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Beleagured biz does soft-shoe for the Street

MGM, AOL toppers think shares undervalued

NEW YORK — Showbiz execs hit the Street Thursday in a push to drum up some enthusiasm for the sector and persuade investors to buy their stocks — or at least not to trash them.

Toppers at MGM and AOL Time Warner, speaking at a media conference in Gotham, intimated the shares are undervalued. Walt Disney chief financial officer Tom Staggs showed lots of film clips but was light on strategy. Viacom chief financial officer Rich Bressler spewed statistics, poked fun at the Mouse House presentation and insisted Viacom’s asset mix makes its stock superior to all its rivals as an investment.

AOL TW’s incoming CEO Richard Parsons, the keynote speaker, offered his first public articulation of the company’s woes (America Online’s ad slump and a devastated stock) and outlined priorities for when he formally takes the conglom’s helm in mid-May: restoring credibility with investors, getting AOL back on track, financial transparency and simplicity. That includes a resolution to the messy TWE partnership. Parsons is looking at several options, including a spinoff of the cable systems. He also said no big acquisitions are likely while the company is in damage-repair mode.

Parsons said he usually launches prepared remarks with a joke, but “I was admonished by my investor relations staff — ‘No jokes. This isn’t funny.’ ” AOL TW stock has slipped from $60 to under $20 over the past year.

Optimism needed

He acknowledged many AOL TW employees are “affected by where the stock is and what they read in the papers” and said they “need to be given a sense of optimism and hope.” Parsons said he wants to orchestrate an upswing in sentiment inside and outside the company in the next six months.

He called the barrage of bad press exaggerated. “It wasn’t more than a year ago when we could do no wrong,” he said, reminding the group of AOL TW’s strong cable, film and publishing divisions. (Former Time Warner holders are irate because those businesses did fine before the merger, too.)

In response to a question, Parsons said he gets on well with chairman Steve Case but, as did outgoing CEO Gerald Levin, he reports directly to the board. Case will be “looking around corners” for long-term technology trends, while Parsons will have a traditional CEO role. “I think of Steve as a partner and Bob (Pittman) as a partner, but in the end, it’s got to be the CEO who implements strategy and runs the shop day to day.”

Chief operating officer Pittman was recently tapped to revitalize America Online.

Investor reaction to Parsons was split. “It didn’t make me want to run out and buy the stock,” said one. “He outlined the problems but didn’t have solutions. He told me what I know.”

“What did you expect him to say?” asked another fund manager, who said he found Parsons level-headed and reassuring.

AOL-TW shares fell 3.8% to $18.65.

Mouse’s tale

Most at the press conference weren’t impressed with Disney’s message that trends are improving at theme parks and that ABC may turn around.

Viacom’s Bressler twisted the knife, recalling that it took Les Moonves and his team four to five years, starting in 1996, to pull CBS out of a ratings quagmire.

He called Viacom “comfort food” for investors — straightforward, simple and with management that has “a myopic focus on driving the stock price” and no downers like the Internet, theme parks or newspapers lurking in the portfolio.

Bressler has a particular reason to be upbeat. He used to be Time Warner’s chief financial officer but was pushed out of the merged company last year before it imploded.

A number of investors agreed the company is hot but said Viacom stock is already “priced for perfection” — leaving little upside.

MGM chairman Alex Yemenidjian griped that the Lion’s stock price doesn’t even cover the value of its 4,000-title film library. Company is looking for a sizzling summer with the latest James Bond “Die Another Day.” He predicted full-year 2002 revenue will grow 20%.