Cable Report: Atlanta Falcon

The fall 2001 negotiations between Turner Broadcasting System Inc. and the National Basketball Association over a new contract for TV rights to the games were taxing from the beginning. For all intents and purposes, TBS was a new and different company, having only been incorporated into the unwieldy media giant AOL Time Warner that January. With new executives, new resources and new promises to fulfill on behalf of the parent company, TBS was in the middle of an evolution, and sports president Mark Lazarus was unsure of what his company’s, or the NBA’s, appetite would be for new ideas that would be brought to the table. “He had a hard time,” says NBA Commissioner David Stern. “We were dealing with TNT, which had become a drama channel, and a new AOL component to boot. Mark had to negotiate for his company using a relatively new part of the brain.”

Negotiations commenced in mid-September and lasted for almost four months, with Lazarus and his colleagues meeting with NBA executives a couple of times a week in Atlanta and New York. The discussions became strained at times, after ESPN parent Walt Disney Co. entered its bid to share rights with TBS’ outlet TNT—and wanted elements that didn’t gel with Lazarus’ notion of what was right for the game. Turner almost walked.

“It gives me the shakes just to think about it,” jokes Stern, recalling the tense, drawn-out meetings. But what resulted was a six-year, multifaceted, $4.6 billion deal that gave Turner far more than it ever had during its relationship with the NBA. Turner won more regular-season games, the rights to the Western Conference finals and the rights to carry the NBA All-Star game for the first time on cable, as well as an 11 percent stake in the new cable network NBA TV and the integration of AOL into the deal. “There are an amazing number of moving parts to this deal, but Mark is indefatigable,” says Stern. “He has the rare ability to strangle a problem in a constructive way.”

A SKILLED NEGOTIATOR

At first glance, Lazarus does not look like the guy who should be running things. He is the boy next door, the best friend and the frat brother with an easy wit and honest face. He leaves work to have lunch with his kids and invites the wandering minstrels and salesman who visit TBS in Atlanta into his home. He is a “good guy,” says anyone who is asked about Lazarus. But at 40, Lazarus is good at what he does—not despite these things but because of them.

TBS Inc. has undergone various mutations over the years, as different companies acquired it and myriad executives came and went. But Lazarus, who joined the net in 1990 as a sports account executive, has remained, steadily rising to the top. Lazarus reached the apex of the sports division by the end of the decade, then went to the front lines in late 2001 when he was appointed president of entertainment sales and sports. He was promoted again in March to the newly created role of president of Turner Entertainment Group.

And because Lazarus doesn’t just get promoted from one job to the next but accumulates new responsibilities as he climbs the TBS ladder, he is the first executive to oversee all the operations of the entertainment networks—TNT, TBS Superstation, Turner South and Turner Classic Movies—including programming, ad sales and marketing, as well as sports programming and sales. (Cartoon Network and Boomerang are in a different division, of which Lazarus will cede control once a new president of animation is named.) “I took the single biggest bet on a guy I did not know as well,” says Phil Kent, chairman of Turner Broadcasting, of his promotion of Lazarus. “But I knew I wanted to integrate programming, sales and marketing, and to me the most important thing was to have a good leader who had the best big-picture understanding of how our business worked. Mark is the best package.”

But following several executive departures earlier this year that opened the doors for Kent, Lazarus and CNN News Group president Jim Walton, all eyes are on TBS to see if it has finally achieved stable ground.

Most will agree that Lazarus is one of the top sports executives around. But the big question is whether a sales guy such as himself is capable of taking over program development for such large entertainment networks, in addition to all his other responsibilities. (Brad Siegel, who was president of entertainment before resigning in March, could be characterized as a true programming guy. Sales remained separate under Lazarus and, before him, Joe Uva.)

It is true that Lazarus’ biggest challenge will be to develop a strategy for original series on the networks, but those who have worked with him over the years have a great deal of faith that he is capable of handling the job. Though Lazarus is not a Hollywood guy, Kent points to his finesse in building TBS’ sports lineup and creating programming franchises around sports, including Inside the NBA. “Sports is as much programming as an original series or film,” says Kent. “He understands that creativity and commerce go hand-in-hand. I think he is going to surprise a lot of people.”

Lazarus has already made several trips to Los Angeles to connect with the agents and the talent needed to create original programming. (Carrying the Western Conference finals with the Los Angeles Lakers in the playoffs has helped open lines of communication, Lazarus says.)

