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American Morning

Did Gerald Levin Read Writing on the Wall?

Aired June 04, 2002 - 08:44   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.
ANDY SERWER, CNN ANCHOR: When Gerald Levin announced he was walking away from his job as CEO of AOL/Time Warner, the parent company of CNN, he said he wanted the poetry back in his life. But an article in "Vanity Fair" says what Levin may have really been reading was the writing on the wall.

Nina Monk wrote the story for "Vanity Fair," and she's here with me now.

Nina, welcome to "American Morning."

Great to see you.

NINA MONK, "VANITY FAIR": Nice to see you.

SERWER: I should also point out that this story is close to home. Not only is AOL the parent company of CNN, but also the parent company of "Fortune" magazine, where I work and where you also worked?

MONK: Once upon a time, that's true. I think every journalist in America at some point may have worked for your company.

SERWER: If they're lucky. We'll leave it at that.

So, Nina, why don't you talk about this pivotal moment where Ted Turner confronted Jerry Levin at the board meeting that's is in your article.

MONK: There had been tensions building up for some time. As you know, ad probably most of your viewers know, after the merger between AOL and Time Warner, and after this great buildup and the stock going up to an extraordinary level, things kind of started crashing pretty quickly. And by last fall, the stock had already dropped in half from its high of the summer before, and Ted Turner in particular was on a rant. And he was angry about the stock price. He was angry about the fact there was poor management, that there was a lot of division among the company, and he was especially mad at what he perceived to be Jerry Levin's very poor management leadership of the company.

And at a board meeting he decided to effectively blow up at Jerry Levin and accuse him of destroying the company and undermining its employees, and especially forcing the stock price to collapse.

SERWER: OK, you're suggesting this is what led to Levin's ousting by Steve Case, is that correct?

MONK: It was really the spark that set things off. I think that people certainly have been talking for some time. There had been folks on the AOL side who thought from the beginning that Jerry Levin was not the right CEO. But as part of the agreement to do the deal, Jerry Levin had to be CEO. That was one of the concessions. But so there had been a lead-up to this.

And by Turner stating publicly and boldly that Jerry Levin was a terrible CEO and that he had to be ousted, it, as one source said to me, made it clear suddenly that the emperor had no clothes.

SERWER: The AOL spokespeople are disputing some of the assertions. However, we should point out that in "Fortune" magazine, a story a while back, also suggested that he may have been pushed out. You had more details. What should AOL shareholders expect going forward? They're very distraught now. The stock is way down. Can the company regain its footing?

MONK: I'm not a stock picker. I'm a journalist. I'll start by saying that. That said, this is a tremendous company at its core. It has some of the finest entertainment and media assets in the world, not just in the country. Between AOL, which is still the largest Internet company, despite its problems, between Warner, the movie division, between the magazine publishing and so on, it's an extraordinary company.

That said, I think s going to be few years before we'll know whether they can get their act together. If you're a long-term investor and you sort of see far out into horizon, I would say the bets are pretty good that the company will come back.

SERWER: OK, Great. Nina Monk, great to see you.

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