Far from Lotusland, corporate CEOs enjoy cozy proximity to Wall Street
Hollywood may be the soul of showbiz, but there’s no show without the dough.
And the dough, let’s face it, is what Gotham’s all about. It’s the main reason why the vast majority of media conglomerates choose to run their shows out of the Big Apple.
Of the major media monoliths, only Disney is headquartered in California. Time Warner, Viacom, News Corp. and Sony Entertainment all keep their headquarters in the Big Apple.
With NBC’s pending acquisition of Universal, the GE-owned hub at Rockefeller Center will join that elite conglom club. NBC Universal CEO Bob Wright will oversee his new empire from “30 Rock,” as it’s known in the biz, alongside TV programming commander-in-chief Jeff Zucker and operating guru Randy Falco.
Rupert Murdoch underscored the lure of the greenback when he decided to repatriate News Corp.’s official corporate residence from sleepy Adelaide, Australia, to New York last month.
Some 20 years after becoming a U.S. citizen, Murdoch — a denizen of SoHo — is bringing his company’s primary stock listing to him, making the $18 trillion New York Stock Exchange News Corp.’s primary financial residence. The move was less sentimental than opportunistic: Proximity to Wall Street means a bigger market for his company’s shares, a potentially higher valuation and access to cheaper capital from bond markets.
Murdoch has long steered the global News Corp. ship, with its lean headquarters staff, out of the company’s Sixth Avenue hub, but the decision to pull up Aussie roots signaled just how important the NYSE — and a coveted position in the vaunted S&P 500 index — can be to a media conglom, no matter how far-flung its operations.
Certainly there are also historic roots for entertainment’s Gotham attachments. Broadway theater, book, newspaper and magazine publishing have long been based here, as are the major TV news outlets and cable program nets. The movie and broadcast TV businesses got their start in New York before immigrating much of their production to more fair-weather climes. But most of all, it’s about the money. Two thoroughfares in particular provide the biggest magnets for the entertainment congloms that reside here: Wall Street and Madison Avenue.
“The lifeblood of the business is money and New York is the world’s financial center,” says Time Warner CEO and chairman Dick Parsons, a New York native whose formative years were spent in banking. Having just moved into the company’s shiny new landmark HQ in Columbus Circle (a complex frighteningly similar to an L.A. shopping mall), Time Warner has made its Gotham location more emblematic than most.
“L.A. has the intellectual capital for how you make a movie, but the market for the intellectual capital for how you monetize it is here,” says Parsons.
And the competition isn’t just for human talent, but the big bucks of major mutual funds and other institutional investors. When not overseeing studio and network operations on the West Coast, Gotham’s media CEOs and their financial staffs spend a lot of time courting investors downtown.
“Our global headquarters has for many years been in New York City, along with those of most of our peers,” Murdoch told investors at a recent press conference announcing News Corp.’s shift to the Big Apple. “We compete with those other media companies for the attention of investors on the biggest share market in the world: the NYSE.”
Apples and oranges
One execat Burbank-based Disney complains that being based so close to the lot can be a disadvantage when trying to explain to shareholders that movies are just a small part of the business. The physical separation between the conglom headquarters in the Big Apple and their studio outposts in Los Angeles may actually help companies like Viacom and Time Warner distance themselves (and their share prices) from the erratic nature of the movie business.
But beyond Wall Street, Gotham media execs point to less obvious advantages to having their headquarters in Gotham’s tightly woven, highly strung urban jungle.
“This city basically says ‘either get onboard or get out of town,’ ” says Sony Corp. USA chairman-CEO Howard Stringer of New York’s business cauldron.
Stringer, aNew Yorker of 40 years and proud apostle of Gotham’s go-go style, is happy to keep some distance between the beancounters and the studios execs. “Having our headquarters here gives us a healthy detachment from the seductive nature of the Hollywood community,” says Stringer, who oversees Sony’s music, filmed entertainment and interactive operations out of the imposing Sony Plaza on Madison Avenue at 55th Street.
Parsons believes that the cliche about New Yorkers living to work (while West Coasters work to live) isn’t entirely off the mark. “I personally like that energy; I also like the youthfulness of the place.”
Inevitably, such geographical partisanship and the physical distance and time zone gap only fuels distrust and animosity between suits and talent. Parsons says TW’s been particularly successful in figuring out how to work through those tensions and blending the best of both worlds with minimum friction.
Not that he isn’t a little biased about his hometown, however.
‘Twelve A lists’
“New York is a truly global city — L.A. is not. … Or maybe that’s just a jaundiced view from a native New Yorker,” says Parsons.
Like many CEOs here, the Time Warner chief seems to relish the challenge of competing on a stage that extends far wider than entertainment. “New York has 12 A lists, not just one like you’d have in company towns like L.A. or D.C.”
As for the sometimes tricky bicoastal debates over what gets made, the media moguls can afford to be a bit smug. “They know they need to look back here for the dough,” says Parsons.
Stringer notes that New York is also the center for news and information, a by-product of which is a greater connection to the outside world and trends.
Perhaps it’s fitting that cut-throat CEOs — regardless of their industry — prefer to swim in the biggest pool with Wall Street sharks.
Both Parsons and Stringer say they thrive on Gotham’s palpable energy. “(New York) is more textured and complex; it’s always on and very competitive,” Parsons says of his hometown. “That doesn’t suit everybody. … Let’s face it, the L.A. lifestyle is very different.
Though arguably both cities are insular in their own way. New Yorkers — especially coming off an interminably long winter — grouse about Hollywood’s company town attitudes, culturally numbing strip malls and freeways, and the distractions of the physical environment (sunshine?).
“I did flirt with California and I certainly like to go in the winter and see palm trees, but I never wanted to stay,” says Stringer.
“The difference is that in New York, your identity is not a prisoner of your profession,” notes Stringer, who says he revels in the diverse backgrounds of friends who thrive in different fields. That’s harder to find in “the Beverly Hills cocoon,” he says. “The density of the city makes it easy to get together.”
Describing himself as a sucker for the city’s physical and cultural density, Stringer believes that environment is essential for a media company that needs to be constantly in touch with consumers. “We feel connected to other businesses and are more likely to meet visitors or strangers.”
“I don’t care where you’re from, you can find something from there here,” agrees TW’s Parsons.
Murdoch evidently agrees. While emphasizing that News’ roots, heart and culture are still unmistakably Australian, he tacitly acknowledged that if any city can retain a culturally and regionally diverse enterprise it’s New York.