As president of CBS Broadcast Group, Howard Stringer had come to embody the network. The voluble Welshman would take the bully pulpit, eloquently defending CBS chairman Laurence Tisch’s blueprint to keep CBS a pure-play broadcaster – even as the competition expanded into the lucrative cable business.
Now that Stringer has deserted Black Rock for Creative the Artist Agency’s media-technology consortium with three Baby Bells – exactly the kind of enterprise that he could once be counted on to deride at rubber chicken industry banquets – what happens to CBS? The Eye web’s primetime ratings are in a slump, morale problems hamper various divisions and the waiting game continues for the network to be sold.
Indeed, Stringer is just the latest to bail out in a line of top brass that includes CBS Entertainment prexy Jeff Sagansky and Tisch consigliere Jay Kriegel, who over the last year became frustrated at Tisch’s reluctance to build the core business and decided they didn’t want to be around to watch the CBS chairman strip the company down to sell it.
To replace Stringer, Tisch has turned to CBS veteran Peter Lund to guide the network out of its current doldrums. Lund joined CBS in 1977, interrupted by a three-year stint at Multimedia Entertainment before returning as exec VP of the Broadcast Group in 1990. The network president title (a position that had been vacant) was added roughly a year ago. Last summer he was approached to head Fox Broadcasting after the departure of chairman Lucie Salhany, but that deal was nixed when Stringer told him there was no way the network was going to let him out of his contract.
Lund’s reputation as a syndicator at Multimedia, as well as at the network and within the station community, has won him high praise as he moves into the top slot. Many also suggested that a change might be helpful in shaking up a struggling and somewhat demoralized operation. While he’s not the world-class shmoozer his predecessor Stringer is, the affable, 54-year old Lund is a straight-talker with the ability to play hardball when it comes time to cut a deal.
While Lund represents an even hand for the unsteady Eye, the consensus is his role is that of caretaker until the CBS chairman gets his asking price for the network. Tisch came close last summer, before his deal with Barry Diller’s QVC was quashed by Diller’s cable partners.
“Lund may be first-rate, but his hands are tied by Tisch’s unwillingness to build on the core business, something all the other networks did a long time ago,” says a senior studio exec. “It’s difficult to attract and keep the best talent when you have a ‘for sale’ sign out front.”
Lund is aware of the perception that the company is in play and that Tisch may have missed the boat by refusing to build on the broadcasting base, but he says that’s a one-dimensional view of CBS.
“For better or worse, (Tisch) has been consistent in his view to keep our focus on the core business,” says Lund. “But he has always been willing to spend the money we need to make the network stronger. To his credit, he’s never backed off from spending money on programming.
“Look at the money we spent on bringing David Letterman here. When we first looked at the numbers needed to make it happen, we were talking a multi-million dollar gamble and Larry was willing to take that risk.” And CBS’s programming alliance with Group W. Prods., he said, “wasn’t cheap.”
Ascending to the No. 2 job, Lund appears to be moving quickly to stabilize a shaky situation at CBS. The game plan seems to be to reassure his cadre of division chiefs that the new boss is 100% behind them.
No ‘mating dance’
“I know everyone who works here; there doesn’t have to be any kind of mating dance,” said Lund, who has been Stringer’s lieutenant as exec VP of the Broadcast Group and president of the CBS TV Network. “I worked with (CBS Entertainment prexy) Peter Tortorici when I was president of CBS Sports. I worked with (CBS News prexy) Eric Ober when I was general manager of WBBM and he was the news director. There’s not going to be any shakeup. There’s no blueprint for a reorganization.”
However, Lund added that one of his first orders of business would be to find someone to replace him in his role of president of the CBS TV Network, overseeing the owned-and-operated stations, sports and marketing. Joe Abruzzese, who has worked closely with Lund as CBS’ exec VP of sales, is considered a top candidate for expanded responsibilities.
As for the entertainment division, Tortorici appears secure, though after a season in which the network has fallen from first to third in households – and to fourth place in certain key demographics – there’s speculation that other changes may be in the offing once development season concludes.
With latenight profitable and CBS’ daytime lineup a consistent household winner, the network’s principal challenge remains primetime, where a shortage of established hits will make it difficult to create new franchises. “They have no safe harbors,” said one producer. “They can’t even launch a show with ‘Murphy Brown’ anymore.”
Wall St. bullish
The Wall Street view is that the network’s current primetime woes won’t deter a potential sale, even at Tisch’s estimated asking price of a hefty $5 billion. “There will be somebody out there who will pay Tisch’s price,” says Jay Nelson, media analyst of Brown Bros. Harriman. “The general health of the industry had made it more valuable, despite its current troubles in primetime. An investor will look at it and say, ‘I could do it better’ and make the kind of profits they are raking in now at ABC and NBC.”
Beyond the usual suspects – Diller, The Walt Disney Co., Turner Broadcasting – a consortium of telcos might be interested if there’s regulatory relief from Washington. Indeed, the so-called Media Company’s new CEO Howard Stringer doesn’t count the possibility out, though his partners said at this point there are no specific talks surrounding the network.
“There are a lot of potential alliances,” says Stringer. “It’s too early to say who or what or when, but we don’t want to close any doors.”