Media Business Strategies

The Blog of David Polakoff

Disemboweling for Dollars

Posted by David Polakoff on February 20, 2009

The Windmills of My Immediate Mind

Media Business Strategies – David Polakoff

Disemboweling for Dollars

I admire a leader who stands by his/her convictions and is ultimately proved correct, especially when challenged from all directions. A leader who seemingly swims against the tide needs an iron stomach and a suit of armor.

As modestly as I can convey, I’m a good leader as evidenced by roles in which I’ve served and the related successes; plus colleagues/supervisors at my corporate media tenures and my consulting clients have noted such in their recommendations and referrals. I have a strong conviction of my leadership capabilities – go ahead, launch the arrows at my suit of armor. I am open to varying and alternative approaches and I can sift and process them to affirm or alter my viewpoint. I’m not obstinate in my decision-making, but I feel strongly when logic, instinct, and appropriate risk taking combine to support my choices.

“Whether ’tis nobler in the mind to suffer the slings and arrows of outrageous fortune, or to take arms against a sea of troubles, and by opposing, end them (Shakespeare from “Hamlet”).

Standing by corporate convictions in the media world is a tough arena. Wall Street pressures to “unlock shareholder value” are too often for quick profit taking and not the greater good of the enterprise. The ones who get rich are the lawyers, investment bankers, and broker/dealers. The shareholders and employees who committed to the company are too often shorted.

Sumner Redstone separated Viacom assets into (new) Viacom and CBS. Are the shareholders, long-term better off? Not if you compare the consolidated metrics against the two individual resulting metrics. CBS is now creating a theatrical film unit (when the combined company had, Paramount). And new Viacom is creating a premium cable movie service (which can’t get cable/satellite carriage) when under old Viacom, there was Showtime (now under CBS). The marketplace doesn’t need another film studio or movie channel. And, in the current economic climate, having the Viacom basic channels’ cable revenue streams would help balance the current tv and radio network advertising challenges of CBS.

Time Warner is now splitting off its cable systems, to unlock shareholder value. The decision was made prior to the current economic climate. Now, though, maybe the cash flow and profits on the cable side would provide safety for the advertising reliant businesses of the rest of Time Warner. Is the split-off the right strategic decision and was the decision too driven by Wall Street?

Then there are those proven to be ultimately correct in their convictions, like Jerry Levin (…read further). Well before the 2000 AOL deal, as head of Time-Warner, Jerry was getting Wall Street heat to shed Time Warner Cable. The heyday of cable system consolidation had concluded and cable required enormous technological capital expenditure and always would (to be technologically current). Owning pipes was not as important as the content put through. Jerry stood by the vision of what was coming for cable and was proven correct. The cable systems were sufficiently upgraded and broadband usage for the internet, video on demand, and telephony threw off great corporate free cash flow.

Then, there are those who stand by conviction and refuse to ever admit error (see Bush 43).

Decisions should be well supported, survive available refuting evidence, and challenges by advisors willing to tell you what you may not want to hear. Upon such a strong platform and with appropriate degrees of humanity, risk, and chutzpah, I’ll swim against the tide in the wake of a strong leader.

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