After a nine-year stint that put the celebrity-oriented
network in the black, E! Entertainment Television president and CEO Lee Masters is moving
on at the end of the year, most likely to be part of an entrepreneurial new-media venture.
Masters was hoping to announce his new job this week, after
surprising some cable-industry veterans by tendering his resignation during so-called Hell
Week. Masters plans to leave E! when his contract expires at the end of the year.
Published reports said Masters will get $15 million to $20
million as a payout at the end of his contract, but he declined to comment on the matter.
Masters said he was in final negotiations for a post,
"very much in the industry," that will have the backing of major media players.
"I believe in the convergence of the TV set and the
Web," he said. "And I'm really bullish on the set-top boxes and developing
Since the beginning of the year, Masters has been
discussing with both Brian and Ralph Roberts -- Comcast Corp.'s president and
chairman, respectively -- whether or not he would renew his five-year deal. He said he
wanted to give them plenty of notice if he did plan to leave, so that they could begin the
hunt for a successor.
Masters' senior staff were aware of those discussions,
sop they weren't surprised by his resignation. This month, he said, he finally
decided to leave.
"I made the decision that I really want to do
something different," Masters said. "I need to have change to keep
Masters and Brian Roberts announced Masters' pending
departure at a meeting in Los Angeles last Monday evening with E!'s management, which
was also attended by Steve Burke, president of Comcast Cable Communications, and by
Comcast treasurer John Alchin.
In 1997, Comcast and The Walt Disney Co. formed a
partnership that paid $321 million to buy out Time Warner Inc.'s 58 percent stake in
E!. As a result, E! is now 79.2 percent-owned by a joint venture between Comcast and
Disney, with Comcast controlling 50.1 percent of that joint venture. MediaOne and
Tele-Communications Inc. each own 10.4 percent stakes in E!.
Masters, a veteran of MTV: Music Television, joined E!
right before its launch in June 1990. The network, which reaches 52 million homes, came to
profitability under his tenure, and it is launching a spinoff, Style, Oct. 1.
E! has increased its portion of original programming and
added edgy shows such as Talk Soup, The E! True Hollywood Story and Howard
Stern to its roster.
According to Paul Kagan Associates Inc., E! generated $114
million in revenue last year, and Kagan estimates that it will reach $124.4 million this
Several sources said Masters had been seeking more
expansive duties at Comcast.
He also had to endure a period from 1995 to late last year
when Comcast was an investor in C3, a programming company led by Rich Frank. C3 oversaw
Comcast's stake in E!, so Frank was essentially looking over Masters' shoulder.
Frank joined Cybermeals, an online meal-takeout service,
Masters will still be at E! to preside over the launch of
Style, a fashion and design network.
E! will pay reported launch fees of $5 to $7 per subscriber
to obtain analog carriage for Style -- a difficult task in the current channel-locked
environment. Because it only has one network, E! doesn't have the kind of leverage
and muscle that major programmers, such as Turner Broadcasting System Inc., have when they
want to launch a new service.
Style will be taking over Q2's transponder space,
immediately picking up more than 2 million Comcast subscribers.
Even with its original primetime programming, E!'s
ratings are up, but they haven't made the strides that networks such as VH1 and
Comedy Central have. In the second quarter, E! earned a 0.4 primetime rating, up 33
percent from 0.3 the prior year, according to Nielsen Media Research.
Some cable operators credited E! with being an inexpensive
network that has carved a real niche.
"E! is the type of product that has differentiated
itself from anything else," said Ron Martin, chief operating officer at Buford