NBC Universal TV Group prexy Randy Falco has flown the coop to become chairman and CEO of Time Warner’s AOL division.
Falco succeeds Jon Miller, who began the process of converting AOL from a subscription-based Internet access business to an advertising-supported portal.
Falco, who for many years led NBC’s multibillion-dollar national advertising sales business, has deep relationships on Madison Avenue that could be a great help to AOL as it competes for ad dollars with Yahoo! and Google, as well as television and other media.
“A key to Time Warner’s digital future, AOL is showing early success in transitioning to an advertising-focused business model, and Randy is a first-rate choice to ensure AOL realizes its promise,” said Time Warner topper Dick Parsons.
Falco’s move, under negotiation for several weeks, comes nearly a year after he was passed over in a management shuffle at NBC U that saw Jeff Zucker become chairman and CEO of NBC U Television Group, and heir apparent to NBC Universal chairman Bob Wright.
Falco, 52, considered retiring from the network at that time, but was persuaded to stay on and managed to pull off a successful upfront sales period in May, in which the net was able to hold the line on ad rates, despite lower ratings. His clout and savvy were considered key in NBC’s ability to stem deeper advertising losses when the net fell from first to fourth-place in 2005.
He also oversaw the launch of NBBC, a syndication business for online video that distributes clips with advertising attached.
Miller executed a drastic change in business models at AOL, once considered a drag on Time Warner, which saw the company turn away from its main source of revenue — providing access to the Internet — and converting into a mass media portal, free to users and supported by advertising.
Even thought the turnaround is working, Time Warner execs grew impatient with the portal’s also-ran status to players like Google, which dominates online advertising and MySpace.com, which has captivated a generation of youth.
Miller told a British newspaper last month that the board was considering selling AOL and breaking up the company. Time Warner brass denied the report and said Miller’s comments were taken out of context.
Now the company is turning to Falco, a quintessential old-media exec, who spent a career watching the network TV business model erode first to cable, then DVRs and now competition from the Internet.
In 31 years at NBC, Falco has spent a career in the trenches on Madison Avenue, selling billions of dollars of NBC ad inventory to corporate America each year.
He also oversaw a broad swath of the company, including the stations group, network and cable sales, Telemundo and network operations.
Sources said his position as president of the TV group under Zucker will probably be eliminated and management responsibilities divvied up between his main lieutenants, Keith Turner, president of NBC U sales and marketing; and Jay Ireland, president of NBC U television stations.
Falco was once considered a likely successor to Bob Wright, who is nearing retirement as chairman and CEO of NBC Universal. But after the reorg brought Beth Comstock back to NBC U from GE, she was widely thought to have replaced Falco as Zucker’s main competition for the job.
Sources inside NBC U say Zucker is the only serious internal candidate to succeed Wright, who is 65. Back in December, Wright all but tapped Zucker his successor when he retires in the next few years. “He just needs to survive 2006. And 2007,” Wright said.