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American Morning

AOL-Time Warner CEO Gerald Levin Announces Plans to Retire in May

Aired December 06, 2001 - 09:22   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: It is the dawn of a new management era at the parent company of CNN, AOL-Time Warner. Chief executive Gerald Levin surprised most everyone yesterday by announcing plans to retire in May. After a decade at the top, Levin says it's time for a new challenge.

(BEGIN VIDEO CLIP)

GERALD LEVIN, CEO, AOL-TIME WARNER: I want to continue to speak out on moral and social issues. I'm also -- you wouldn't know this -- I'm not in a suit anymore. There's a creative side. I want people to understand there's a real human being here. I shouldn't be identified because I'm the CEO of the world's largest media and entertainment company. I want to reclaim the individuality and do something that is socially significant, but also creative, and I will leave it at that. There's a real human being locked inside here, and I want the poetry back in my life.

(END VIDEO CLIP)

ZAHN: And while Mr. Levin considers life change, two prepare to take the world's largest media company into the future. Richard Parsons will be the new CEO, and Robert Pittman, the sole chief operating officer. And they join me now.

Good morning, gentlemen. Delighted to have you with us this morning.

Congratulations, Mr. Parsons. It seems the news seems to catch a lot of people within our company off guard. How long have you known that you were going to become CEO?

RICHARD PARSONS, CO-COO, AOL-TIME WARNER: Well, you know, we didn't know with finality until Gerry really sort of rolled out the plan that he, and Steve and Bob and I have been talking about really for quite some time, to the board yesterday, and the board accepted it, but as I said, under Gerry's leadership and his initiative, he and Steve and Bob and I have been talking about this new kind of streamlined management for months now, and the real question was more one of timing, when did Gerry think would be the right time to sort of make the change, and as you just heard, he determined the right time was now. ZAHN: And, Mr. Pittman, "The Wall Street Journal" is reporting that you had said some time ago you didn't put your hat into the ring for the job, but it also quotes you as saying -- quote -- "Your ego will probably smart the day it is announced." Did it sting yesterday when Mr. Parsons become CEO?

ROBERT PITTMAN, CO-COO, AOL-TIME WARNER: Well, that part didn't sting. It's this part like what "The Wall Street Journal" writes that makes your ego sting. I think Dick and I have been great friends and have worked together for 18 months, almost two years, and I think when the discussion came up, it's pretty apparent in my mind who should be the CEO and should be the COO. It probably wasn't a lot of discussion. I think our skills sets are sufficiently different that we fell into the logical jobs.

ZAHN: You no doubt have both scanned the newspapers this morning. There is so much written about this. And, Mr. Parsons, among other things that has been said or suggested is that your ascendancy somehow shows a reflection of Time Warner's ascendancy in the combined AOL-Time Warner structure.

What do you say to that?

PARSONS: Well, I think there's an awful lot of spin and, you know hooks and angles that the criminologists want to put on the obvious. The reality is that Bob and I have been working a as a team, as co-chief operating officers, for 18 months, for to two years now, putting this merger together, and then making the first year a success. This isn't about the ascendancy of Time Warner or the ascendancy of AOL. This is about making AOL-Time Warner the most valuable and respected company in the world. And the only way we are going to do that if we work together, all the parts, as one company, and that's our goal, that's our objective.

ZAHN: Mr. Pittman, do you see the same way? Is there no way this show in some way a shift in power to the Time Warner side of the business?

PITTMAN: Well, first of all, I'm not sure which side I'm on. I worked for Time Warner longer than I worked for AOL, so I'd be conflicted in trying to come up with something like that.

Look, as Dick said, I don't think internally, there is any of those discussions going on. I don't there was anything here ever except a merger of equals. There was a financial structure about how the deal was done, but that was certainly not the heart of the deal or the spirit of the deal.

ZAHN: Mr. Parsons, where do you see the company going in the next 10 years?

PARSON: Well, as I've said, we've articulated in our mission statement the goal of becoming the world's most valued and respected company, and I think in order to do that, we have to take what we have here in the United States, which is basically the leading businesses the number one and two businesses of every field which we participate -- movies television, online, magazines, and music -- and translate that into the global community. So there's going to with huge focus on globalizing our operations over the next 10 years. And if we're successful in doing that, and replicating the position in the global marketplace that we have here currently in U.S. marketplace, I think we will be the world's most valued.

And if Bob and I do our jobs right and get some help from Steve and the 90,000 people who are AOL-Time Warner who come to work everyday and try to make a difference in the world, we can also be the world's most respected company.

ZAHN: Mr. Pittman, as you know, there's tremendous pressure by Wall Street on publicly owned companies for profitability. Just share with us this morning some of the considerations you make to have to protect the independence of CNN's news judgment, and at the same time, what you deal with post-September 11th, when you had to give up millions of dollars worth of ad revenue. What is the balance you have to strike there?

PITTMAN: Well, I think you have to understand what's your core franchise, and there's nothing you ever want to do for any business to jeopardizes your core franchise. And when we look at CNN, the core franchise is trust, it's trust with the audience. That's the reason they are watching us right now. They believe us and trust us. You don't get that overnight. It's taken decades to get where we are, and you don't ever put that at risk. And when you need the resources, you have the resources, and you will always have the resources, and if our audience doesn't believe that, we will not have an audience. I this you put journalism first, you put the independence of the journalist, you give them the resources they need to do job, and you do that day in and day out.

And fortunately, I think with Jamie Kelner (ph) and with Walter Isaacsson, we've got great folks at the top who really understand the business, who are watching it day to day. And you know, look at the results, I think there's nothing like CNN anywhere, and that's because one, we have the right people, but we've also got the resources to support it. No one in the news by has the kind of resources this company has.

ZAHN: Mr. Parsons, final question to you.

PITTMAN: And great anchors.

ZAHN: Thank you. Thank you very much. I assume you are referring to the whole team here.

But quick question for you, otherwise I will run over into commercial break and you will be really mad about because you will lose money on this segment.

PARSONS: Never, Paula.

ZAHN: AOL-Time Warner, of course, is trying to buy AT&T's basic cable business at the same time now that Microsoft is announced it's going to underwrite some groups that also want to buy AT&T? How do you perceive Microsoft's action at this point?

PARSONS: Well, let's talk about AOL-Time Warner first. We've been engaged in a series of discussions with AT&T, with whom we're already in partnership in the cable business for over a year about restructuring that relationship, and those discussions are ongoing, even as we speak, as this whole area of broadband distribution is reshaping and consolidating.

As for Microsoft, I only know what I read in the newspapers, and I would like to think that, you know, we're about working with all of our -- we both compete with everybody and partner with everybody. We're such a large entity out there in the marketplace that we have to have relationships that contemplate both competing on the one hand and working cooperatively on the other, and we're hopeful to build that kind of relationship with Microsoft.

ZAHN: Mr. Parsons, congratulations, and, Mr. Pittman. Thank you. Disappointed you didn't stop by. The studio is stunning.

PARSONS: We're on our way over. Donuts or something.

ZAHN: we have stale ones for you. You get the same ones we had earlier this morning.

Thank you, gentlemen. Good luck.

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