Observing him during two programming meetings, it’s clear Lazarus has an understanding of what the TBS networks need— and don’t need. During one pitch meeting in which Lazarus and Steve Koonin, evp/general manager of TNT/TBS, were presented with what this reporter thought to be an ill-conceived idea, Lazarus cordially told the producers why it wouldn’t work for TNT while adding he was open to future discussions. But demonstrating that he’s shrewder than he looks, Lazarus didn’t let the pitchmen go until he’d asked for a favor. “Mark gives a little to get a little,” says Larry Novenstern, svp/director of national buying for Deutsch. “He wants to win, but he doesn’t want the other guy to question his end of the deal.”

In another meeting, with Ken Schwab, svp/programming, acquisitions and new media, Lazarus went over the programming schedule that AOL sibling network WB presented during its upfront. He scanned it for any series TBS networks might be able to share by airing them in a delayed window, like TNT has done with WB’s Charmed. He also wanted to find out which shows WB didn’t pick up, in case one might fit with a TBS net. “I have been around programming on the sales side, and I know why it’s valuable,” he says. “The part I am learning is how to create the finished project.”

Among Lazarus’ main objectives are strengthening programming—acquired, original and sports—across the networks and refining TBS Superstation, which has always struggled with a brand identity. He also wants to build upon the entertainment division’s high-definition broadcasts, which so far have only been used in sports (the NBA All-Star game in February was aired in HD), and to better address the country’s diverse population. “African-American and Hispanic populations are emerging market segments and we need to know how to serve them better,” he explains.

Additionally, Lazarus says, he will keep pushing to close the gap between the price broadcast networks and cable networks can charge for inventory. A large part of that effort is Turner’s Millennium III project, carried out with Nielsen Media Research, which identifies the point at which advertiser dollars are no longer efficient when spent on broadcast inventory. Barry Fischer, Turner’s evp/marketing and research, has been visiting agencies with that research tool since early April, to demonstrate the point Lazarus hopes to drive home: “The old model for television is broken. If you look across the aggregate of broadcast, no money is being made. With the size of our networks, we hope to be a leader in effecting change for cable.”

Lazarus has already created change with regard to the structure of Turner Entertainment, the most significant move being the appointment of Koonin to oversee both TNT and TBS Superstation (TBS general manager Dennis Quinn was named an evp in Turner Broadcasting’s operations and strategy unit). The move goes against the Turner—and industry—tradition of having separate managers for different networks within a company. But Lazarus, who restructured the sports division while in charge, is a proponent of the integrated operation model. “I very much believe that it makes you that much smarter in how you do business,” he says.

Largely thanks to Koonin, TNT is in good shape, with a solid brand, high-rated sports, blockbuster theatrical movies, solid original films and, of course, the ratings workhorse Law & Order. TNT is the top-rated basic cable network in prime time, having grown its delivery of viewers 2+ by 36 percent in May (against broadcast sweeps) to net 2.9 million viewers. TNT is also the top network among all adult demographic groups.

TNT is up 10 percent for the 2002-03 season (Sept. 23–May 21), with 2.2 million viewers 2+. The NBA has certainly helped lift the network, growing household ratings and delivery during the regular season to a 1.2 rating (1.03 million). Viewership was bumped significantly following the All-Star game on Feb. 9, which is still the highest-rated program on basic cable this year, delivering 10.8 million viewers 2+ and 6 million viewers 18-49, TNT’s target audience. “Mark really led a multidisciplined effort to make sure that the All-Star Game was all that he hoped for, and it was a huge success,” says Stern. “We have had a spectacular season, and the playoffs are soaring. Those guys nailed the sales numbers and then some.”

TNT’s coverage of the Western Conference Finals (44 games), which ended May 29 with a win for the San Antonio Spurs, earned the network an average 3.2 household rating—27 percent growth over last year’s 2.5 for the 27-game playoff package. The playoffs grew 24 percent in delivery of 18-49- year-olds with 2 million viewers.

“All that experience will serve me well as we enter the new programming arena,” says Lazarus. “If we take calculated risks, which is what we did with the NBA, we can do great things.”

The competition tends to complain that TNT’s ratings success has everything to do with Law & Order, which the network strips across the schedule. To which Lazarus responds: “What’s your point?”

“TNT is building a base to get into original programming, but we are not desperate,” says Koonin, adding that he is looking down several avenues to find the right projects for TNT and TBS. “Broadcast is looking at us now as a partner, not a back door, and they are coming to us with ideas that we have never seen before,” he says. “If you want to launch something, this is a good place to do it.”

Though not an original program, TNT just brokered a deal to air NBC’s freshman series Boomtown, starring Donnie Wahlberg, Jason Gedrick and Mykelti Williamson, in a delayed window beginning in the fall, when the show’s second season launches. The first season is airing on TNT this summer.

