This Media Life

From AOL to W

But wait -- what about Jerry Levin?

He has already engineered what might appear to be a highly advantageous setup. Levin, the CEO, with recession looming, ad markets cratering, dot-coms crashing, has passed on the first, and no doubt most difficult, test of AOL Time Warner to Pittman and his cronies.

Likewise, there are many Democrats who are not at all unhappy that George Bush has a remarkable opportunity to hang himself and, with him, the Republican Party. Everyone at TW who has seen Jerry Levin survive Nick Nicholas, Steve Ross, and Ted Turner would hesitate to say that he will not survive a few others.

Partisanship and divisiveness. One of the main themes of the merger is that it's a way to deal with an organization hopelessly divided, like Washington, by fiefdoms and personal ambition. Everywhere you go within TW, territories and self-interest are clearly marked.

You have the magazines. HBO. The movie studio. The music companies. The cable guys. CNN. And each of these parts of the company is riven by all manner of wars, standoffs, and unstable alliances. These are feudal states divided by strategies, personalities, and long traditions, on top of white-knuckle power plays. Jerry Levin has never been able to run this company (nor, some would say, has he ever tried) as Murdoch runs News Corp., or Eisner Disney, or Redstone Viacom. It's not top-down; it's about competing power structures.

AOL, like George Bush, is promising to change the gridlock culture. Giving Bob Pittman control over a sweeping part of the company is meant to break the equal-power principle. The management theory is that the merger, and the structure of the merger, gives one operating unit -- AOL -- primacy over a lot of formerly independent operating units.

It's a theory.

Social issues. The root of Time Warner's liberalism is that news and creative concerns are at least as important as business concerns. In New York, it's the separation of church and state; in Hollywood, it's the indulgence of temperamental stars; in the music industry, it's . . . well, whatever it takes. AOL, on the other hand, likes to think of itself as an anti-content company. Not only does it not take the risks of developing content, it has largely built its fortunes on deals that rough up other companies that produce content (including a lot of instances of roughing up Time Warner). Content people, AOLers believe, are wimps -- do-gooders, bleeding hearts, environmentalists. (Actually, AOLers believe everyone outside of AOL is a wimp.)

What's more, the separation of advertising from content is just sophistry in the AOL world, a macho view that AOLers seem to take great pleasure communicating to the pantywaists in New York, Atlanta, and L.A. (the fact that these content pantywaists are some of the great internecine fighters, and that, on the West Coast, you even have content sissies who are thugs and criminals, will be part of AOL's post-merger experience).

The theme. You gotta have a larger purpose in the takeover business -- a reason for being, beyond more stuff and more power. Both Bush and AOL, having now accomplished their takeovers, are in the difficult position of being caught with backward themes. In Bush's case it's a mishmash of Reagan-era fiscal policies and tax cuts. For AOL, it's a back-to-the-future promise of new media and the Internet in the days of a glorious nasdaq. Oddly, it is exactly this stuff -- opening screens, IMs, chats -- that continues to dazzle the people at TW (less, I suspect, than it dazzles people at AOL). Bob Pittman gave a speech at the American Magazine Conference saying that AOL had already sold 500,000 new subscriptions for Time's magazines. This was briefly inspirational (before people started to pick apart the number). And there is still a lot of broadband, and movies-on-demand, and wireless talk at Time Warner. But I'd lay money on the tax cut coming sooner.

The media nation, like the actual nation, gets the leaders it deserves.

E-mail: michael@burnrate.com