Quietly and carefully, Parsons has emerged in a pivotal role as Time Warner’s senior financial engineer, in-house dealmaker and emissary to the outside world. How important is he? If the $7.5 billion purchase of Turner wins FTC approval this summer, Time Warner will displace the Walt Disney Co., which recently purchased ABC, as the world’s largest media company. And if Parsons has his way in the multibillion-dollar battle to restructure the partnership with U S West, Time Warner will regain full ownership of HBO and Warner Bros., its crown-jewel entertainment assets. Simultaneously, the media giant will gladly continue to share its sprawling, but debt-laden and cash-hungry, cable operations with the phone giant. The two sides are at war. Yet without Parsons, all agree, things would have collapsed much sooner. His reward: almost $3 million in salary and bonus, plus stock options “It’s very important to have someone of that caliber in the upper echelon of the company,” explains Raymond S. Troubh, a financial consultant and Time Warner board member. Adds Levin: “He has really taken to this.”
But the Richard Parsons story isn’t without intrigue. His future role is one of the many subplots in Time Warner’s juicy and never-ending corporate saga. Although he’s president, the powerful and fiercely autonomous executives who run the company’s operating divisions-like the Warner Bros. movie studio-report directly to Levin. In an effort to expand his influence, Parsons is now setting out to learn the detailed workings of those businesses, especially in entertainment. “I want to learn more about it,” he says, “to be more valuable to Jerry, the board and, quite frankly, to help manage the portfolio of assets and allocate the resources.” inevitably, speculation has begun that the 48-year-old executive could pull off his biggest surprise yet: eventually becoming a candidate for the top spot. Parsons and his boss bristle at the suggestion. Says Levin: “That’s not a premise here. It wasn’t part of any discussion. That is his understanding, mine and the board’s.” Parsons-by numerous accounts Levin’s utmost loyalist at the company-agrees. If Levin were to suddenly go now, “there are far better qualified people at this point in time.”
For now, Parsons already has become arguably America’s most influential black executive. It’s still rare for an African-American to rise so high on the corporate ladder-especially in the visible and clubby world of entertainment. (Dennis Hightower, the industry’s second highest-ranking black, retired this month after less than a year as chief of Walt Disney Co.’s TV operations.) But Parsons’s fans say race has never been a handicap or advantage for him. “The special story of Dick Parsons is that he’s succeeding in terms that have nothing to do with the fact that he’s an African-American,” says Lawrence Buttenwieser, a New York attorney and Time Warner director.
Who is Dick Parsons? And how did he make it onto the boards of institutions ranging from Citicorp to Lincoln Center? Apart from being a “natural-born leader,” as his former law partner Ira Wender says, the Rockefeller connection was crucial. In 1971-after finishing at the top of his class at Albany Law School and earning the top score on the New York Bar exam-the Brooklyn-born Parsons was an aide in the New York State Legislature. There, he caught the eye of the then Gov. Nelson Rockefeller. Welcomed into his inner circle as a counsel to the governor, Parsons followed his mentor to Washington in 1974, when Rockefeller became Gerald Ford’s vice president. At the White House, Parsons helped run the domestic-policy council. “Nelson put a lot of confidence in that man,” recalls Rep. Charles Rangel of New York. And Nelson had bigger plans for him. “What he used to talk to me about was the Supreme Court,” recalls Parsons.
But in 1977, Parsons returned to the business world. “What America is all about is the private sector,” he says today. Parsons joined the New York firm of Patterson, Belknap as a litigator. Then in 1988, Parsons abruptly changed course. He accepted the CEO post at Dime Savings Bank. He had no banking experience. Still, when the real-estate market crashed and bad loans piled up, Parsons staved off regulators, raised $300 million in new capital and merged the Dime with another thrift in 1994. What to do next?
Parsons didn’t know it, but Levin was about to call. At the time, Warner was under siege. There was civil war in its music group, public outcry over the gangsta-rap music it peddled and shareholder anxiety over its depressed stock. The company’s structure was a mess, too. Big chunks of its assets were in the partnership with U S West. Directors are too circumspect to say so, but they prodded Levin, a smart and introspective loner, to get help.
Why Parsons? Levin couldn’t turn to any of his talented but feuding executives like HBO’s Michael Fuchs, since fired, or Warner Bros. cochiefs Bob Daly and Terry Semel. One camp wouldn’t stay if the other were promoted. A heavyweight entertainment executive from outside Time Warner might become a rival for Levin’s job. So Parsons, a Time Warner director since 1991, was perfect. Smart, diplomatic and a good listener, he respected the creative process enormously. in deals, he knew how to make opponents feel as if they had won. More than anything, Parsons had the strong admiration of his fellow directors.
But the job seemed less than the title. Unlike other corporate presidents, Parsons’s turf was secondary functions like finance and legal affairs, not the core businesses. As it turned out, it was the right turf at the right time. Levin needed to raise cash to pay down debt; Parsons sold $3.2 billion worth of assets, including Six Flags and a stake in Black Entertainment Television. He also arranged to swap $4 billion of expensive debt for cheaper financing. Parsons had a gift for dealing with the rancor racking the company. “He’s been involved in trying to calm everybody down,” says Daly. “It’s better since he’s here.”
But Parsons’s biggest test is settling the dispute with U S West and helping push through the Turner deal. Neither has been easy. In exchange for giving up its stake in HBO and Warner Bros., U S West wanted complete control of the cable systems they share. No way, said Time Warner. Nor can the two sides agree on what the assets are worth. No matter what Parsons proposed, the impasse persisted.
Last fall, things got worse when Levin abruptly decided to acquire Turner. That left Parsons to lead Time Warner in negotiating a three-sided deal-himself, Turner’s people and the crew representing TCI’s John Malone. One of the corporate world’s toughest negotiators and Turner’s largest shareholder, Malone wanted the moon for his backing. “Parsons was the voice of calm,” recalls Randolph Booth, a Turner negotiator. “He understood everybody’s side of the transaction and found the middle.”
Then U S West sprang. As Time Warner’s biggest partner, it claimed a right to veto the Turner deal. Levin was livid. But Parsons, true to form, tried to keep the talks going. Although a Levin loyalist, at one point in the intensifying battle he rejected Levin’s advice and responded to a U S West memo setting down its right to limit Time Warner’s dealmaking. “He thought it wasn’t a good idea " Parsons testified at a recent trial in the legal dispute.
What comes next for Parsons, no doubt, will hinge largely on the fate of Levin’s Turner deal. If it succeeds, Parsons’s diplomacy will be more in demand; a lot of big egos will need finessing. If it crashes? Regulators will get the blame. Whatever the outcome, Parsons has options. The Time Warner presidency has put him in the spotlight. And in the world of Richard Parsons, big jobs always seem to come calling.
