David, Frank, David Brooks discussed on KindredCast: Insights From Dealmakers & Thought Leaders
You have to master a number of different industries. So I was fortunate enough to both cover Wall Street than I was an editor on the front page desk, and then you had work on Cynthia. Sizing these big stories that could've come from the farm bureau's or the Washington bureau. So I think it was at still a very young age. Still in my twenties, a great learning experience. And then when I hit expressed to my bosses at the time a long-term desire to be on the business when a chance the Wall Street Journal, and her started talking about publishing the financial magazine. They said to me, my bosses at the journal so, well, this would be a good opportunity for you on Choubey our lead Representative on this project, and that led to the push into the business, interestingly enough that project, which was called thus mart money magazine, which we brought out in nineteen ninety one I think Hearst person that was put on that project. David carey. And he did a fabulous podcast with you, and David went on to run our magazine division in a fabulous way. And we've been good personal and business friends over since. Now, his graduated to becoming a student at Harvard. Now he is on the Harvard campus and advanced leadership program, and I have a son, who's on the Harvard campus as sophomore great from journalists to business person, and then obviously in chief executive senior executive Hertz corporation along the way. What could you point to for your ascendancy, that was an accolade, or sort of a bold Beth that you've made that got everyone's attention saying, well, this person really could lead this company. I don't know that it was anyone thing. And I think most of aside from the way you dress. The. Look, a lot of things in live his lock in being in the right place at the right time as long as you're working hard and trying hard and, you know, I think smart money, the fact that smart money ended up being a successful launch with myself, as the launch editor in David as the launch publisher. I think another thing that actually kinda helped me in an odd way, David decided after we were up and running a couple years to move on. And he joined nother fabulous media company at Conde nast when he moved on Frank Bennett, who has been my principal mentor in life. And I've been very fortunate in that Frank said to me, would you be interested in taking over David's business, I'd responsibilities, and I guess I was around thirty one at the time and I very much was so that was my first time with that. I was fully on the business, and it was really a lucky turn of events both the David decided to move on. And that Frank decided to give me a chance while it's worked very well. And now as the CEO, would you say that the most innovative moves that you've made or the boldest move may have been in the businesses area way from media? I think the biggest decision that Frank and myself and our board med was to push harder in to what we call business media, which is the Fitch and the medical and the transportation data off where businesses because I think it was relatively clear back, then this was early two thousand eleven that the entire consumer media sector some of which were still growing at a rapid rate. Certainly ESPN was knocking the cover off the ball and an e was blowing through their numbers every year PA positively. Yes. But I think it was clear what we were seeing happening with newspapers getting disrupted by technology and magazines getting disrupted by technology and yellow pages. Getting disrupt that the same thing was inevitably going to happen to the television business. Maybe not as dramatically because television, is it self digital business, but was going to happen. Something was going to happen to the model and we were getting at that time, roughly ninety percent of our profits from consumer media. So we decided in our board and our management team. It really is in many respects, like a partnership at Hearst of all of various division heads, and senior executives and our board, and certainly Frank. We decided that let's push more aggressively into an area that was already working for a so we had the credibility. We just weren't as big as we felt we needed to be. And now in two thousand nineteen we expect almost forty percent of our profits to come from these e to be businesses. Meanwhile, what we thought would happen has happened, not in a dramatic way. But clearly we're seeing some changes in the business model of. Television that has not in any way. Made it a bad business. It is still a very good business, but it's growth pattern has clearly been altered by the changing technology and media landscape. Could you give us a sense of speaking out, how big hurston, what the diversification, as well as a private company, we reserve, the right not to talk about our profits? We did about eleven and a half billion dollars of revenue and we run at a very respectable margin and about forty percent of that you'd think is you said as businesses in two thousand eighteen it was thirty three percent of our profits came from the business media. It's business media sits tend to have a higher margin. So they're not as big a percentage of our revenue. But of our profits thirty three and because our business media portfolio is growing at a double digit clip while the consumer media side. Is not growing anywhere near that fast. This year we think it'll be about forty percent of our profits. And obviously, if those patterns continue, and we're pragmatist so we don't know. But obviously, we will move and I think we would be in better shape, if we move more toward a fifty fifty balance or even just given the prevailing climate north of fifty fifty in favor of the BBC stuff. So this is