MEDIA WATCH: Job security at forefront as media stays on AOL Time Warner's Case

Back in September, you couldn't pick up a paper without seeing some headline calling for the removal of AOL Time Warner chairman Steve Case. Coverage reached a fever pitch just before a late September board meeting in which Case survived a key vote of confidence.

Back in September, you couldn't pick up a paper without seeing some headline calling for the removal of AOL Time Warner chairman Steve Case. Coverage reached a fever pitch just before a late September board meeting in which Case survived a key vote of confidence.

Media Watch recently revisited the topic, reviewing coverage throughout October to see how the reporting on Case might have changed since the meeting. Judging from the sample of coverage analyzed, the media is still putting Case on the hot seat. Despite the public statements from the board of directors, the media seems to have found it hard to cover Case without discussing his job security. More than two-thirds of the reports still noted that Case is under considerable pressure to leave the company. BusinessWeek (October 14) quoted an insider as saying, "Case is hated in his own company by executives whose stock options have lost fortunes." In citing the reasons why some people believe Case should leave, reports pointed to a number of factors that have gone wrong at AOL Time Warner since its creation. BusinessWeek Online (October 25) pointed out the role that the company's image and reputation play in the considerations: "The media giant's reputation has been sullied by accounting investigations, management turmoil, unrealistic financial goals, and serious growth problems at internet division America Online. More than anything, AOL Time Warner needs to restore credibility." Many reports focused on the role that Ted Turner, AOL Time Warner's largest shareholder, is playing in this unfolding drama. US News & World Report (October 28) bluntly stated, "Turner has been leading a behind-the-scenes push to overthrow Case." A number of other articles reported the same news, so Turner's efforts aren't very behind-the-scenes, but they do remain significant. Turner is said to be angered by reports that Case and AOL may have misrepresented themselves during the takeover of Time Warner, due to alleged accounting irregularities that have since come to light. Furthermore, Turner's anger is also said to stem from having personally lost more than $6.5 billion in company stock. Case drew media attention as a keynote speaker at the Goldman Sachs Communicopia Conference in New York in early October, announcing his intent to become more active in the firm. Still, coverage continued to circle back to his job security. When reports circulated in late October that Case had floated the idea that he and the AOL unit should split from AOL Time Warner, they were interwoven with the failure of the AOL Time Warner merger and Case taking the blame. Most industry and Wall Street analysts have shot down the idea of a spin-off, and AOL Time Warner itself indicated there were no plans to pursue that path. Some reporting used the opportunity to suggest at least half of the plan sounded good: "Case needs to go, but without AOL" read a headline in the Contra Costa Times (October 30). The media remains pessimistic about Case's future. A number of articles predicted Case has just a few more months left as chairman before action is taken. If AOL Time Warner doesn't take more concrete steps to assure the public of its faith in Case, the momentum could build even further. However this plays out, Case faces a considerable PR challenge.
  • Evaluation and analysis by CARMA International. Media Watch can be found at www.carma.com.

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