New Hearst CEO Was Groomed For Post

By: Greg Mitchell How do you succeed the man who brought William Randolph Hearst's empire into the multimedia age? Victor F. Ganzi will walk in huge footsteps when he takes over from Frank A. Bennack Jr. as Hearst Corp. CEO and president June 1. Bennack, 68, has helmed Hearst for 23 years, the longest run at the top since that of The Chief himself.

Newspaper analyst John Morton of Morton Research in Silver Spring, Md., expects few changes from Ganzi, now Hearst's chief operating officer, because Bennack established such a strong corporate culture and put Hearst "on a sound and profitable footing," with "no problem properties." The company faces a potential "deeper pit" at its San Francisco Chronicle, however, because of the plunging Bay Area economy, Morton warned.

Unlike Bennack, who had a seven-year tenure as editor and publisher of the now-defunct San Antonio Light, Ganzi has not worked in the newspaper industry. But Jack Sweeney, president and publisher of Hearst's largest newspaper, the Houston Chronicle, regards this as a plus in today's "multiplatform, content business." Sweeney, who has worked closely with Ganzi, calls him a real "idea guy" with a "high energy level" who not only knows the art of the deal but shows real savvy in the all-important area of "linking products."

Ganzi is hardly a newcomer to the company, and has been groomed for the succession for several years. He did company work as a lawyer starting in 1970, and since 1990 he has served successively as general counsel, chief financial and legal officer, and executive vice president and chief operating officer, as well as a director. Ganzi, 54, is a native New Yorker, and for 75 years his family has had 50% ownership in the company that owns Palm Restaurants throughout the United States. He also serves on the boards of ESPN and the PGA Tour.

"Everyone hates to see Frank leave," Sweeney said, "but the change in leadership will go smoothly because Vic has been in the middle of everything."

Ganzi has a tough act to follow, however. Under Bennack, the company grew earnings to 13 times what they had been, and increased revenue sevenfold, to $3.4 billion in sales in fiscal 2000, according to Hearst. He brought Hearst back to a strong position in newspaper publishing, closing or selling shaky properties and purchasing 10 of its 12 papers, including the San Francisco Chronicle (for $660 million last year) and the Houston Chronicle.

Hearst also bought book publishers, magazines, and TV stations. In addition, it launched the cable TV networks A&E, The History Channel, and Lifetime. Today the company has about 20,000 employees in more than 100 countries. It remains privately owned -- except for Hearst-Argyle Television Inc., one of Bennack's prime projects, which is publicly traded on the New York Stock Exchange.

Bennack is widely credited with forcing the Hearst family into business decisions that have made the company a true conglomerate with global reach -- no easy task for a nonfamily member.

If the current economic slump lasts beyond June, Ganzi (like most other CEOs) will face many challenges, analyst Morton said. Hearst is generally not known for cutting staff, which could make it "harder to deal with recession" than others, Morton added. (Of course, there have been cuts in staff recently at the company's San Francisco Chronicle, San Antonio Express-News, and Houston Chronicle.)

In a statement, George R. Hearst Jr., chairman of the Hearst board, said that Ganzi is "fully prepared for the role he will assume next June and will, I know, make all of us proud of the achievements of the company under his future management." Ganzi said he was "humbled and energized by the opportunity."