Gerald M. Levin, 84, Time Warner chief
Media executive linked to merger fiasco with AOL
Gerald M. Levin, a media executive once hailed as a new technology guru by leading HBO into the satellite TV age, but whose later gambit as Time Warner chief to merge with early internet giant AOL ended in disaster and left his visionary reputation in tatters, died March 13 at a hospital in Long Beach, Calif. He was 84.
His grandchild, Jake Maia Arlow, said Levin had Parkinson’s disease.
Levin rose through the corporate ranks with a professorial image that seemed to set him apart from many other media bosses who cut their teeth in the industry writing copy or working in broadcast pressure cookers. Levin studied biblical literature and Christian philosophy — and once considered becoming a rabbi — and could quote Thomas Aquinas as easily as he cited the latest Nielsen figures.
Levin also cultivated an oracle-like mystique on where the media industry was heading and when to strike. In 1975, as head of a regional pay-television outlet called Home Box Office, he persuaded parent company Time Inc. to take a chance with satellite broadcasts available across the country. The move brought dishes popping up on roofs of bars and homes, and showed the entertainment industry the potential of nationwide cable and satellite networks.
Later, as a senior executive at Time Inc., Levin played a central role in the 1990 merger with Warner Communications to create a powerhouse with film, television and cable operations as well as flagship publications including Time, People and Sports Illustrated.
After Levin was named executive of Time Warner in 1992, he spearheaded the acquisition of Turner Broadcasting System. The deal added prized cable assets including CNN and the Cartoon Network. Levin was also on a collision course with his eventual arch-nemesis, mogul Ted Turner, as the 2000 merger with AOL became one of the most ill- fated unions in U. S. corporate history.
The idea didn’t start out with dark clouds. Levin, who agreed to AOL’s takeover in an all-stock transaction worth about $184 billion, was seen as pulling off another masterstroke of timing and foresight. The deal — a record- setter in size at the time — fused an old- media empire with the new media promise of America Online, then the largest internet company and, for many Americans, their first taste of email and surfing the web.
Shattered dreams
Both sides celebrated the prospects for the new AOL Time Warner. Levin called the merger, announced Jan. 10, 2000, a symbol of the new millennium. “The opportunities are limitless,” he said. AOL’s chief Steve Case draped one arm around Levin’s shoulder and raised his other arm in a victory fist.
“But no one had bothered to really kick the tires before making the deal,” Nell Minow, a longtime researcher and consultant on corporate governance, said in an interview.
At Time Warner, negotiations had been carried along by the momentum of Levin’s past glories, Minow said. On the AOL side, there were unwelcome surprises. Before the deal closed in December 2000, AOL coughed up a $ 3.5 million fine after the Securities and Exchange Commission accused the company of improperly inflating profits by hundreds of millions of dollars.
“The biggest problem, in the end, was that [Levin] misread the landscape,” said Minow. “The new media did not want to merge with the old media. It wanted to kill it.”
The new venture, headed by Levin, lost its luster at an astonishing pace. Even before the final approval by the Federal Trade Commission,AOL’s stock had plunged by about 30 percent. The dot-com bubble — and its frenzy of investment — had imploded as capital dried up. There were signs, too, that culture clashes were brewing in the media colossus: the upstart swagger of AOL versus the old-guard values of Time Warner.
“There was panic on both sides,” said Ken Auletta, a journalist for the New Yorker magazine who has long covered media affairs. “Levin thought he would get the AOL digital know- how; Case thought he would get the Time Warner distribution know-how … None of that was happening. It was all too siloed.”
Big egos
Levin was nominally at the helm, but other big egos were in play. AOL’s Case pressed for the digital side to get priority. Turner, the largest shareholder, was furious over the slumping shares (and his own shrinking fortune) and called for Levin’s ouster.
In response, Levin had little ammo. He had few powerful allies in his corner. His management style — described as aloof and insular — left him relatively isolated, Auletta said in an interview.
“He was a maneuverer. He was a chess player” he said. “He was also reclusive. He was not a people person.”
Levin announced in December 2001 his plans to step down.He described his decision as “an intensely personal thing,” partly related to the 1997 slaying of his son Jonathan and the Sept. 11, 2001, terrorist attacks. Jonathan Levin, an English teacher at William Howard Taft High School in the Bronx, was killed by a former student in a robbery, a jury found.
About a year after Levin left, AOL Time Warner posted a net loss of $98.7 billion for 2002, a record for a U. S. company. ( AOL was dropped from the corporate name in 2003; after gradually shedding holdings such as AOL, what remained of Time Warner was acquired by AT&T for $ 85.4 billion in 2018.)
“I want my identity back. I don’t just want to be known as the CEO of AOL Time Warner. … I’m my own person,” Levin told the Wall Street Journal after he stepped down. “I have strong moral convictions. I’m not just a suit. I want the poetry back in my life.”
Gerald Manuel Levin was born on May 6, 1939, in Philadelphia. His father ran a family-owned business selling butter, eggs and other staples; his mother was a homemaker.
He received a bachelor’s degree at Pennsylvania’s Haverford College in 1960 with concentrations on biblical literature and Christian philosophy. He went onto law school, graduating from the University of Pennsylvania in 1963, and taking a job at the New Yorkbased international law firm Simpson, Thacher & Bartlett (now Simpson Thacher).
He worked in the late 1960s at a nongovernmental organization, Development and Resources Corp., which included a stint in Iran on the site of a dam project. His first media position was in 1972 with Sterling Communications, a New York-based cable company developing a pay-for-programming concept for movies and sports pitched as the “Macy’s of television.” It was code-named Green TV and then took the name Home Box Office, or HBO.
Life before HBO
“I had a life before HBO,” Levin was quoted as saying in the book “Tinderbox: HBO’s Ruthless Pursuit of New Frontiers” ( 2021) by journalist James Andrew Miller. “It was fascinating, but my real life began with HBO. It was my first kiss. It was my first and greatest love.”
In a C-SPAN interview, Levin recalled seeing a protest sign in a movie theater: “Stop pay television.” Levin said he knew that HBO was about to shake up the industry.
A key moment came when HBO carried by satellite the 1975 fight dubbed the “Thrilla in Manila” between Muhammad Ali and Joe Frazier. HBO sold about 500,000 subscriptions to the bout, won by Ali in the 14th round.
Levin’s three marriages — to Carol Needleman, Barbara Riley and Laurie Perlman — ended in divorce. Survivors include four children and seven grandchildren.
For years, Levin dispensed apologies for the AOL-Time Warner merger, which he described as the wrong deal at the wrong time.
“I have been obviously reflecting on it,” said on CNBC’s “Squawk Box” in 2010, the 10th anniversary of the merger. “I was the CEO. I was in charge. I’m really very sorry about the pain and suffering and loss that was caused.”
“I presided over the worst deal of the century, apparently,” he added.