FRANK Bennack, who six months ago returned to the helm of Hearst Corp. as interim CEO after the family-controlled board ousted Victor Ganzi, isn’t stepping down anytime soon.
And that has raised fresh speculation that changes could be coming at the top of the company’s magazine unit, now led by Cathleen Black.
* At the time of Ganzi’s stunning ouster, Bennack looked as if he was returning on a short-term basis while the media giant searched for a replacement.
Bennack, 75, had retired as CEO in 2002, but remained a member of Hearst’s board, maintained close ties to the Hearst family and even kept an office in the Hearst Tower.
In an uncharacteristically blunt statement, Hearst said at the time of Ganzi’s departure, “The reason for his resignation was irreconcilable policy differences with the board of trustees about the future direction of the company.”
The statement also said the company was forming a search committee to find a successor to Ganzi.
Now, sources say the search has been called off as Bennack appears to have no intention of relinquishing power.
“There is a search committee and it’s headed by Bennack, but it hasn’t held any meetings,” one CEO told Media Ink recently.
What has happened in the past two weeks, however, is that Bennack has named two new division heads at Hearst.
Scott Sassa, a former NBC executive, was tapped to replace Bruce Paisner as head of Hearst’s entertainment and syndication unit, which is responsible for the company’s cable-TV investments, which include cable channels ESPN and A&E, as well as newspaper syndication and TV production.
Earlier this week, Steve Swartz, the No. 2 executive in the newspaper division, was promoted to the top job, replacing George Irish, 65, who is retiring after 29 years with the company.
And that might not be the end of the changes that Bennack makes.
Sources say some board members recently have soured on Black, who, like Ganzi, was a Bennack ap pointment from the 1990s.
For starters, there was resentment over Black’s best-selling memoir and business advice book, “Basic Black: The Essen tial Guide for Getting Ahead at Work (and in Life).”
“There was a lot of anger about that book,” said one source. “There was a sense that she used a lot of company resources to promote it.”
There is also growing concern about the magazine’s lack of a digital strategy.
“Bennack is getting to the bottom of things that need to be done,” said a source. “Cathie Black is probably answering more hard questions now than she’s ever had to in the past.”
The division has three big money makers – Cosmopolitan, O, the Oprah Magazine, and Good Housekeeping – but all have struggled a bit amid the souring economy.
Good Housekeeping has been a particular problem for years. At one time, it was clearing more than $100 million for the company annually, but now one source estimates its profit is around $30 million and falling.
Several other magazines have been more marginal performers. Harper’s Bazaar is said to post losses of around $5 million a year, while Esquire, despite recently celebrating a heavily hyped 75th anniversary issue, has seen its ad pages sink by double-digits.
The magazine division’s attempt to launch new titles has had its own problems. Among them: Tina Brown’s Talk, which ended up losing $27 million for Hearst, Lifetime, Shop Etc!, Weekend, O at Home, CosmoGirl and Quick & Simple.
“Cathie Black is one-for-eight on start-ups,” noted one source.
Bad news
Newsweek confirmed to its employees that it is indeed going for a drastic downsizing that will reduce its 2.6 million circulation by one million to 1.6 million.
There will also be additional layoffs, following earlier cuts of 111 from both the editorial and business sides earlier this year.
A company spokesman would not release names, but said there would be “a total of around 10 job reductions from the editorial and busi ness side.”
Among those 10 are at least three edito rial people: Anne En slow, a New York corre spondent; Karen Springen, a Chicago-based correspondent; and Lorraine Ali, a Los Angeles-based senior writer.
But beyond the forced cuts, the company is hoping for a yet-to-be-disclosed number of voluntary buyouts.
This time, however, the package for voluntary departures won’t be quite as generous as Newsweek’s past buyout offers, Media Ink has learned.
For starters, there is no age requirement. Under the previous buyout, one had to be at least 55 years- old to get the para chute.
The last time, the magazine offered to those who accepted a buyout a bump in their pension pay ments equivalent to 15 percent over what they’d get if they stuck around until their normal retire ment. This time around, that in crease was trimmed to 12 percent.
Employees at the magazine at least a year are eligible for the buyout. Employees with 10 years of service can exit for a full year’s pay, while employees with 20 years or more of service can exit with up to two years’ pay – the maximum allowed.
Management also warned employees in yesterday’s conference call that this positively will be the last buyout. In the future, if Newsweek dips into the red, heads will roll.
The conference call was overseen by Newsweek Editor-in-Chief Jon Meacham, Tom Ascheim, the MTV executive who last year replaced Rick Smith as Newsweek president and CEO, and Ann McDaniel, the onetime Newsweek journalist who is now the managing director of Newsweek.
Washington Post CEO Donald Graham confirmed Monday that Newsweek will lose an undisclosed amount of money in 2008, as will the flagship Washington Post. For Newsweek, it is the second-consecutive annual loss. keith.kelly@nypost.com