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HBO Anger Management

5/11/2007 08:00:00 PM Eastern

The swift downfall of HBO chief Chris Albrecht brings so much about the state of the business into stark relief.

Albrecht was busted in Las Vegas for suspicion of assaulting his girlfriend in an incident after the high-profile, network-sponsored Oscar de la Hoya-Floyd Mayweather fight.

When news of the arrest surfaced, industry cynics were soon outlining the inevitable mea culpa substance-abuse plea—in Albrecht's case, alcoholism—followed by a stint in rehab.

Eventually, there would be a chastened return to the corporate womb. The man who led his network to a renaissance—The Sopranos, Curb Your Enthusiasm and The Wire were on his watch—and seriously upped the quality of series television would weather this ugly incident.

Wiser minds realized that times have changed too much for that scenario to play out, especially when you're part of a publicly traded company. A perpetual news cycle pounds away at such scandal and can immobilize a company. HBO needed to all-too-quickly ponder the same questions Don Imus forced CBS and MSNBC to face: What is just, and what makes sound business sense? In the current climate, the gap between public relations and public humiliation gets narrower all the time.

Some inside the Time Warner family say that, after the nasty May 6 altercation, Albrecht was out—even if news hadn't surfaced of his ugly 1991 incident. Back then, HBO paid north of $400,000 in a settlement to a female subordinate Albrecht was romantically involved with who alleged he had shoved and choked her at the office.

Even in the in-bred, family environs of HBO—most senior executives have worked with Albrecht for 15 years or more—he had become a liability. Not even Time Warner No. 2 Jeff Bewkes, who once held Albrecht's job and selected him as his successor, could save the HBO CEO from himself.

In the Darwinian world of entertainment, no sooner was Albrecht toast than the guessing game of who would replace him had begun. Leading the list is COO Bill Nelson, who has stepped in as acting CEO. Executive VP Richard Pleplar; Sales, Marketing and Business Development President Eric Kessler; and General Counsel Hal Axelrod have all been named. Time Warner Executive VP, Administration, Pat Fili Kushel, who has held senior slots at ABC and Lifetime, has been mentioned as well.

Unlike Albrecht, none are programmers, so the network might have HBO Entertainment President Carolyn Strauss or HBO Films President Colin Callender oversee the duties Albrecht kept when he moved up in 2002. Kevin Reilly's name has been discussed, but the NBC entertainment president recently signed a new deal that would be hard to break. Newsweek Online floated ex-Viacom CEO Tom Freston; he, too, could run the place.

All this talk is good for HBO: The sooner one moves on, the better, it seems. And it helps veil that other, inevitable open-ended question: What becomes of Chris Albrecht?

A raft of bold-faced names have come to his defense. Endeavor Agency founder Ari Emmanuel and Real Time host Bill Maher believe he deserves help and forgiveness, not exile from his kingdom. At least one media giant has thrown Albrecht a lifeline—a lucrative independent-production shingle—for when he's ready to return to work.

Inside Time Warner, there's concern they'll soon have to compete against the guy who built HBO into such a money machine. HBO had an estimated $1.2 billion in net income on $3.4 billion in revenue last year, according to SNL Kagan. Wouldn't Showtime love to have a rehabilitated Albrecht in charge?

In a different era, Time Warner brass would have given Albrecht an eight-figure production deal to keep him away from competitors. But think about it: Rewarding drunken violence against women with millions of dollars would be preposterous, not to mention crippling. Considering the potential fallout, such a move is no longer a permissible option.

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bcrobins@reedbusiness.com

 

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