The Morning After: Hearst CEO Quits

Today's papers shed some, but not much, light on the abrupt ouster of Hearst CEO Victor Ganzi. The Wall Street Journal chalks it up mostly to corporate politics: A source "familiar with the situation" says the five members of the board of trustees, which represents the controlling Hearst family, "felt they weren't in the loop about what was going on," while Ganzi felt overshadowed by his predecessor (and interim successor), Frank A. Bennack Jr.

The New York Times, meanwhile, citing Hearst executives and investment bankers, says there was "disagreement in the company over recent moves to deepen its investment in newspapers, contrary to the conventional wisdom among analysts and investors." (Hearst acquired a 31 percent stake in struggling MediaNews Group last October.) A "person briefed on the company's strategies" says, "The word had come from on high that they weren't doing enough getting into digital, nothing big enough to fundamentally change the business model."

While Hearst has invested in a number of technology properties, those investments, notes BusinessWeek, "have been timid, often no more than 25 percent....[I]t may be the Hearst trustees feel as if too much money has been left on the table based on being too conservative -- and that it's time for a change."

Just about everyone considers Cathie Black, president of Hearst's magazine division, a likely candidate to replace Ganzi. While her record of start-ups has been mixed, it includes O, The Oprah Magazine, a hit big enough to make up for a few bad bets like Talk and Lifetime. WWD speculates that Black's No. 2, Michael Clinton, would replace her atop Hearst Magazines.

By the way: How much cash does Hearst generate? BusinessWeek puts annual revenues at north of $8 billion, but the New York Post says they're "around $4 billion." Notes the Times, "Hearst's inner working are opaque, even for a privately-held company."