AFTERSHOCKS continue to shake the Hearst empire in the wake of the sudden departure of CEO Victor Ganzi.
Most expect Frank Bennack, the previous and now current CEO, to hold the reins for a long stretch of time with no successor named for many months, possibly into 2009 – or beyond.
Nevertheless, speculation is already swirling around who ultimately will land the top job.
“It is too early to discuss names, we just named the search committee yesterday,” said a company spokesman.
Said one source, “It is not going to be a quick process.”
“He’s running the show,” said one executive of Bennack. “He probably never stopped running it.”
Unlike most modern corporations, where executives pack up and leave soon after their retirements, the Hearst tower continues to have offices for its old guard.
Bennack was seen coming and going several days before the Wednesday board meeting that led to Ganzi’s departure after an 18-year run at the company, the past six as CEO.
Other retired Hearst executives who remain tied to the company as board members include Gil Maurer and Mark Miller. Hearst has 20 people on its board, including five Hearst family members, including board Chairman George Hearst.
The directors are appointed by the Hearst Family Trust, which contains 13 family members.
Under the terms of an ironclad will set up by legendary newspaper baron William Randolph Hearst Jr., the company is run for the benefit of the Hearst family trust, but the family cannot fully control the board of directors that operates the company.
Upon the death of the last grandchild who was alive when William Randolph Hearst died in 1951, the trust dissolves and the company must be sold. Most predict such a sale won’t happen until 2045.
It was the family trustees who were said to have clashed with Ganzi.
In its statement announcing Ganzi’s departure, the company cited “irreconcilable policy differences with the board of trustees about the future direction of the company.”
Several industry observers zeroed in on William Randolph Hearst III, a family trustee widely known as Will, as a potential source of conflict with Ganzi.
Will Hearst currently lives in San Francisco and sits on the board of one of the most successful high-tech venture capital firms in the Silicon Valley: Kleiner, Perkins, Caufield & Byers.
He did not return a call seeking comment, but a company spokesman insisted the speculation that he was the source of conflict with Ganzi was off the mark.
“That is not true,” said the spokesman.
The spokesman also denied another round of speculation that Bennack had suddenly soured on Ganzi, his handpicked successor.
“Bennack had long groomed Ganzi to be his successor and he had a good long-term relationship with him,” said the spokesman.
Given Hearst’s history of naming lawyers to top positions, Jim Asher, Ganzi’s No. 2, has been mentioned as a potential successor. However, most insiders discount him as being too close to Ganzi and as having too much of a legal background.
Ken Bronfin, president of Hearst Interactive Media, was also seen as having the right background. But Bronfin’s division is still only a tiny part of Hearst.
David Barrett, the 60-year-old head of Hearst Argyle-Television, the company’s TV station unit, would also seem to be a serious contender. Newspaper division chief George Irish is not considered a candidate for CEO, particularly given that newspaper revenue declined last year.
In addition to any internal candidates, the CEO search is expected to take in outsiders as well, but the early betting is that it will either go to an insider, or an outsider who will be forced to learn at the elbow of 74-year-old Bennack for a year before the reins are handed over.
Privately held Hearst doesn’t disclose its revenue, but Forbes estimates that the 17,062-employee media giant had revenues last year of $4.52 billion.
The company said that its “consolidated cash available performance in 2007 set another record” – its 15th out of the last 16 years.
Not yet
There’s no need to rush.
Susan Lyne, who recently announced that she was stepping down as CEO at Martha Stewart Living Omnimedia, was forced to postpone her much-publicized lunch with Time Inc. CEO Ann Moore this week.
“It’s [the lunch] still in the works,” said our source.
Lyne has been mentioned as a possible successor to Moore at Time Inc. Moore has said she will not seek a contract renewal when her current one expires in the second quarter of 2010.
The inside candidate is widely seen to be the Time Inc. COO John Squires.
While Moore may have some input into finding her own eventual successor, the final say is going to rest with Moore’s boss, Time Warner CEO Jeff Bewkes.
Plane trouble
Richard Desmond, chairman of Northern + Shell Group that owns OK! magazines around the world, was summoning all the business side people to London last weekend for a big corporate pow-wow.
Surely one of the key topics was going to be what the Americans were doing to stem the red ink on the US version of OK!, which is now believed to have cost the company over $100 million.
And they were likely to hear how much money the company was really willing to spend in its bidding war against People to obtain the baby photos of the yet-to-be born twins of Brad Pitt and Angelina Jolie. Some reports had suggested that the worldwide bidding rights were already at $15 million.
But the talks never got off the ground.
Publisher Tom Morrissy and the rest of his crew boarded a flight at 6 p.m. and sat on the tarmac until 1 a.m., when the flight was finally canceled due to weather.
“Unfortunate situation, but it was a great crew of people led by Tom so they made the most of it,” said an OK! spokesman. “Everyone was disappointed not to join the group in London but they were in relatively good spirits about it when I talked to them on Monday. I mean, what else can you do but laugh, you know?”
Succession
Marcus Brauchli, who resigned in April as managing editor at The Wall Street Journal, has been rumored to be one of several candidates to take over Leonard Downie’s job as executive editor of the Washington Post.
Jon Meacham, editor of Newsweek, had held discussions about the Washington Post job as well. However, well-placed sources say he’s not interested in pursuing it.
Jonathan Landman, deputy managing editor at The New York Times, is also said to be in the running.
Landman declined to comment when reached by Media Ink.
Troika
In a broad sweep of editorial changes, Robert Thomson, the newly installed managing editor of The Wall Street Journal, unveiled a new “triumvirate” of insiders to fill the upper-echelon editorial slots as the paper pushes for more political and general news stories alongside its business coverage.
(The Journal, like The Post, is owned by News Corp.)
Matt Murray will become national editor, overseeing American general and corporate news.
Nikhil Deogun will become international editor and oversee global bureaus.
Mike Williams will be the Page One editor, responsible for investigative reporting.
In a memo unveiling the changes, Thomson said, “The troika, who will become deputy managing editors, will sit close together in what could prosaically be called a ‘news hub,’ thus streamlining commissioning and editing decisions and giving them a central role in the production and presentation of copy for the paper and the Web site.”
Meanwhile, Mike Miller will continue to run the paper’s features section, but adds the title of senior deputy managing editor and will edit the paper on days when Thomson is unavailable.