Two grilled chairmen, to goAOL Time Warner's Case, Disney's Eisner fight for their corporate lives 9/22/2002 08:00:00 PM Eastern
The swagger has been beaten out of the storied heads of two of the largest media conglomerates, as Steve Case and Michael Eisner shift from merely reviving their slumping companies—AOL Time Warner and Walt Disney Co., respectively—to actually keeping their jobs. Both executives are shuffling fast to shore up what had been unquestioned support from key board members who, say industry execs, are mulling a little regime change of their own.
An AOL spokesman said Case "is the company's chairman and he will remain so." The central topic at a board meeting last week, the spokesman said, was operations at the AOL Internet division. But no doubt, Case is the No. 1 topic at the company.
Eisner may take the fall simply for Disney's many operating problems at ABC, theme parks and part of its cable division.
But Case's situation is different. Sure, he is taking heat for the slump in ad sales, weak subscriber growth and investigations into the odd games the old AOL played in accounting for online advertising deals.
But insiders said his real problem is concern by executives and board members from the old Time Warner that Case will second-guess too many decisions that CEO Richard Parsons and his lieutenants are making. "The new management team wants free rein to do what they think needs to be done," said one industry executive familiar with the dispute.
Eisner has taken to wooing investors and analysts by admitting errors. The biggest mea culpa, according to Wall Street execs who met with Eisner, was conceding that he badly overpaid for Fox Family Channel, which cost him $5.3 billion in cash (at a time when everyone else was doing deals with their inflated stock prices). "He admitted that three times," said one analyst.
Eisner also said ABC radio stations are not central to Disney's operations but stopped short of saying he would sell them. ABC is in no rush to buy TV stations, he added, calling local duopolies "overrated."