New York —In the September 2008 issue of Condé Nast Portfolio, NBC Universal C.E.O. Jeff Zucker sits down exclusively with contributing editor Karl Taro Greenfeld and addresses how he intends to put his network back on top during a time of industry crisis (“Zuckervision,” p. 84). Greenfeld reports that Zucker’s vision is both “revolutionary and Six Sigma simple (he does work for G.E., after all): slash costs where NBC Universal is underperforming, invest in growing cable systems and digital-distribution mediums, and fight like hell to keep his numbers up so that G.E. doesn’t think of spinning off NBC Universal in this troubled economy.” Zucker assumed control of the vast media conglomerate that is NBC Universal in 2007, when the network was dead last, and a year and a half into his tenure, it’s still dead last in the key 18-to-49-year-old demographic. “Look, we don’t know what’s gonna work,” Zucker acknowledges. “Predicting what the media world is gonna look like in eight years is incredibly daunting. I defy anyone to do that.” Zucker’s plan for solving the prime-time problem was on full display during this year’s upfront presentations, where he met with advertisers in small groups as well as at a staged megaevent at Rockefeller Center showcasing numerous NBC celebrities. He drove home the point that NBC is a multiplatform behemoth that reaches viewers from morning to late at night through mobile content, video on demand, digital downloads, and streaming video, as well as cable, Greenfeld reports. Having had much success at a very young age (he was the executive producer of the Today show at just 26), Zucker has since had widely publicized flops (like the Friends-spinoff Joey), and he became the poster child for failing upward, Greenfeld writes. “I was very young. I had a lot of success, I had a lot of coverage,” Zucker says. “There was a tremendous amount of, you know—a lot of jealousy.” Harvard classmate Conan O’Brien says of his now boss, “The interesting thing to me is that there has been no change. I think he’s the same guy he was then. He could probably have taken the reins of NBC Universal then. He’s probably pissed that it didn’t happen then.” When asked if the stories of his screwups and shortcomings still hurt, Zucker, a cancer survivor, responds, “I’ve gone through chemo for nine months, vomiting my guts out afterward, then gone back into the hospital. If people want to take shots, hey, I’ve had more pain than anyone can give me.”

In a sidebar, “Saving TV,” Mark Harris argues that whether the big three networks get it or not, their medium as we know it is finished. Harris offers eight steps they need to take in order to avoid extinction:

    1. Accept the fact that niche is the new normal.
    2. Know your brand.
    3. Don’t count on “flow” unless all your programming is aimed at the same audience.
    4. Content counts.
    5. When you say the TV season is 52 weeks, you have to mean it.
    6. Don’t break faith with your audience.
    7. If you cant beat ’em, eat ’em.
    8. Lowered expectations can be your best friend.

Also in the September issue:

 
"Citi Under Siege” (p. 58). In an exclusive interview, Gary Weiss sits down with Citigroup C.E.O. Vikram Pandit and delves into how the Indian-born leader of the largest company in the U.S. was plucked from obscurity to fix the biggest mess in finance. Weiss questions whether Citigroup has grown too big to make any sense and suggests that the most defining quality of the firm once known for its innovation is now its stagnation. “If dealmaker Sandy Weill was the C.E.O. for Citi’s era of empire building, and lawyer Chuck Prince helped dig the company out of a legal and regulatory mess, is Pandit, a shy academic who built a reputation on managing risk, the right person to reimagine the nation’s biggest financial services company?” Weiss asks. After an impressive career at Morgan Stanley, where he rose to the co-president position, Pandit was forced to leave when an attempted coup against then-C.E.O. Philip Purcell was unsuccessful. Pandit then started the $4.5 billion hedge fund Old Lane Partners with supporters John Havens, Brian Leach, Joseph Perella, and Terry Meguid. “Old Lane was a comfy perch for the corporate exiles—and the 20 percent share of profits and 2 percent management fee the fund charged investors certainly helped—but it was not a successful fund,” Weiss writes. “In 2007, it returned just 2.8 percent after fees, half of what Standard & Poor’s 500-stock index returned with dividends reinvested.” Despite the fund’s unimpressive returns, Citigroup bought Old Lane for a privately confirmed figure of $800 million as a way of bringing Pandit and company onboard, Weiss reports. Old Lane “was appealing to us because of Vikram’s reputation and experience and because it would bring in half a dozen founding partners,” Lewis Kaden, Citi’s vice chairman, says. Pandit tells Weiss that the current mortgage crisis is a result of big banks hedging the risk of their subprime loans by securitizing and selling mortgage-backed securities, thereby turning a risk-reduction strategy into a problem. Though Pandit was brought into Citi for his risk-management skills, Weiss reports that since Pandit has come onboard, Citi has been hit by staggering losses, amassing $7.6 billion in red ink. “Pandit’s current course doesn’t seem bold enough, nor does his vision seem clear enough, to put the lumbering colossus back on track,” Weiss concludes.
 
