Levin says the 'R' word: Retirement
Still determined to assure continued revenue growth and cash flow
By John M. Higgins -- Broadcasting & Cable, 4/8/2001 8:00:00 PM
In what seems to have been a significant change in tone, AOL Time Warner CEO Jerry Levin acknowledged last week that he will retire from the company. in due course.
Speaking at the Salomon Smith Barney and BROADCASTING & CABLE'S The Big Picture conference in New York Tuesday, Levin said he won't be like "my good friends Sumner Redstone or Rupert Murdoch," meaning that "you will not have to carry me out of AOL Time Warner."
But the former Time Warner Inc. chairman said that he won't leave until he sees through the integration of the Internet and TV businesses that drove AOL to buy Time Warner. "I will not give out a date," said Levin, 61.
That's not earth-shattering, but it's the first public discussion by Levin of the issue of long-term management of AOL. Co-COO Bob Pittman, associates say, is anxious to run the combined companies solo. AOL Chairman Steve Case said that, when Levin hands over the reins, "it won't be to me" but to some other inside executive.
Case and Levin also stood by their assertions that, despite the recession, AOL will generate 12% to 15% growth in revenue, to $40 billion, and a 30% increase in cash flow, to $11 billion.
They set those goals last summer, before ad sales turned so sour, to bolster the sinking price of AOL's stock. With every other media company missing its targets, many Wall Street executives believe AOL will miss its goals, as well.
"We're on target," Levin said, reiterating the company's new recession mantra that AOL Time Warner generates a huge percentage of its sales through subscriptions to the AOL online service, Time Warner Cable or magazines. "It's a company that revolves around 130 million subscriptions," Levin said.
Indeed, ad sales take the first hit in a bad economy, but investors taking comfort in this would presume that a recession won't eventually crush subscriptions, as well.
AOL has no immediate plans to raise its $21.95 monthly subscription fee, Case said, adding that any increase would be not driven by short-term financial goals but "because there has been so much value added."
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