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SHAKE-UP AT AOL

Two Parts of a Whole

New team could lead to a management culture that prevailed before the merger

July 19, 2002|SALLIE HOFMEISTER | TIMES STAFF WRITER

The two veteran media executives Jeffrey Bewkes and Don Logan--named Thursday as deputies to AOL Time Warner Inc. Chief Executive Richard D. Parsons--possess what one colleague describes as "ego-less maturity," a rarity in the self-aggrandizing entertainment industry.

"Both of them are very low-key but very talented," said Jessica Reif Cohen, an analyst at Merrill Lynch.

Bewkes, 50, who has spent 23 years at Home Box Office, becomes chairman of the new Entertainment and Networks Group. He will oversee HBO, Warner Bros. Studio, New Line Cinema, the WB Network, Turner Broadcasting Systems Inc. and Warner Music. These businesses are home to CNN, TBS, Cartoon Network, and recording artists such as Madonna and the Red Hot Chili Peppers. Logan, 58, who had overseen the world's biggest magazine group, joined Time Inc. as president in 1992. He now becomes chairman of the newly formed Media and Communications Group, made up of struggling Internet giant America Online; Time Inc.; Time Warner Cable, the nation's second-largest cable system; the AOL Time Warner Book Group; and the Interactive Video unit.

Several AOL Time Warner executives said that in contrast to departing Chief Operating Officer Robert W. Pittman, Bewkes and Logan are under-the-radar managers who shy from the media spotlight and delegate power to their lieutenants.

The management overhaul leaves Chairman Steve Case, one of the architects of the merger, without his closest ally. The new structure could lead to a decentralized management culture that prevailed at Time Warner before the AOL merger last year, according to AOL Time Warner insiders.

Media executives applaud Parsons for matching Bewkes' and Logan's management styles to their new assignments.

"Dick's got them lined up in the jobs that best suit each of their styles," said Richard Bressler, chief financial officer of media rival Viacom Inc. and former finance chief of Time Warner. Bewkes "has the ability to build consensus and has more sensitivity for the artistic community," Bressler said. "When I was at Time Warner, we all assumed he'd run the company one day."

In contrast, Logan is more like Bressler's new boss, Viacom's take-no-prisoners president, Mel Karmazin. "Don would rather go fishing than walk down the red carpet at the Oscars," Bressler said. "Don is the finest operating executive within Time Warner. When you left the room, there was no ambiguity as to how you would be judged or the consequences if you didn't live up to your promises."

Other rival media executives also were impressed by Parsons' choices.

"These are the two best executives in the company," said Peter Chernin, chief operating officer of rival News Corp. He credited Logan with launching such new magazines as In Style and Teen People during one of the worst advertising climates in decades in the publishing business.

He said Bewkes has proven his skills at both the creative and financial sides of the business, and had moved HBO beyond offering just theatrical and TV movies by expanding into original series, such as "The Sopranos" and "Sex and the City."

Bewkes rose from finance chief to chief executive of HBO in May 1995, after the ouster of Michael Fuchs. He joined HBO in 1979, in the fledgling network's sales and marketing department.

Still, some analysts and industry executives wonder whether the new AOL Time Warner management team obscures the lines of authority.

"With three or four people at the top, it's ambiguous who is really in charge," one industry source said.

Others questioned where the killer instinct is at the top of AOL Time Warner's management, which has to wrestle with the tough assignment of turning around America Online and restoring the parent company's credibility on Wall Street. Many investors have wondered for months whether Parsons is too laid back for the CEO job.

Yet several AOL Time Warner insiders said the executive trio would help calm the waters. And they applauded Parsons for promoting two highly sought-after executives.

Several years ago, Bewkes turned down the opportunity to head up Warner Bros. Because he was unwilling to move to Los Angeles. More recently, he was asked to take over Time Warner Cable, according to company executives. Several years ago, News Corp. considered luring Bewkes to become its No. 3 executive.

In an internal company memo distributed Thursday, Parsons praised Bewkes' performance at HBO, where he boosted its compound annual cash flow by 16%. Parsons also acknowledged HBO's unprecedented number of Emmys and Golden Globes in recent years. The channel's financial performance was lumped together with the company's other cable networks and the WB networks.

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