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Lack's Exit Ends a Power Struggle

January 11, 2003|Sallie Hofmeister | Times Staff Writer

For NBC, the resignation of President Andrew Lack means not so much the loss of a leader as the end of a power struggle that was beginning to take its toll on the broadcast giant.

It was no secret that Lack and his boss, Chairman and Chief Executive Bob Wright, had been in a tug of war over daily control of the General Electric Co. unit.

Lack's sudden departure for Sony Music returns authority entirely to Wright -- reviving a management structure NBC knew for 16 years before Lack, former head of the news division, was made president and chief operating officer in May 2001.

"This is good for Andy, good for Bob Wright and good for GE," retired GE Chairman John F. Welch Jr. said Friday. "There were two good people but only one job."

Company executives say there is no immediate plan to replace Lack.

Lack is credited with turning around NBC News during his eight-year tenure at the division. He was promoted to president of the television conglomerate largely at the insistence of Welch and without Wright's blessing. The idea, in part, was to let Wright devote time to additional duties as vice chairman of GE.

In that role, Wright was supposed to help Welch's successor, Jeffrey R. Immelt, with his own job transition. But Wright proved unwilling to relinquish his grip on day-to-day matters at NBC, setting up an unhealthy rivalry with Lack, say people familiar with the situation.

Executives in the firm's top ranks aligned into Wright and Lack camps, NBC sources said. According to several people, the tension led to decision-making paralysis at a time when certain assets needed urgent attention.

Viewership at the company's CNBC financial channel declined in the wake of the stock market collapse, for instance, and MSNBC began losing badly in the news wars against CNN and Fox News.

Many within NBC's ranks continue to blame Lack for difficulties at MSNBC, which he launched in 1995 as a 50-50 partnership with Microsoft Corp. Yet Lack is credited with taking NBC News from a money-losing operation to profitability by cutting costs, as well as creating new revenue streams.

"When Lack joined NBC, the expectation was that news was always going to lose money," said Tom Rogers, a former NBC executive who now is chief executive of Primedia Inc. "He's both a creative and a business executive, and it's rare to find people who straddle both worlds."

In an interview Friday, Lack said he was disappointed by the performance of MSNBC, but added that all channels have ups and downs.

He acknowledged that "Bob and I had our awkward patches," but said that's not why he left.

With Lack gone, according to some observers, the pressure will be on Wright, 59, to name a new heir apparent. Within NBC, the likely candidates are believed to be NBC Entertainment chief Jeffrey Zucker, station head Jay Ireland and NBC television network President Randy Falco.

NBC sources said Zucker would get control over Telemundo, the Spanish-language network recently acquired by NBC. Lack had overseen the unit. Zucker, however, will not assume new responsibilities for the news division.

NBC News President Neal Shapiro now will report directly to Wright, as Lack did as president of the news division before his promotion. The two already speak often and have a good relationship that has grown even stronger in recent months, according to NBC sources.

Some said the new structure would eliminate the confusion of having two bosses. Less clear is what effect Lack's departure will have at MSNBC, whose president, Erik Sorenson, had a close relationship with Lack.

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Times staff writer Elizabeth Jensen contributed to this report.

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