Still digesting a mega-merger, Time Warner's comms team was further tested by Carl Icahn's attack.
It was last June when Ed Adler, EVP of corporate communications for Time Warner (TW), started hearing the rumors: Carl Icahn, they said, was coming.
"When you hear rumors, you do not believe them," he muses. "But sure enough, they were right."
A couple of months after the rumors began, billionaire financier Icahn formally launched his assault on TW, seeking to break the company into four parts, cut costs, and replace top management. For TW's communications team, the high-profile assault by one of the most famously aggressive investors of all time sparked a months-long public fight that pitted Icahn's brash and forceful PR strategy against the more restrained maneuverings of the media world's biggest titan.
Though Adler had previously dealt with shareholder revolts during the course of his long career with TW and its precursors, he refused to approach the problem with a preset playbook.
"They're all different. So there wouldn't be a [prepackaged] plan for this, and there wouldn't be the same plan if it happened again," he says. "Initially, you're dealing with it, but you're not planning ... First you're just reacting, then you are reacting in a more strategic way. That's what happened to us."
The company's bulk, and historic business missteps, made it ripe for portrayal as the big bad wolf. But Adler and his team had been working for years to tout the accomplishments of CEO Dick Parsons and president and COO Jeffrey Bewkes, always stressing to reporters the steps management was taking to right the ship after the debacle of the AOL merger. Those relationships paid off.
"The biggest, most important groundwork [we] laid...was several years of educating the press about management's accomplishments," says Susan Duffy, corporate communications VP. "There was this basis of respect and trust."
Battling a billionaire
Icahn's style generated its own press. He's traditionally shunned outside communications help, opting instead for bold pronouncements. For the TW battle, though, he hired New York-based Source communications for media relations and strategic advice. (None of Icahn's team would comment for this story.)
But while Icahn was condemning the media giant's management - Adler says "his strategy was to shoot all kinds of bullets at us, and he wanted us to shoot back" - the company's leadership decided to follow a restrained path. "Top management, starting with Dick, was clear: 'We're not going to be defensive,'" says Duffy. "We got a lot of credit for that."
Adler's team kept their public statements formal.
"You could have responded aggressively and angrily...or you could have reminded people, which we did from the start, about the accomplishments of management," says Adler. He stresses, however, that it was a strategic decision. "Whenever you're in the press every day and the impression is that you're not responding - no one sees the long game. They only see the day to day."
The "long game" involved proving to the satisfaction of both the media and Wall Street that Icahn's calls for change were unfounded. TW brought in Kekst & Company, a longtime agency partner, to help it connect the dots for reporters and investors alike.
"The link between IR and media relations was very important," says Lissa Perlman, the Kekst partner who works most closely with TW. "The press coverage is to some extent driven by the investment community, so it's almost circular."
Adler agrees that the Icahn fight "played out mostly in the press," and that investors - the most important constituency in the final equation of any shareholder activist situation - took their cues mostly from the media. And years of relationship-building finally allowed TW's message to subtly triumph. Icahn and the company came to an agreement in February, but the classic corporate raider failed in his most ambitious goals.
"[Parsons] always says that in a war, both sides suffer casualties," says Adler. "And he didn't want the company to go through what that would have meant."
Via e-mail, Parsons tells PRWeek, "The Icahn situation merely underscores the importance of our corporate communications." In the four years he has been CEO, which have been largely occupied with the turnaround of TW following the AOL merger, "The results are clear to anyone who follows us: There has been steady and measurable improvement in the perceived credibility, transparency, and reputation of [TW]."
Jon Friedman, media editor of MarketWatch, has covered the press and Wall Street extensively.
"Some of the credit should go to Ed Adler, who has run TW's PR effort for a long time," he says. "TW did a kind of rope-a-dope defense on Icahn. The company let Icahn throw verbal punches until he was spent and gave it an advantage, to a degree."
A challenging future
Now, TW's greatest challenge may be adapting to the uncertain digital future, one in which many predict that media conglomerates like TW could face extinction.
Duffy and Adler say that the one of their primary communications challenges is to follow the changing business model as it works to identify the trends of a shifting media landscape and develop new ways to "monetize" the nebulous world of micromedia.
Icahn's charge didn't topple TW, but it did call on all the communications expertise it could muster. Adler, for one, is just glad it's over.
"I thought the coverage in general was overblown, but it always is," he said. "Everything we do is magnified a hundred times."
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