Wright Zeroing In on Key Positions

Oct 13, 2003  •  Post A Comment

Four executives-three of them from NBC-will play big roles in the completion of the $14 billion merger of General Electric’s NBC and Vivendi Universal Entertainment and are likely to figure prominently in the newly merged company as well.
In the wake of the signing of the definitive agreement last week that will create NBC Universal, NBC Chairman and CEO Bob Wright described NBC Television Network Group President Randy Falco, NBC Entertainment President Jeffrey Zucker, NBC Television Stations President Jay Ireland and VUE President Ron Meyer as “principals” in the newly created NBC Universal. Mr. Wright said that Messrs. Falco, Zucker and Meyer were the ones most affected by the merger.
While he declined to describe each executive’s exact role and responsibilities, stressing that many of the details of who will be in charge of what will have to wait until after the deal closes sometime in the first half of 2004, Mr. Wright’s discussion of the four executives confirms what was widely anticipated in the weeks leading to the signing of the definitive agreement, which creates a show business giant valued at $43 billion with revenues of around $13 billion.
GE officials said they have identified $400 million and $500 million in synergies, with up to $350 million the result of cost savings and the balance the result of revenue growth.
The explanation behind the preponderance of NBC executives at the top is mathematical. GE will control 80 percent of the new company, while VUE holds the other 20 percent. Of the 15-member board of directors to be created by the new company, three seats will be held by people selected by VUE. Mr. Wright will serve as chairman of the company.
Given that structure, many observers expected Mr. Falco, a longtime NBC executive who is widely respected and well-liked, to be the person most intimately involved in the mechanics of the merger.
Mr. Wright said as much last week, adding that Mr. Falco will oversee the new company’s core businesses. “Randy will have responsibility for a lot of our major commercial businesses-ad sales, fees, the cable-fee business and the relationship with broadcasters,” Mr. Wright said.
Mr. Zucker is likely to have responsibility for all of the new company’s entertainment business and will see VUE’s television production operation combined with NBC’s television business. He also will have responsibility for the cable and production operations at VUE, Mr. Wright said.
Mr. Meyer’s task will be to continue running the film studio and theme-park business with Universal Studios Chairwoman Stacey Snider, whom Mr. Wright said NBC wanted and who has agreed to stay on with the new company. However, Mr. Meyer will likely lose control of VUE’s television and cable businesses, given NBC’s push to bring those businesses under a single manager, Mr. Zucker.
Finally, Mr. Ireland is expected to continue in his role as head of the television station group, continuing to report directly to Mr. Wright, who said Mr. Ireland’s world probably won’t change significantly following the completion of the merger.
Though there has been a sense among many observers that NBC executives will likely get the plum assignments in the new company, Mr. Wright said it is too early to announce additional appointments. “I think there’s plenty of opportunity for the better people at NBC and the better people at Universal to take those senior management positions,” he said.
It is also unclear which of two compounds in Southern California’s San Fernando Valley is likely to serve as the West Coast headquarters for the company. While there has been some talk about consolidating NBC executives based in Burbank, Calif., with VUE management at the Lew Wasserman Building in Universal City, Calif., Mr. Wright said neither location could instantly handle an immediate combination. The company might have better luck in the New York area, particularly at NBC’s new facility in Englewood Cliffs, N.J., which houses many of NBC’s cable operations.
“There is a great deal of property [in Universal City], but most of it is spoken for,” he said. “I’m not sure we can accommodate all of the NBC people there.”
What Mr. Wright is banking on is the ability of NBC Universal to leverage its strengths as a content company across a plethora of delivery platforms, ranging from the broadcast network to cable channels to movies, and, thanks to having had a front-row seat to other media deals over the years, he is betting NBC Universal can avoid the missteps made by other media companies over the years.
Cable is likely to cut a large figure in the new company’s plans. David Zaslav, president of NBC Cable, sees the combined company as being able to take already strong brands and leverage them across both the broadcast network as well as across each other.
That means replicating the cross-branding NBC did for Bravo’s hit “Queer Eye for the Straight Guy” but on a substantially larger scale, Mr. Zaslav said. Also, it means tapping VUE’s vast television and film library to explore launching new channels and bolstering existing ones.
“We have a distribution and marketing team to develop these brands and a programming team to enhance them,” he said. “The challenge for us is to take all those channels, including ones we own today, and enhance them.”