USA Networks Inc. chairman Barry Diller is cracking openhis checkbook and pushing the sensitive issue of diversity in the telecommunicationsindustry to the forefront.
Diller will infuse the beleaguered Walter Kaitz Foundationwith a $6 million grant earmarked to place qualified minorities in traditional andnew-media jobs both in cable and broadcast, people familiar with the plan said last week.
The unprecedented individual contribution to Kaitz comes ata time when the organization is in the midst of a total re-evaluation of its diversityprogram amid criticisms that it hasn't done enough to increase the number of minorityemployees in cable.
It also comes ahead of what is expected to be a criticalindustry minority-hiring report from the National Association for the Advancement ofColored People.
The grant, which USA is expected to formally announce thisweek, will likely help Kaitz fund efforts to recruit minorities into both the cable andbroadcasting industries, with an emphasis on new-media jobs, sources close to thesituation said.
Sources said Diller has been a major supporter of the KaitzFoundation and its principals, but he wanted to see the organization become more powerfuland aggressive in placing minorities within the industry.
"USA Networks and Barry Diller are dramatizing howserious the industry has taken the issue of diversity," Kaitz board member SpencerKaitz said. "Barry is not only concerned about the traditional Kaitz fellow model --he is concerned about the number of minorities flowing out of the cable and broadcastingindustries."
According to a recent National Association of Minorities inCommunications report, minorities represent about 30 percent of the cable industry --equal to their representation in the general population and higher than theirrepresentation in the work force (26 percent).
But minority representation in upper-management positionsis extremely low. In general, at "non-ethnically identified" companies --eliminating companies that deliver ethnic-targeted services, such as some programmers --minorities only represent 5 percent of positions from senior vice president to CEO,according to the organization.
Only 12 minority representatives occupy such positions, andnine are men.
NAMIC president Joe Lawson said the grant is "greatnews for diversity in the industry. We congratulate USA and the Walter KaitzFoundation."
Former AT&T Broadband & Internet Services CEO LeoJ. Hindery Jr. called the grant "an enormous compliment to the foundation."
"But it's also a great compliment to Barry and toUSA Networks for their vision and passion," added Hindery, currently CEO of GlobalCrossing Ltd.'s GlobalCenter Inc. unit.
The grant comes at a time of transition for the 16-year-oldfoundation, which is committed to diversifying cable's work force by attractingminorities to jobs in the industry, mostly in middle management.
Critics of the foundation have said there are far too fewcandidates, and some of those who were placed at cable companies have not stuck it out.
Foundation supporters countered that communicationscompanies don't do enough to make the candidates want to stay. There are also thosewho believe the entire industry should do more to create specific programs to attract andpromote those other than white men.
Kaitz president Paula Winn resigned in September, and theorganization has yet to hire a replacement, although it has hired top executive-searchfirm Korn/Ferry International to seek candidates.
Recently, industry executives were surprised to hear thatonly one of the 27 candidates in this year's Kaitz class was recruited from outsideof the industry, even though the industry generates well over $1 million annually from itsSeptember benefit dinner specifically for that cause.
Kaitz said the foundation was only able to retain one ofthe 11 minorities recruited for this year's class.
"Those [who qualified for the program] left Kaitzeither because their exiting employer was able to provide a better package or they wereable to find another position," he said. "While that speaks volumes for theeconomy and the value of talented minorities within the marketplace, it doesn'tbenefit cable. We have to find a way to add more value to make cable more attractive forpotential employees."
He added that while the foundation's extensiverecruitment process played a useful role when it launched in the early 1980s, it may betime to restructure the way the organization attracts and retains qualified minorities.
"The foundation has recruited 450 people through thisvehicle, and about one-half still work in the industry," Kaitz said. "Butwe're finding that the job market is more competitive now, and the process may be toocumbersome to remain effective. The concerns about whether we're doing all that wecould are legitimate."
A strategic audit committee, made up of executives frommajor cable organizations, is currently looking at the Kaitz Foundation to determine whatchanges need to be implemented, Kaitz said.
Some of the changes the committee is looking at includeincorporating cable companies into the recruitment process.
The organization will work with the Cable andTelecommunications Human Resources Association to facilitate a more direct approach torecruiting qualified minorities.
Also, the organization wants to set up a program thatteaches industry executives and human-resources employees to be more culturally sensitive."Once we're recruited new employees, we have to make sure they feel the cultureis good for them," Kaitz said. "The environment has to be inclusive and based onvalues."
The foundation hopes to team up with Women in Cable &Telecommunications to help companies train and develop minorities and women forupper-management positions. Kaitz also said he wants to help the industry reach out tominority organizations to hear their concerns about diversity.
While the National Cable Television Association has begunthe process, Kaitz feels that the foundation can accomplish this without the air ofpolitics. "The industry should be bonding with everyone to see how its is perceived,and those meetings should not be politicized," he said. "They should occuroutside of the confrontational environment that often happens in the politicalarena."
The foundation is also exploring possible apprenticeshipsfor college students so they can get an early feel for the industry.
"I think the vision part we feel comfortableabout," Kaitz said. "Now it's a matter of execution."
Diller's grant could help a lot, industry executivessaid.
Industry observers also said the grant could temper what isexpected to be a critical report from the NAACP concerning the industry'sminority-hiring practices. Sources said the report is just about completed, and it couldbe released within weeks.
Representatives from the NAACP could not be reached forcomment at press time.
The NAACP released a scathing report on minorityrepresentation within the broadcasting industry last fall. The organization criticized thetelevision industry for not having any minorities in starring roles among the four majorbroadcast networks' 26 new shows slated for the 1999-2000 television season.
The report prompted the four major networks to reachagreements with the NAACP to increase diversity within their companies both on- andoff-screen.