The Hearst Corp. announced Wednesday the unexpected resignation of its president and chief executive, Victor Ganzi, citing unspecified "irreconcilable...
The Hearst Corp. announced Wednesday the unexpected resignation of its president and chief executive, Victor Ganzi, citing unspecified “irreconcilable policy differences” with the Hearst family trust that owns the company.
Frank Bennack Jr., who headed the company for more than two decades before handing it off to Ganzi, the successor he had groomed, will return as president and chief executive while the company searches for a long-term replacement.
Hearst owns 26 TV stations and publishes 15 daily newspapers, including the Seattle Post-Intelligencer; 31 weekly papers; and 19 magazines in the United States, including Cosmopolitan, Redbook, O The Oprah Magazine, Esquire and Good Housekeeping.
Hearst has a growing business overseas in versions of its magazines produced in partnership with local publishers.
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The ouster of a media chieftain is usually preceded by public signs of trouble, but Ganzi’s fall after six years came as a surprise to executives at Hearst and some of its major joint venture partners, and to investment bankers who track the company closely.
They said there had been disagreement in the company over recent moves to deepen its investment in newspapers, contrary to the conventional wisdom among analysts and investors, but they could not say whether that was the reason for the shake-up.
One person briefed on the company’s strategies said: “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.”
Under Ganzi, Hearst has diversified extensively into new businesses, including online ventures, though it remains primarily a magazine, television and newspaper company.
The company has recently acquired or bought large stakes in Fitch Ratings and a long list of video-game, dating, shopping and advertising Web sites, and it entered into advertising and technology partnerships with other companies to enhance newspapers’ performance online.
The company’s statement announcing Ganzi’s departure said his disagreement “about the future direction of the company” was with the board of trustees of the Hearst family trust; it did not say he had clashed with the company’s board of directors.
The trustees include five Hearst family members and eight others, most of them longtime former Hearst Corp. executives.
William Randolph Hearst, who died in 1951, created the trust to give his heirs ownership of the company but limit their say in its operation.
The New York company has reported publicly it had record cash flow in 15 of the last 16 years, though it’s not clear whether that’s partly due to expansion by acquisition. Hearst reported that last year, excluding its new acquisitions, newspaper revenue fell 6 percent and magazine revenue rose 6 percent — somewhat better than the industry as a whole.
Hearst’s broadcast unit recorded a 3 percent drop in revenue last year. Its entertainment and syndication unit, which includes large stakes in ESPN, A&E, Lifetime and the History Channel, reported a 10 percent revenue increase.