The sale of Jamie Kellner's stake in The WB television network stands to prompt a big payday for the Turner Broadcasting System Inc. chairman and CEO, but Turner officials insist he won't walk away from the company.
Kellner and eight other former and current The WB executives will be paid handsomely for their 11 percent stake in the network — as much as $110 million, by some accounts. That stake is based on a $1 billion valuation for the network.
Kellner and the other executives are expected to receive the proceeds in January.
Turner parent AOL Time Warner Inc. first revealed that it would have to purchase the stake in its 2001 annual report. In that document, AOL said that ownership of The WB was split between Tribune Broadcasting (22.5 percent), with the balance owned by its Time Warner Entertainment L.P. partnership, "except for an 11 percent interest that TWE is in contract to acquire in January 2003." (TWE, a partnership between AOL Time Warner and AT&T Broadband that includes entertainment assets and cable systems, is being unwound as part of the latter's merger with Comcast Corp.)
Sources familiar with the matter said that Kellner, Turner executive vice president of programming Garth Ancier and seven other The WB executives will receive money in the deal, with Kellner — the founder of the broadcast network — getting the bulk of the proceeds.
The agreement was negotiated in 2001, in conjunction with Kellner's promotion to his current position as chairman and CEO of Turner, which includes The WB, as well as Cable News Network, TBS Superstation, Turner Network Television and Cartoon Network. According to sources, the deal was struck to prevent any possibility that Kellner would favor The WB over Turner's other networks in his expanded role.
"This was done to ward off any possibility of a conflict of interest," said one source familiar with the deal. "This took that away."
Since former AOL chief opertation officer Robert Pittman resigned in July, speculation has been rampant that Kellner was contemplating leaving the company. But Kellner was at predecessor company Time Warner Inc. long before Pittman came aboard — following Time Warner's 2000 merger with America Online Inc. — and was not considered to be a close ally of the former COO.
Several published reports also had Kellner wanting to return to California from Atlanta, Turner's headquarters. Kellner has denied those reports.
Turner spokesman Brad Turrell reiterated Kellner's desire to stay at the company.
"Jamie is committed to this company through the end of his contract, which runs through 2004, and he has left the possibility very much open that he would stay longer," Turrell said.
But while Kellner apparently has no desire to leave, other AOL Time Warner executives have been heading for the exits. Most of those have been past allies of Pittman.
Shortly after Pittman resigned, Michelle James, chief talent scout for AOL Time Warner, resigned to start her own executive search firm. More recently, executive vice president Mayo Stuntz resigned last month, and last week, senior vice president Marshall Cohen and AOL Interactive Services president James DeCastro submitted their resignations.
Cohen's resignation, according to an AOL spokeswoman, was effective immediately. DeCastro will leave at the end of November.
Cohen was in charge of consumer and media research, and had a long history with Pittman starting in the early 1980s at MTV: Music Television. Cohen was part of the team responsible for the network's successful "I Want My MTV" marketing campaign.
Stunz, another MTV alumnus, was responsible for cross-divisional initiatives, including AOL Time Warner's efforts to sell advertising across its different units.