Michael Eisner can’t understand all the press-fueled fuss about succession plans, stock price slumps or lack of faith in the ABC brand. Nor is there any truth, he insists, behind speculation about the uncertain future of its Pixar deal. Talk of ill will with the Disney board is pure hearsay, says the Mouse king.
Is this spin or something more sinister?
Jean-Rene Fourtou at Vivendi Universal, was installed to rescue the company from his predecessor’s fantasies, but he still hasn’t made clear exactly what business his company intends to be in. And amid a blur of conflicting evidence, even his communications team is at pains to deliver a coherent message about corporate strategy.
Is the confusion the result of mis-management, indecision or obfuscation?
In a jittery market, media moguldom has turned Wall Street into Spin City. The more they talk, the less they say.
Amiamble CEO Dick Parsons, for instance, seems to chat freely about extracting synergies (sorry, “additional value”) out of the AOL Time Warner portfolio, but few come away feeling they understand the company any better now than they did a year ago.
Barry Diller is a shrewd steward of information and image management. But the more he dismisses talk of his interest in running Universal as “silliness,” the less anybody believes it.
Is he just being coy about his interest in U or disingenuous to his USA Interactive shareholders? In the absence of unambiguous statements of intent, actions — such as his expanded CEO role at VUE — speak louder than words.
With CEOs now under greater scrutiny than ever before, straight answers are harder to come by than ever before. Execs offer little long term vision of their business, are defensive and deliver only good news until something bad happens, at which time the spin doctors work overdrive glossing over it.
The reason, we must assume, while allowing for some executive arrogance and prerogative, is fear. Exposing possible weaknesses risks sinking a stock price down or divulging something legally dubious. But the risk-averse, hunkered-down CEO, noted Robert Bartley in a recent Wall Street Journal column, also paralyzes economic growth, as short term fears overwhelm the need to take chances.
Squirrelly and Pollyannish answers don’t reassure investors. Just look at AOL shares. The root cause isn’t the company’s financials, say fund managers, it’s a credibility problem with management.
Media CEOs have always been tough nuts to crack, but the current lack of corporate clarity is exasperating. In the boom times, the repartee with the press and the Street, like the champagne, flowed freely. Execs could think big and talk big: The world was their oyster and everything in it was for sale.
In the gassy aftermath of the burst Internet bubble, however, media and tech companies pleaded “no visibility” to Wall Street, meaning they had no idea what would happen to their companies in the short term.
Two years later vestiges still linger in the form of gun-shy CEOs who prefer to say nothing rather than risk looking a fool in six months. In the official lingo, this new ethos is: “promise less, deliver more.”
How about just being frank?It’s fair to place some blame for the prevarication on Regulation Fair Disclosure, the SEC’s tonic for execs who talked out of school with Wall Street insiders who exploited privileged information for their own gain. It also enabled companies to sugarcoat bad news in a clubby environment. Now we’re meant to get information — what little is disclosed — at the same time.
Still, hiding behind Reg FD is no excuse for obfuscating true intentions, or showing such disdain for the interpretation that analysts, the press and investors are forced to take on their own.
Next to some of his fellow media moguls, News Corp. chief Rupert Murdoch, who has made it abundently clear that he intends to pursue DirecTV if given the chance, is a straight shooter. The effusive chairman is rarely derisive of press or analysts’ queries, even in his more restrained guise of the last two years. But even outspoken Murdoch can’t be the poster boy for corporate transparency until he publicly addresses News Corp.’s own taboo topic: succession and Peter Chernin’s future.
Still, perhaps Rupe is onto something. Whether the candor is calculated or freewheeling, being blunt — to the press and your shareholders — does breed credibility.
Meredith Amdur is New York bureau chief for Daily Variety.