lew Wasserman did. Grooming a successor is a perilous psychological proposition.Tycoons are loathe to pick a young successor who might fail, or worse, do a better job of running the show than they did.

Ultimately, youth must be served, whether it’s in showbiz or in sports, where the New York Yankees recently concluded a contentious contract negotiation with the team's aging icon, Derek Jeter, who will soon have to make way for a younger shortstop the way Horn and Morris had to step aside for a new top executive. No one wants to be like Bret Favre, still trying to be the star attraction after his skills have largely eroded.

Still, it's hard to let go. If anyone handled it well, it was Horn, who told me, “At the end of the day, I'm an employee. It wasn't my decision to leave. But I did my best to prepare Jeff Robinov. He's 52 and it's his time to run things. I just wanted to make a graceful exit.”

Unfortunately, Horn is the exception. In showbiz, most of the people who've enjoyed the rarefied air at the top of the heap never want to leave center stage.

--Patrick Goldstein

 

 

 

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