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Zaslav Exits NBCU for Discovery CEO Post

Nov 16, 2006  •  Post A Comment

Discovery Communications on Thursday named NBC Universal executive David Zaslav president and CEO, replacing Judith McHale, who previously announced plans to retire at the end of the year.

Mr. Zaslav, until now president of NBC Universal Cable and Domestic TV and new-media distribution, is expected to join Discovery sometime in early 2007.

Discovery has been fighting its way out of a decline caused by a steep drop in ratings at its two main cable networks, Discovery Channel and TLC. Since the summer, Discovery management appears to have been able to reverse the viewership declines, but Wall Street analysts noted that domestic ad revenue has not followed the ratings upwards quickly enough.

Discovery Holding Co., which has a 50 percent interest in Discovery Communications, announced earnings earlier this week. It said that Discovery Communications had a 13 percent increase in earnings before interest, taxes and depreciation to $192 million. But it also said the company had a 1 percent decline in domestic ad revenues. Credit Suisse analyst William Drewry noted that “the advertising trend was disappointing, given the ratings improvement and the sequential decline from the plus-1 percent growth recorded in Q2.”

Since it was founded Discovery has built a distinct culture. It remains to be seen how an outsider such as Mr. Zaslav will affect that culture and whether any of the company’s senior executives will decide to leave, as often happens after a change at the top.

Mr. Zaslav is the second senior executive to leave NBC this week. Randy Falco, president and chief operating officer of the NBC Universal Television Group, took the top slot at Time Warner’s AOL unit on Wednesday.

At NBC, Mr. Zaslav spearheaded the company’s negotiations with cable operators and new-media companies. He joined NBC in 1989. The departure of Mr. Falco, who was Mr. Zaslav’s boss, opened a door in his contract with NBC, which otherwise might have made moves to keep Mr. Zaslav, a source said.

It was unlikely that either NBC executive’s post will be filled. NBC is in the middle of a restructuring that’s been dubbed NBC 2.0. And there are a number of executives that could pick up the slack in NBC’s cable area, including Jeff Gaspin, president of NBC Universal Cable Entertainment, Digital Content and Cross-Network Strategy, Bonnie Hammer, president of USA Network, and Sci Fi Channel, and Lauren Zalaznick, president of Bravo, and JB Perrette, senior VP of new media and chief financial officer of NBC Universal Cable.

“I have had the pleasure of knowing David for over two decades since he first helped me in the early days of Discovery as a bright, energetic young lawyer who enthusiastically embraced our brand and worked tirelessly on our key programming and distribution deals,” said John S. Hendricks, founder and chairman of Discovery, in a statement.

“In the time since, David has amassed an enormous set of management and financial skills at NBC Universal, where he built the distribution base and operations of an enviable array of cable and new media offerings,” Mr. Hendricks said. “He is a passionate, inspiring leader who is the perfect choice to steward the valuable stable of Discovery brands and to guide our global company into the digital future.”

“This is a dream job,” Mr. Zaslav said. “I look forward to building on the company’s heritage of creative excellence, and the attributes for which it has always been known-world-class content, global expansion, and first-mover advantage into new distribution platforms.”

Discovery’s search committee was chaired by Mr. Hendricks and composed of representatives of Discovery’s shareholders, which are Discovery Holding Co., Advance/Newhouse Communications and Cox Communications.

Mr. Hendricks will serve as acting CEO until Mr. Zaslav’s arrival.