MTV job puts McGrath atop cable heap

This article was updated at 10:20 p.m.

Tom Freston, co-president and chief operating officer of Viacom, has promoted Judy McGrath to chair-CEO of MTV Networks, making her the most powerful woman in cable.

McGrath assumes Freston’s old job, taking charge of the most profitable collection of cable nets in the business, led by MTV, Nickelodeon, Nick at Nite, VH1, Comedy Central, Spike TV and TV Land.

It was under McGrath’s stewardship that MTV became the prevailing arbiter of youth culture. Exec, who is 51, spearheaded the channel’s move away from music and into other programming genres early on, paving the way for market dominance in the Madison Avenue-friendly young demos.

Although Viacom doesn’t break out the numbers separately, industry estimates put the revenues of the MTV Networks at a projected $5 billion in 2004, pegging cash flow for the group at $2.2 billion this year.

The first fallout from the McGrath upgrade is the resignation of Mark Rosenthal as president and chief operating officer of the MTV Networks. Rosenthal was one of three other candidates for the chairman’s post at MTV Networks, which opened up six weeks ago when Mel Karmazin ankled as president and chief operating officer of Viacom, causing the company’s CEO Sumner Redstone to award co-president stripes to Freston and Leslie Moonves.

The power-sharing arrangement gave Freston control not only of MTV Networks but also Paramount Pictures, Showtime, BET, Simon & Schuster publishers and Paramount Parks.

Moonves, already head of CBS and UPN, added Paramount Television to his portfolio along with the Infinity group of radio stations and Viacom Outdoor.

When he went public with the changes on May 31, Redstone said he would retire as CEO in three years, deciding then whether to anoint Freston or Moonves as his successor.

At MTV, while Rosenthal is leaving as prexy and COO, the two other candidates — Herb Scannell, president of Nickelodeon, Nick at Nite, Spike TV, TV Land, Noggin and N, and Bill Roedy, president of MTV Networks Intl. — are staying on and have agreed to report to McGrath. McGrath has not chosen Rosenthal’s successor yet.

And she hasn’t picked her own successor as president of the MTV Networks Group; the industry consensus is that the selection boils down to either Van Toffler, prexy of MTV/MTV2/MTV Films, or Brian Graden, MTV/VH1 entertainment president.

‘Sweet spot’ position

In an interview, Freston said McGrath is inheriting “the fastest-growing sector in the business, and the sweet spot within Viacom.” He added that he’s particularly bullish on the robust advertising marketplace, which “drove an upfront dollar volume of 24% increases across the entire MTV Networks operation. That bodes well for ad revenues this year and into next year.”

Some networks within the group are doing better than others. On the plus side, focusing on primetime, Comedy Central’s total-viewer average shot up by 38% during the second quarter, MTV’s by 25%, Nick at Nite’s by 12% and VH1’s by 7%.

By contrast, Nickelodeon’s total-viewer average was off 7%, Spike’s was down 10%, Country Music TV’s fell by 13% and TV Land’s dropped by 2%. BET was off by 6% in second-quarter primetime, but Freston said there are no plans to integrate BET into MTV Networks.

“One thing we will do is have a lot more talks with Debra Lee about how we handle programming development together,” he said. Lee is president and chief operating officer of the D.C.-based BET.

The blueprint for Logo, a new ad-supported network aimed at gay and lesbian viewers, and a pet project of McGrath’s, is on target for launch next year, she said. Later this week, Logo will reveal a lineup of programs, both original and acquired, that will shore up its schedule during the early years.

Because it will seek advertisers, Logo will have to run edited versions of “Queer as Folk” and “The L Word,” two successful series on its sister network Showtime that could well become available in rerun. But McGrath points to a precedent — TBS’ “Sex & the City,” which is pulling in viewers despite extensive scissoring of the content.

McGrath joined MTV at its genesis in 1981, starting as a promotional copywriter. She went on to become editorial director, exec VP-creative director and, in 1994, president.

“Judy has a true programming vision that gets wrapped and marketed and sold brilliantly to the world. But more than that she is able to weather the natural ebbs and tides of success better than most, not losing sight, not rocking the boat,” one cable exec said, referring to such recent incidents as this year’s controversial Super Bowl halftime show. “She rides it as a leader. And look at the rentention rate over there — she believes in her people.”

To her staff, McGrath is refreshingly open to new ideas but tough-minded about making sure they get translated into compelling shows. “She’s a rock star,” said one MTV executive who works with her. “You can have all sorts of conversations with her. But then she switches into competitive overdrive, and she’s no pushover.”

Some of the shows she shepherded at MTV over the years include the annual “MTV Video Music Awards,” the animated series “Beavis & Butt-head,” “The Real World,” “Road Rules,” “Jackass,” “The Osbournes” and “Newlyweds: Nick & Jessica.”

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