Making the Peace At Turner and WB

Jamie Kellner’s appointment last week as chairman and CEO of Turner Broadcasting was described by one colleague as “the minnow swallowing the whale.” But AOL Time Warner insiders say that co-COO Bob Pittman is convinced Kellner is the one executive who can corral the media giant’s disparate cable and broadcast properties and get them to operate with a synergy that some say is long overdue.

For several years prior to the AOL-Time Warner merger in January, Time Warner TV properties such as Kids WB! and Turner’s Cartoon Network sold advertising against one another instead of seeking to complement each other. WB sales executives have accused their Cartoon counterparts of not being team players in the children’s TV business. And in adult programming, “there have been situations in prime time where the WB has competed against [the Turner networks], members of the same family, for revenue. It shouldn’t have happened,” a WB exec said.

By choosing Kellner, the founder and CEO of the WB, to also run all the Turner properties, Pittman is sending a clear message to all the company’s television executives: From now on, all AOL Time Warner TV units will cooperate with one another, and the WB will be part of the mix.

Pittman’s commitment to Kellner was evident in his comments following the appointment. “I have known Jamie Kellner for 20 years,” AOL TW’s operating chief said. “He has an outstanding record of building networks. Under his dynamic leadership, the WB has been one of the most exciting new forces in television.”

Pittman added that he has “great confidence” in Kellner’s “leadership, vision and ability to deliver results.”

One sign that Pittman’s synergy philosophy is taking hold came last week at Kids’ WB!’s meetings with advertisers in preparation for this spring’s upfront selling season. Following one of those sessions, Jed Petrick, the recently named president of the WB, said: “If an advertiser wants to do business with both of us [Kids’ WB! and Cartoon Network] together, let’s do it. We’ve been working together recently to learn each other’s businesses. Our reach together in the kids’ field is second to none.”

While Petrick and the WB sound willing, getting the Turner side to cooperate could be a challenge for Kellner. A top-level executive from another large TV company that recently went through a similar consolidation said that because the broadcast networks have “thumbed their noses” at cable for so many years, long-running animosity could upset AOL TW’s synergy strategy.

The executive also wondered “how you leverage a company that sells 4,000 30-second spots a year [the WB] into one that sells 15,000 spots a year across various cable networks. I’m not saying they’re not going to get there, but it certainly will not happen by this year’s upfront, and they probably won’t get there in a year.”

On the surface, beyond the obvious potential cooperation between the kids program units, the Turner cable networks and the WB would not seem to have much in common. Several media buyers said that simply being offered packages across broadcast and cable units has not generated significant incremental revenue at other media giants like Viacom and Walt Disney Co.

One AOL TW television executive suggested a possible example of how cross-promotion across the company’s broadcast and cable properties could help grow ratings and ad revenue. The WB is developing a drama series called Smallville, about the life of the young Superman. The Warner Bros. animation house could create a cartoon version of Smallville to run on either Kids’ WB!, the Cartoon Network or both. TNT or TBS could air old Superman movies, and each network would cross-promote.

Kellner said he has no such specific plans yet for synergy between the WB and the Turner cable properties.

Kellner had recently said he was “planning to step back” from the WB and let his team run the network. He promoted Petrick to the new post of president and upped Jordan Levin to WB entertainment co-president with Susanne Daniels. Bill Morningstar was tapped to succeed Petrick as senior vp of media sales.

Turner’s new chief said he would not have taken his new job, which will require him to move from Los Angeles to Atlanta, unless he had the backing of company founder Ted Turner, now AOL Time Warner vice chairman. “Ted and I have had our public differences, but we’ve been friends for many years,” Kellner said. “I would not have taken this position if I did not have Ted’s blessing.”

Kellner also took issue with media reports that Terence McGuirk, who he is succeeding as Turner CEO, did not step aside voluntarily. McGuirk, who is now vice chairman, “will have important responsibilities with the company, which we will be announcing shortly, that will be less time consuming, which is what [McGuirk] wanted,” Kellner said.

In his new cable post, Kellner will be competing directly with Barry Diller, chairman of USA Networks and the executive who, as Fox Broadcasting chairman, hired Kellner in 1986 as president/COO of Fox. Kellner downplayed the rivalry with Diller, saying only: “USA is a good property.” Those familiar with the situation say Kellner has not had much contact with Diller since their Fox days, and the two are no longer close. “Everyone who knows Barry knows he’s very hands-on and very competitive,” said a former Diller colleague. “It’s going to be an interesting competition.”