Media Giants Set for Sea Change

NEW YORK -- Aging executives, troubled businesses and the emergence of new technologies have set the stage in 2003 for a sea change among the top management of the world's five largest media companies.

While some of those companies have already seen changes, media insiders are expecting a new wave. They say 2003 will give some rising stars with a crucial grasp of digital technology and its impact on media in the Internet age a chance to climb farther up the corporate ladder.

"It's already been presaged this year with the changes at Bertelsmann, AOL Time Warner and Vivendi. The cracks are on the wall of the dam, and the water is about to break through," said Stephen Unger, managing partner at executive placement firm Heidrick & Struggles.

Media watchers are looking for signs of retirement plans from two of the world's leading media moguls -- Viacom Inc. chief executive Sumner Redstone, 79, and News Corp. head Rupert Murdoch, 71 -- which would open up a wave of changes at the top.

In addition, Walt Disney Co.'s board and shareholders have been waiting for a sign of a successor for embattled Michael Eisner, the 60-year-old chairman and CEO, who has been blamed for some of the company's shortcomings.

Meanwhile, media insiders said there could be more executive musical chairs at Vivendi Universal, the debt-laden French media group, and AOL Time Warner Inc., the world's largest media group, which is beset by accounting probes and a slowdown at its America Online unit.

If the new teams headed by Jean-Rene Fourtou at the French firm and Richard Parsons at AOL Time Warner cannot engineer turnarounds, there could be more changes, the insiders said.

Waiting in the wings are executives who have been making their mark in entertainment and technology.

Those who could see their stars keep rising include MTV Networks chief Tom Freston, Steve Burke, president of cable TV's Comcast Corp. and Jeff Bewkes, who was recently elevated to a top deputy spot at AOL Time Warner.

Steve Jobs, chief executive of Apple Computer Inc. and Pixar Animation Studios Inc, is also a contender for a top job in the sector, media insiders said.

Industry watchers said these young executives have a strong knowledge of digital technology and its impact on media in the Internet age that is so critical to the future.

The last time the industry was this roiled by executive ebb and flow was 1984 when Disney head Eisner, Dreamworks' Jeffrey Katzenberg and USA Interactive chief Barry Diller left Paramount, opening the floodgates for change, insiders said.

As AOL Time Warner's new team addresses a deflated stock price and investor backlash, some rising stars are drawing attention, such as former HBO head Bewkes.

Bewkes, who helped bring in shows like the award-winning "Sex and the City" and "The Sopranos" at HBO, is now AOL Time Warner's chairman of networks and entertainment group. One media insider described him as well-liked and outspoken, but in a "constructive way."

Also in the wings is Patricia Fili-Krushel, a former ABC television network head who is now an executive vice president at AOL Time Warner and a close adviser to Parsons.

"She has great judgment with people and is a sound businesswoman," one insider said.

Experts also see the potential for change at Vivendi's Universal Studios and Universal Music Group, which Fourtou is expected to sell or spin off, perhaps as early as the first quarter of 2003.

At Disney and Viacom, where some high-level succession issues appear to have cleared up in recent months, industry watchers said wildcard candidates could well surface in 2003.

"Whether or not there will be a lot of changes in the media, executive landscape will largely depend on what happens at two companies: Viacom and Disney," said James Citrin, head of Spencer Stuart's global technology, communications and media practice.

At Disney, Eisner has lacked a clear line of succession for years but recently suggested current president Bob Iger, 51, as a possible replacement. Industry insiders, however, expect an outsider.

Viacom has a strong No. 2 in president Mel Karmazin for when CEO Redstone retires. Karmazin's contract is up for renewal and despite reports of rancor between him and Redstone last year, he is widely expected to sign a new contract.

News Corp.'s Murdoch has made it clear he wants leadership to stay in the family, with son Lachlan as the heir apparent. The media mogul has also indicated that his No. 2 Peter Chernin would run the company if Lachlan is not yet ready.