TNT has successfully established itself as the network for original movies. The epic Caesar, starring Jeremy Sisto (Six Feet Under) in the title role, Christopher Walken, Chris Noth, Valeria Golino and Richard Harris in his last role, airs June 29-30. Also on tap for the summer are Second Nature (June 22), with Alec Baldwin, and Prince Charming (July 13). A Chris Noth project, Bad Apple, has not yet been scheduled.

As for TBS, Koonin is still figuring out what makes the net tick. “TBS means a lot of things to a lot of people. It is still a local network in many respects, which is hard to overcome. We need to make it relevant,” he says.

“Over time, Steve will figure out how to balance the two networks,” Lazarus says. “Hopefully, one of my greatest skills is in acquiring good, creative people who will keep the company going.”

In addition to Koonin’s appointment, Lazarus tapped TBS International co-president David Levy to oversee entertainment ad sales and sports. Trish Frohman was named svp/sports sales and Linda Yaccarino vp/general sales manager of TBS and TNT.

It was Levy who hired Lazarus 12 years ago when he was starting the sports division. “I needed someone I could trust and I knew him when he handled the Miller [Brewing Co.] account as a buyer for Backer Spielvogel Bates,” Levy recalls. “When I hired him, I told him we could do great things together, and 12 years later we still are.”



PEOPLE PERSON

More than his sales savvy or his creative instincts, what has always served Lazarus well, and will continue to serve him, are his people skills. Deutsch’s Novenstern has known Lazarus as buyer (he was also at BBDO) and as a seller when he was svp/sales at Sportvision a few years ago. “My lasting impression of Mark is that whether I was buying media or selling him technology, he never for one second treated me differently,” says Novenstern. “Once, when I was trying to do a deal with Turner for Revlon, my boss asked me, ‘What’s up with this guy?’ And I said, ‘Don’t worry—it’s Mark’. He is just a good guy.”

“There is no subject where we can’t go to Mark and say, ‘We need this provision or that change, even if it’s not in the contract,'” says Stern. “We have developed that kind of trust, where he could say the same thing to us.”

Lazarus says he learned it all from watching his dad, John Lazarus, the onetime head of sports sales for ABC Television, and later the head of sales at Fox. Most recently, he was director of national broadcast for True North Media, before retiring at the end of last year.

Sitting with Fischer, going over the most recent agency meetings about Millennium III, the conversation turns to the 2010 Olympics, the rights to which TBS has decided not to pursue. The conversation calls up a memory for Fischer, who made his last deal as a buyer during the 1984 Olympics. “It was great,” Fischer remembers. “I held my money and went in at the last minute and did a huge deal for Procter [& Gamble] for nothing.”

“Yeah, and I couldn’t buy books that year,” Lazarus jokes. “You screwed me.”

Lazarus’ father was the seller on the deal.

Lazarus grew up in the business. He had summer jobs as a cameraman for ABC Sports and a boom operator for the soaps All My Children and Ryan’s Hope. All the while, Lazarus watched his dad as he deftly maneuvered sales negotiations. “The one thing I learned from my dad was how to deal with people—to treat and be treated with respect,” he says. “I spend a lot of time developing relationships. They are extremely important to me.”

As his day of being trailed by a reporter ends, Lazarus gives an enthusiastic tour of the studio where the analyst program Inside the NBA—a show of which he is clearly proud—is filmed. Outside the studio, in a game room filled with foosball and ping-pong tables, where talent like Charles Barkley can cool their heels mid-game, Lazarus offers up a one-on-one basketball challenge on one of those arcade games with the mini-hoops. It’s a tie, but he is as ebullient as he has been all day.

Maybe Hunter S. Thompson was wrong about the TV business. Maybe good men don’t die like dogs as the pimps and thieves run free. Maybe, just like Lazarus’ namesake, they rise.

• NEWS: CNN, Headline News, CNNfn, CNN.com, CNN Airport Network, CNN International, CNN en Español, CNN Newsource, CNN Radio and CNN Radio en Español.



• ENTERTAINMENT: TNT (and two international offshoots), TBS Superstation, Cartoon Network (and three international offshoots), Boomerang and Turner South.

Turner Broadcasting at a Glance

• SPORTS: Atlanta Braves (Major League Baseball), Atlanta Hawks^ (National Basketball Association), Atlanta Thrashers^ (National Hockey League), Turner Sports



2002 Financials* (in millions)

Revenue: $7,655 EBITDA+: $2,032 Operating Income: $1,839

Megan Larson covers cable as a senior editor for Mediaweek.