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Head of CBS Resigns; Paley Again Chairman

September 11, 1986|PAUL RICHTER | Times Staff Writer

NEW YORK — In a dramatic management shake-up, Thomas H. Wyman, beleaguered chairman and chief executive of CBS, resigned from the troubled network late Wednesday and was temporarily replaced by company founder William S. Paley and Laurence A. Tisch, CBS' largest shareholder.

The announcement, made by network news anchorman Dan Rather during his Wednesday evening broadcast, capped a tense eight-hour board meeting at CBS headquarters here. Paley, 84, will resume, temporarily, the chairman's duties he gave up in 1983, and Tisch, 63, will act as chief executive and head a new management committee to run the network while the board searches for a permanent replacement for Wyman.

Remained Consultant

Broadcast pioneer Paley had controlled CBS for more than half a century before his retirement and has remained a consultant, director and chairman of the executive committee in recent years.

The board said in a statement that it was accepting with "great regret" the resignation of Wyman, 56, a former food-industry executive who was the company's chief executive for six years and recently had led it through a quagmire of slumping ratings, layoffs and takeover attempts.

Some outsiders were quick to label the move a firing forced by Tisch, the New York investor who also heads Loews Corp., a hotel, tobacco and financial services firm. Tisch and his firm have acquired nearly 25% of CBS' stock in recent months and had threatened to buy more.

The resignation shows that "Tisch is now in firm control of the company," said Barry A. Kaplan, a broadcasting analyst with the New York investment bank of Goldman, Sachs & Co. "I would not be surprised to see additional departures (of other CBS executives)."

In a statement issued by CBS, Tisch pledged that he would hold office "only during the brief transition period" until a new chief executive is chosen.

"I think the main job now is to bring the company back to the status and heights that Mr. Paley established," Tisch told reporters outside CBS headquarters Wednesday night.

He added that he felt "fortunate to have Paley as my partner and mentor in the task."

The change of command culminates weeks of speculation that Wyman was about to clean out his desk at CBS' headquarters in Manhattan. Several dozen reporters and cameramen--including those from the rival ABC and NBC networks--had camped out in the CBS lobby Wednesday, expecting an announcement of Wyman's ouster or news that Tisch had increased his stake in the company from the 24.9% of stock he now holds.

Expectation of a showdown had grown in recent weeks amid reports that Tisch had become dissatisfied with Wyman's handling of the network's problems. For his part, Tisch had refused to sign a statement that he would not accumulate more than the 25% stake, as he had pledged last year when he began buying stock as a "friendly" investor.

Invited to Buy Stake

Tisch had been invited by Wyman and Paley to purchase a stake to act as an ally of the board after unsuccessful takeover bids by cable-TV entrepreneur Ted Turner, Sen. Jesse Helms (R-N.C.) and oilman Marvin Davis.

But Tisch's refusal to say he would not accumulate more than 25% by purchasing shares on the stock market raised fears that he might be trying to gain control of the company without making a tender offer that would pay CBS shareholders a premium for their stock.

Sources within CBS said that Tisch and Paley, who own more than 30% of the network's stock between them, had joined several other shareholders to seek Wyman's ouster.

Wyman unwittingingly sprang "a trap" for himself, in the words of another industry source, when he tried to cancel an informal dinner meeting of CBS directors Tuesday evening, the night before the formal board session. Neither Wyman nor Tisch attended, but most of the directors chose to gather anyway and discuss the mounting management crisis.

Wyman appeared to have a slight margin of support when the board convened Wednesday, according to this source, who is close to certain board members and who requested that his name not be used. However, the support for Wyman faded early in the session when it became clear that both Tisch and Paley wanted Wyman's resignation, the source said.

Paley said late Wednesday that he was "very pleased with what has happened." In a statement issued by the company, Paley said Tisch has "proven his extraordinary ability as a businessman" and "also shares the values and principles which have guided CBS."

Big Stock Buyback

CBS has recently faced the tasks of making cuts in all divisions to pay off debts that reached $1.45 billion late last year after a huge stock buyback that was intended to reduce the risk of a takeover. But it has faced another problem, along with other networks--the recent decline of advertising revenues because of lower inflation and competition from other advertising media, such as cable TV.

Because of this, some analysts believe Wyman has been a victim of forces beyond his control.

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