Gerald M. Levin described his shake-up of Time Warner yesterday as the creation of a "strategically elegant structure." But to executives in and outside the company, Mr. Levin's action seemed just another nasty public ouster -- this time of Warner Music's chairman, Michael J. Fuchs.
Mr. Levin, the chairman of Time Warner, said he was reorganizing the giant media company around three main businesses: entertainment, news and information, and telecommunications. The new structure, he said, had no place for Mr. Fuchs, who was also the chairman of Home Box Office.
Since Mr. Levin took the helm in 1993, Time Warner has witnessed a steady departure of senior executives. The company's music division has been especially hard hit. In the last two years, six of its top executives -- some of them among the most respected names in the recorded-music industry -- have resigned or been forced out.
Yesterday, as the news of Mr. Fuchs's departure ricocheted around Time Warner, some current and former executives said Mr. Levin had gone too far in his relentless housecleaning. "People are incredulous, even people who don't like Michael," an executive who recently left Time Warner said.
Coming on the same day as an executive shuffle at Time Inc., the dismissal of Mr. Fuchs added to the perception that five years after the merger that created it, Time Warner remained a company at sea.
Mr. Levin said the new structure -- together with its proposed acquisition of Turner Broadcasting System -- would refocus the company on entertainment programming. Until recently, the cornerstone of Mr. Levin's strategy had been to deliver interactive entertainment and communications services over the company's cable systems.
As the cost of delivering those services began to look too steep, though, Time Warner largely backed away from that strategy.
Mr. Levin insisted yesterday that his commitment to electronic distribution was undiminished. Although Time Inc.'s elaborate World Wide Web site, Pathfinder, has used up several million dollars in development funds, and some Time Warner executives fear that it will never make a profit, Mr. Levin said he was satisfied with its performance.
In personnel matters, Mr. Levin seems given to flip-flops, too. For almost two decades, he maintained a close if stormy relationship with Mr. Fuchs. With Mr. Levin's support, Mr. Fuchs rose to run HBO and developed a reputation as a driven and creative programming executive.
He was a critical ally of Mr. Levin early in 1992, when Mr. Levin helped engineer the dismissal of Nicholas J. Nicholas Jr. as president and co-chief executive of Time Warner. That move cleared the way for Mr. Levin's ascension to the C.E.O. job. With the death 10 months later of Time Warner's chairman, Steven J. Ross, Mr. Levin became Time Warner's helmsman.
Indeed, earlier this year, Mr. Fuchs looked like a potential heir to Mr. Levin. After dismissing Robert J. Morgado as chairman of strife-torn Warner Music, Mr. Levin turned the $5 billion division over to Mr. Fuchs and allowed him to keep HBO in his portfolio.
When Mr. Fuchs got off to a bumpy start by ousting several senior Warner executives, he enjoyed unstinting support from Mr. Levin. And after a recent presentation for Wall Street analysts, several said Mr. Fuchs appeared to be firmly in command of the division.
But Mr. Fuchs quickly lost Mr. Levin's support when he failed to champion Time Warner's proposed merger with Turner Broadcasting. Hearing that Mr. Levin might fold HBO into Turner, Mr. Fuchs made vociferous and not-so-private complaints about the idea.
Some analysts said that Mr. Levin had displayed admirable leadership by finally disciplining a rogue executive who had picked fights with colleagues like Robert A. Daly and Terry S. Semel, the co-chairmen of Warner Brothers. Mr. Daly and Mr. Semel are taking over Warner Music.
"Time Warner has never worked on a fundamental basis because of the clash of personalities between Time and Warner," said John Tinker of Furman Selz. "Getting rid of a Time Inc. guy, and backing two Warner guys, is a confident move for a C.E.O. from Time Inc."
In fact, with the departure of Mr. Fuchs, Mr. Levin is one of the last senior Time executives who remains at Time Warner.
Other analysts said the frequent ousters were depriving Time Warner of brain power it desperately needed. "It's bad because Michael is a very good executive, and they're losing one of their most valuable people," said David Londoner, a media analyst at Schroder Wertheim.
Several music-industry executives said yesterday that the Warner Music Group might thrive under Mr. Daly and Mr. Semel. Both have developed reputations at Warner Brothers for nurturing creative executives.
As competent and respected as Mr. Daly and Mr. Semel are, several people said that a company the size of Time Warner required several top-flight entertainment executives. With Mr. Fuchs's departure, Time Warner is down yet another one.
