In a conference call laying out AOL’s plans for The Huffington Post, Arianna Huffington was unequivocal about her plans, saying she wanted to stay at AOL “forever. I want this to be the last act of my life.”
But two other key HuffPost executives, CEO Eric Hippeau and chief revenue officer Greg Coleman, won’t be joining her as part of the deal. And Huffington herself might not have much incentive to stick around for very long, even with her new job overseeing all of AOL’s editorial content.
There are conflicting reports as to what Huffington’s actual cut is. Drudge Report puts it at $18 million, with a $4 million salary on top of that, while an analyst for Needham & Co. told Forbes.com it’s probably closer to $20 million-$30 million. Either way, it doesn’t appear that the deal has been structured in a way that gives her any financial stake in AOL’s long-term success.
It’s one of the many risks of the deal for AOL. The beleaguered company is clearly banking on keeping Huffington around for at least a little while, which is probably why it gave her oversight of all AOL content. Should she leave, the company will have to figure out whether HuffPo can go on without its eponymous founder and whether there’s anyone else who can make AOL successful as a content company.
“She’s a great brand and clearly has accumulated a lot of popularity,” said Patrick Kenealy, managing director at IDG Ventures SF. “It’s tough to have been the boss and then not be the boss.” If Huffington leaves, he said, “it’s tough. I don’t know how much control they’ll give her, but you don’t want to sign the Rolling Stones and lose Mick Jagger.”
Iconic media figures often eventually leave their acquiring companies. Ted Turner stuck around Time Warner for 10 years before stepping down. The Weinstein brothers stayed with Miramax for 12 years after selling it to Disney. In both of those cases, though, those figures had a financial stake in sticking around a while. Turner had stock, and the Weinstein brothers had a lucrative payout plan. It doesn’t appear that Huffington will have the same, other than unvested AOL stock options she’d receive in return for any unvested HuffPo options. (The same holds true for all those with unvested HuffPo options.)
AOL has a little experience with what happens when it inherits big personalities as part of an acquisition. Just a few months after it bought Techcrunch from founder Michael Arrington, Arrington was sounding off against Engadget, a sister blog at AOL.