“Axis of Commerce” (p. 112). Sanctions on Iran? What sanctions? Contributing editor Christopher Stewart investigates how U.S. companies are using Dubai as an illegal conduit to get American goods, from laptops to toothpaste, into Iran. “Although American companies aren’t allowed to send goods directly to Iran, the U.A.E. does not impose the same limitations on its local distributors,” Stewart writes. “Over time, that loophole has spawned what many agree is a decidedly murky trade, operating mainly under the public’s radar. The business is estimated to be worth billions of dollars annually, much of which goes directly to the bottom line of American companies.” Stewart discovers that underlying the entire operation is an informal don’t ask, don’t tell philosophy, which focuses on maximizing profits no matter what. Some exports are innocuous, like refrigerators and stoves; others, such as high-speed computer chips, military hardware, and nuclear components, are more ominous. In Tehran, Stewart finds products from Apple, Black & Decker, Hewlett-Packard, Procter & Gamble, and Xerox, among others. “I think a majority of these companies are well plugged-in in Washington,” Rochdi Younsi, the Middle Eastern analyst for the Eurasia Group in Washington says. “In D.C., they are given mixed signals, but they have more reason to believe that the U.S. is not going to take any action against them. So they go ahead and do it.”

“Haim Saban, Power Ranger” (p. 102). Senior writer Amy Wallace profiles Haim Saban, the Hollywood billionaire who brought the ’90s hit children’s show Mighty Morphin’ Power Rangers to the U.S. and who is currently the country’s top political donor.  Saban currently runs Saban Capital Group, the firm he founded to manage his $3.4 billion fortune. An enthusiastic Hillary Clinton supporter from the beginning, Saban was a relentless fundraiser, personally raising more than $1 million for the woman he believed “could be the greatest president ever.” Wallace reports that when Clinton lost the bid, Saban was left so bereft, he even contemplated voting for John McCain. That idea was quickly struck down, though, when his family staunchly opposed it. Saban was faced with the decision to either quickly turn his efforts toward Obama and support him with the same zeal with which he supported Hillary or instead casually support Obama out of default. “Option No. 1 is to vote for Obama, send him a $2,300 check, and sayonara—hope he wins,” Saban tells Wallace. “Option No. 2 is, Go big. If I’m going to go big, I have to go biggest. I have zero interest in being big. Biggest, I have an interest.”

“Speed Kills” (p. 96). When Carlos Ghosn took the wheel at Renault in 2005, he promised a hard and fast recovery for the ailing automaker, but as Jeffrey Rothfeder’s investigation reveals, the automaker has been mired in controversy stemming from multiple employee suicides. Rothfeder reports that since Ghosn took over as C.E.O., seven workers have attempted suicide and five have succeeded—one leaving a note that mentioned Ghosn by name. “I am trying to motivate people to want to do more than they thought they could do,” Ghosn says. “That’s the most important role of a manager and that’s what I appealed to when I began the transformation at Renault…. But if you say people’s motivation is the greatest wealth and asset of the company, scenes like these cannot be ignored.”

 “The Harvard Economy” (p. 56). Nathaniel Popper does a back-of-the-diploma analysis to calculate how much Harvard University takes in each year. Looking at donations, investments, student tuition, and school merchandise, Popper comes up with an estimated total annual income of $9.33 billion, a sum that exceeds the G.D.P. of many small countries.

 “London Banks, Falling Down” (p. 52). Senior writer Jesse Eisinger argues that Britain’s financial sector is in as much danger as that of the U.S., but he suggests that we can learn from London’s remedies and failures. Eisinger writes that while the respective problems of both countries are related to financial excess, “Britain seems further down the path of examining the faults and weaknesses in its financial regulatory structure. We need to do the same.”

This month on Portfolio.com
The September issue of the magazine as well as fashion week coverage from the front row; five ways the world will really never be the same again; and business travel tips and strategies.

PRESS CONTACTS:

Perri Dorset
perri_dorset@condenast.com
212-286-5898
 
Sarina Sassoon Sanandaji
sarina_sanandaji@condenast.com
212-286-6898
 
Emily Weber
emily_weber@condenast.com
212-286-6373

 

---