Spring 2002 - Haverford College

Jerry Levin
there is a sufficient return, so that shareholders
are investing and, by the way,
that they and their families are doing
okay. That provides the foundation to do
certain things.
KALB Look, Jerry, excuse me, but there’s
a balance between the pursuit of profits,
say at the level of 20 percent a year or even
30 percent a year, or let us say 15 percent
a year, knowing that you could get to 30,
but you go for 15 so you can take the
extra 15 and invest it for example in news.
LEVIN Now, Marvin, I used the phrase
“allocation of resources,” and that’s the
key. For example, I have said, as it relates
to CNN and Time and now NY1, our
local news services, and to a certain
extent that part of AOL that delivers the
news, that we will spend what it takes.
Let’s take each example. At Time Inc. we
have something called People magazine.
It’s the most popular magazine in the
world by far, so they are a leader in magazines.
The same thing is true of Sports
Illustrated. Time’s news-gathering can
command the resources that it requires
because I know we’re getting to make
money over here. We have something
called CNN. Well, there’s TNT and TBS.
There’s a cartoon network, the fastestgrowing
network on cable. The worldwide
news-gathering of CNN can be preserved
and enhanced thanks to the
profitability of these networks. That’s
one way of making the balance. Where’s
the connection with Wall Street?
Everything I’ve said probably doesn’t resonate
with Wall Street, but here’s where
the connection can be made. I believe
in having a committed work force. It’s
helpful for them to understand that the
things that they want to do to achieve
some meaning aren’t done outside the
company, aren’t just done with philanthropy,
but are actually done right in the
center of what they do. Obviously, they
want a paycheck, but they will be more
committed to the organization because
of that, and therefore that will result in
better performance. That’s the one connection
I think for the financial community
that I can make, and I believe it’s
the case. The issue for me is, does that
only apply to media companies because
obviously we’re not in the business of
widgets or furniture making? In our
case, we affect the minds and hearts of
people around the world every minute
of every day. But I still believe this
should apply to every corporation, no
matter what it makes.
KALB And I fully understand that and
sympathize with it. What I’m trying to get
a little more deeply into is this balance
between profit and the public trust and
the public service that you talk about. For
example, last week CNN felt the need to
let 31 news people go. At the beginning
of this year, CNN bought out about 500
people and at that time said that the
bloodletting was over. But then there is
this minor, except to the 31 people
involved, they were let go. AOL in August
let go 1,200 people. You talked about Time
magazine a moment ago. It cut its research
library. That research library, I know an
awful lot of Time reporters who’ve lived
on that, and that was a matter of great
concern. It couldn’t have cost that much
to keep it.
LEVIN Well, let me start. Let’s start with
the research library because I used it my
entire career. We had a wonderful clip
library. You could get a file practically on
anyone and I loved it. Now we have all of
this automated.
KALB But some people like clips. I mean,
really, just because…
LEVIN No, all the data that was in that
library is now available online, and rather
than having a central, corporate clipping
service, Time, People, Fortune, Sports
Illustrated, all have access to this. It’s
probably the finest online library in the
world. We also have 20 million photographs
in the Time & Life building that
are fully catalogued and have the most
interesting kind of taxonomies, so you
can go in and get them. As for CNN,
Walter Isaacson…
KALB Who is he?
LEVIN Walter was one of the finest print
journalists in our company and is now
heading CNN’s journalist operations.
Walter is making his allocation of
resources. He’s hired 175 people for certain
areas that he’s emphasizing. Examples
are Aaron Brown, Paula Zahn, and he’s…
KALB I wanted to ask you about that.
LEVIN And he’s deciding that there are
other areas that in his journalistic judgment,
not financial judgment, where he
must hire more people. At the beginning
of the year, CNN decided to build up its
Internet, particularly the Internet side of
CNN, cnn.com, because with the AOL
Time Warner merger, we are essentially
able to use the AOL infrastructure all
throughout the Time Warner Internet
services. That’s what that primarily related
to.
“No, no, this is an essential part of American journalism. There was a Lucean
tradition that, where it really counted, you’d spend the money. That’s the premise
that’s worked its way through Time and now CNN. I’m very comfortable with the
fact that there appears to be a tension between dogged financial performance and
delivering the highest-quality journalism.”
26 Haverford Magazine