In a move that surprised the industry, longtime The Weather
Channel CEO Michael Eckert is leaving the network effective March 31.
No permanent replacement has been named yet for Eckert, who
tendered his resignation to John Wynne, president and CEO of TWC's parent, Norfolk,
Va.-based media company Landmark Communications Inc.
Eckert announced his departure to his shocked staff at
TWC's Atlanta headquarters last Monday.
Wynne will assume Eckert's responsibilities on an
interim basis until a successor is named. Eckert, who oversaw TWC's ascent as one of
the strongest brands in cable, has suggested several network insiders to replace him.
Eckert, who has been with TWC for 17 years, plans to take
some time off, and he doesn't have a new job lined up at this point. He said last
week that his departure from TWC was the result of lifestyle issues, adding,
"It's time to do something different."
Eckert, who just turned 52, said his two children are now
in college, and he's financially independent, in part through his equity interest in
privately held Landmark. He added that he and his wife -- fans of snow skiing and mountain
hiking -- "thought that it might be time for a change."
At 72 million subscribers, TWC is one of cable's
largest networks in terms of distribution, growing into a valuable asset under
Eckert's tenure. Last year, Paul Kagan Associates Inc. estimated that TWC earned
$164.5 million in revenue, and it projected that the network would hit $183 million this
Derek Baine, a senior analyst at Kagan, put TWC's
profit margin at 39 percent, and he expects it to generate $71 million in cash flow this
year. Because of its penetration, Baine valued the network at up to 15 times cash flow, or
roughly $1.065 billion.
"They've got some of the heftiest analog carriage
in the country," Baine said. "That analog carriage is really valuable now.
They've got to have [potential buyers] knocking at their door all the time."
Eckert cited as his accomplishments the successful brand
extensions that TWC has undertaken. Last year, it launched a digital weather service,
WeatherScan by TWC, which is being carried by Headend in the Sky.
TWC is also in the process of creating five other
local-weather services, which are likely to get digital carriage, as it rolls out its next
generation of "WeatherStar" technology.
While TWC is in expansion mode, hiring at least 400 people
during the past two years, some MSO officials have complained that the network was too
slow as far as getting its local-weather offerings out in the market, leaving an opening
for a number of upstart rivals.
In terms of brand extensions, TWC's Web site is No. 21
on the list of most-used Web sites in the world, with 150 million monthly page views,
Eckert said. And TWC also has a radio network that serves 250 radio stations.
Young & Rubicam Inc. ranked TWC as the third most
widely known media brand in the country, according to Eckert, and in a 1998 Beta Research
Corp. survey of cable subscribers, TWC ranked No. 1 in terms of "importance to the
enjoyment of cable."
Eckert has several skiing and fishing trips planned,
including a jaunt to Nepal. He said he may wind up staying in cable, but he added that he
has broad experience with start-ups, digital and even World Wide Web opportunities. He
said he'd also consider working with a venture-capital firm.
Eckert's departure comes shortly after TWC was the
subject of two flattering newspaper profiles -- in The New York Times and The
Boston Globe --that offered no hint of his coming resignation.