what I'm really impressed with, because we all love the media business, and obviously, you have your tentacles, a lot of places in that business, and that's been a legacy part of the company, but to really plot out a diversified model that gives you hand growth and business diversification. The same time, I think if I could be bold is the beginning of your legacy the long way to go. We both fans of writer. David brooks. I've been studying his concept, even off the New York Times up ED's of what he calls his second mountain. We this is a personal development, but even from a business perspective. We all climb. Our first mountain, we've spoken about it a lot, which you reach your core competency, hopefully around our age groups and then you start to hit a valley of thought about what you really wanna be in the future versus where you came from. And that valley is a very self-aware process of what the business looks like and where you wanna go, and then you start climbing your second mountain, which is kind of a scary place to be because not where you came from. But it could be a very joyful productive exuberant experience because it's really taking on a new chapter. Once you have a purpose about that, then it can be transcended. That's how I think about you. But how you're working with hurston transforming the business in your direction? Well, first of all, David Brooks is fabulous and perhaps the best columnist writing today, and like you on excited to hear about his new book, and to read it at hers. I've already read it. Area. You're nothing if not flunked doesn't surprise me at all. I think that it hurts. At least it really is a partnership. I don't look at this as in any way my legacy, again, we're building on William Randolph Hearst, did. And Frank bin ich did, and he still with it. We still have this fabulous group of trustees who are both some retired members of senior management who are still very actively involved, some daily, we're just very blessed all of the divisions of hers, whether it would be Jordan were LeBron Hearst television are thirty three stations or David. And now Troy young running magazines Mark all them who's now our chief operating officer at the corporation, but he ran newspapers for many years. Now. Jeff Johnson neared Kim Lonnie who helps us oversee our entertained before we just have fabulous group of folks, Paul Taylor at Fitch or can great camper. We just have a fabulous group. Of really CEO's of their own business eve, Burton Burton, our chief, legal officer and matures CFL, I'm going to leave somebody out some purpose about this. But, you know, we just have a fabulous group of folks in its collective partnership again. We got a great board. Very supportive will Hearst in the hers family. So it's a collective and really what we've done is really a continuum that starts with the founder. So we're just building off of that to some respects in it. See David Brooks thing on YouTube, so I guess I'm a little familiar to some degree. I think what he could also be talking about, is what people do outside of work, and we all work most of the time. But obviously, there's also can be another leg that doesn't necessarily have to interfere with what you're doing businesswise. But, you know making more of giving back more of a philanthropic commitment, more of the civic commitment. And there again, you know, working at hers, that's just. Baked into the DNA. We are all expected. We've got David carry now up at Harvard in this advanced program, trying to learn more about the not for profit sector that will influence what he does either in his business life or in his private life going forward. Certainly, many of our trustees will is very Finland. Thraw bec- Frank Bennett spin on the New York Presbyterian hospital board for forty years and has served as its chairman served as chairman Lincoln center. So we learned that Franken regard because the chairman of the center, yet for Germany into the center, so trying to follow in his footsteps, there's well and, and, you know, work on things like Lincoln center. I'm also pleased to be on the board at New York Presbyterian, a very a privilege to be on that Boorda, chairman of the Associated Press. So some of that is what one does to make a contribution in areas that are not directly, but can be related to what you. Do in the workplace for sure. I want to talk about the area of partnerships because Hurst has been known over long time with one very notable example, which we're going to bring up of being just a phenomenal partner, contributing partner investor, but one that's very easy to work with, and obviously very productive to work alongside and these referred to ESPN. So Hearst for longtime at a twenty percent owners reviews peon in partnership with Disney, which has been the majority holder, take us through how that came to be, and why that parts of it works so beautifully relation with Disney overall. Well, yeah, I mean we're just so fortunate to be tied. Disney is innovating on so many levels when you're thinking about the great CEO's in general, or particularly great CEO's in the media business. You've gotta start with Bob Eiger. So the history of it is hurston ABC, when it was a stand alone company back in. The early eighties Leonard Goldensohn the phenomenal men who build ABC and Frank Bennett came together and decided to have television partnership, that would aim at this new thing called cable television and out of that partnership came the lifetime channels, and eventually the history channel Leonard also bought for ABC ESPN, then capital cities, the fabulous team of Murphy, and Burke with Warren Buffett as their biggest shareholder came in and quired ABC. So our partner became cap cities ABC during that time twenty percent of ESPN that was not owned by cap cities ABC came up.