Discovery Appoints New Chief
Friday, November 17, 2006
Silver Spring's Discovery Communications Inc. hired NBC Universal executive David M. Zaslav, a longtime friend of company founder John Hendricks, to replace outgoing chief executive Judith McHale.
Zaslav is the second high-ranking NBC executive to leave for Washington in two days, following Randy Falco on Wednesday, who will take over AOL from chief executive Jonathan F. Miller. NBC Universal said last month that it will cut 700 jobs and slash $750 million from its budget by the end of 2008, as it trims costs to pay for expansion into digital delivery of content.
In an interview yesterday, Zaslav said the timing of his departure from NBC Universal is coincidental with that of Falco, its president.
McHale announced her resignation earlier this year and said she would stay as head of the cable network until a new chief executive was hired. She has not elaborated on her post-Discovery plans. There was speculation that she would help longtime friend Sen. Hillary Rodham Clinton (D-N.Y.) on a presidential campaign, but Discovery said such a move is unlikely.
Donald A. Baer, Discovery's vice president for strategy and development, will leave the company shortly after McHale, Discovery said earlier this month.
Discovery's programming, such as Animal Planet, the Travel Channel and TLC, reaches 1.4 billion subscribers in 170 countries. It is a sign of the firm's growth and status in the industry that it can regularly attract high-level network talent such as Zaslav and former CBS executive Billy Campbell, president of Discovery's U.S. networks, hired in 2002.
Zaslav, head of NBC Universal cable and domestic television, has worked at the network since 1989, when he helped launch CNBC. He met Hendricks two decades ago when he was creating Discovery and Zaslav was a Wall Street lawyer.
"Working with John gave me the fever," Zaslav said in an interview yesterday. "I went back to my office and thought, 'I've got to get into the cable business. I want to do what John's doing in Washington.' "
Zaslav said he called NBC Universal chief executive Robert C. Wright, who was then heading Cox Cable Communications, and got into the cable industry. Wright came to General Electric Co. in 1983, three years before GE bought NBC, and Zaslav joined NBC in 1989.
Zaslav said he has remained friends with Hendricks ("a mentor") and has served on boards with him, including that of TiVo Inc. Zaslav said he began talking to Discovery over the summer when it became clear McHale would leave. Zaslav will take over Discovery sometime in early 2007; McHale will leave Dec. 1. Hendricks will serve as interim chief executive.
Hendricks and Zaslav have not discussed the possibility of privately owned Discovery going public, as has been long speculated, Zaslav said. And even though Discovery has partnered with NBC -- Discovery programmed NBC's Saturday morning children's block, a relationship that ended this fall -- Zaslav gave no hint of future collaboration between NBC and Discovery.
Zaslav joins Discovery as the company's revenue has climbed over the past year while income has leveled off. The company's third-quarter earnings report, released Monday, showed operating income at Discovery Communications of $160 million, compared with $166 million in the same quarter of 2005. Third-quarter revenue this year was $722 million, up from $639 million in the year-ago quarter.
Discovery Communications has a complicated ownership structure. It is half-owned by Discovery Holding Co., which was spun off from John Malone's Liberty Media Corp. last year. The rest of Discovery is in the hands of Cox Communications Inc., Advance/Newhouse Communications Inc. and Hendricks.
"I have had the pleasure of knowing David for over two decades since he first helped me in the early days of Discovery as a bright, energetic young lawyer who enthusiastically embraced our brand and worked tirelessly on our key programming and distribution deals," Hendricks said in a statement.