Google Wins, Legacy Media Loses

GoogleFor the second year in a row, Google is the best company to work for in America according to the 2013 FORTUNE list of the “100 Best Companies to Work For.”

Google also “earned higher marks from marketers and ad agencies than any other media company last year, according to the latest annual Advertiser Perceptions research, offering traditional media a discouraging note as they wade into 2013,” as reported in Ad Age.

Way to go, Google!

Leaving a Legacy

What legacy media companies are on the 2013 FORTUNE list of the “100 Best Companies to Work For?” None – and none in any of the previous five years. Disney, News Corp., Viacom, Time Warner, CBS, Comcast NBC Universal did not make the list, and, in fact, only one of these huge media conglomerates have ever made the FORTUNE list of the “100 Best Companies to Work For ” — Disney over ten years ago, as I remember.

The only media company to make the FORTUNE list in the last five years has been Dreamworks Animation, which is number 12 on the 2013 list and was number 14 on the 2012 list. Way to go Dreamworks and Jeffrey Katzenberg! (By the way, Katzenberg was not on the list of the 100 top-paid CEOs in the country.)

But media giant Comcast did distinguish itself in 2012 by winning the Consumerist Worst Company In America (“Golden Poo”) award. Way to go, Comcast!

Correlating Companies and CEOs

If you look at another list – the top paid CEOs in the United States – you’ll see that there are more top-paid CEOs who run legacy media companies than top-paid CEOs in any other industry, including banks and financial services companies.

So, what’s the logical conclusion? Is it that the higher the compensation of a media company CEO the worse the company is to work for? Is Les Moonves, the top paid media company CEO, worth $41.5 million? Is David Zaslav of Discovery Communications worth $40.7 million, Bob Iger $40 million, Philip Dauman $30 million (down from $43 million the year before and $84 million the year before that), Rupert Murdoch $25 million, Jeff Bewkes $20 million, Brian Roberts $19 million, or Glenn Britt (Time Warner Cable) $16.5 million?

Well, maybe the legacy media execs are worth it if the top earner on the Forbes list of top paid CEOs, John Hammergren of McKesson, is worth $131 million, or if number-two earner, Ralph Lauren, is worth $67 million (about half of Ralph’s income came from yours truly, or at least it seems that way to my wife).

And Bob Iger may come close to earning his compensation because ABC and ESPN are owned by Disney, and even though Disney isn’t on the list of the best companies to work for, ABC was the highest-rated overall media company in 2011, according to the Advertiser Perceptions study reported in Ad Age.

Ad Age reports:

Within cable, marketers and agencies chose ESPN for best brand strength, the NFL network for sales knowledge, The Weather Channel for customer service and AMC for advertiser satisfaction.

Among print brands, the best ranked were ESPN the Magazine for brand strength, Cooking Light for sales knowledge, Martha Stewart Living for customer service and Food Network Magazine for advertiser satisfaction.

Stockholders, Employees & Innovation

So Iger’s ABC and ESPN do better with advertisers than the higher paid Moonves’s CBS and Zaslav’s Discovery Communications. Thus, the conclusion has to be that Moonves is the most overpaid – the worst deal for stockholders – of any of the major legacy media companies.

And we also might well conclude that these overpaid media executives aren’t a good deal for employees, either, since none of these media companies are on the list of the best companies to work for.

Larry PageAnd what about innovation, the engine for growth and future success? Which companies are most innovative: Google or the legacy media companies? Obviously, Google. It seems as though the legacy media companies are wasting money on outrageously overblown compensation to CEOs instead of investing in innovation. Bad decision.

What kind of deal are the employees of Google getting? Google is the top-rated company to work for and the top rated company with advertisers, and its CEO Larry Page’s salary is a buck a year. That’s right, $1. Pretty good deal for stockholders and employees.

What do these compensation levels signal to employees and to the public about media executives? Doesn’t Larry Page come off as being a good deal for stockholders and employees and Les Moonves come off as being a terrible deal for stockholders and employees? What company would you rather work for: Google or CBS or another legacy media company?

Is it any wonder that Google is winning on all fronts – employee satisfaction, advertiser perception, revenue, innovation, and profits, and the legacy media are losing?

Author:

Charles Warner

Charles Warner teaches in the Media Management Program at The New School and NYU’s Stern School of Business, and is the Goldenson Chair Emeritus at the University of Missouri School of Journalism. Until he retired in 2002, he was Vice President of AOL’s Interactive Marketing division. Charlie’s book Media Selling, 4th Edition is an update of Broadcast and Cable Selling and is the most widely used sales textbook in the field. He has also written a companion book to Media Selling titled Media Sales Management that is available free on www.mediaselling.us.