How change reverberates?

The media chatter on the streets of New York the last few days has all been about one of the media giants: Viacom and the departure of Mel Karmazin from it. If anyone works in news or media and doesn't know it, Mel Karmazin was the CEO and COO of the megamedia company, Viacom.

His decision to depart, which was apparently made over the Memorial Day weekend, was treated as breaking news on local stations in New York and on national news networks. As I sipped my morning coffee and watched NY1, the news anchor, Pat Keirnan, broke into his report with the news.

As late as Friday of the week before, Mel Karmazin's boss, Sumner Redstone, was saying that their famously volatile relationship was on track. But somewhere in the background, Karmazin found out that he was going to be sidestepped as a replacement for Redstone and so decided to leap before the push.

The departure of one executive, in so high a place, has caused an industry to stop, stare, shake their heads and to ponder what would come next for Viacom. I've been asked by a number of people about what I thought would happen to this or that person we knew in common at Viacom. Many of those people probably had never met Karmazin.

But his departure is a turning point for the media giant, just as it will be for Disney when the inevitable moment comes when Michael Eisner leaves that company.

Already Redstone is talking about selling radio stations that are weak. And radio was Mel's ticket into the Viacom game. He sold Infinity Radio to CBS, which was bought by Viacom.

Howard Stern has apparently said: I'm finished now. Because Mel Karmazin was a great supporter of free speech and with him gone, Howard is feeling more vulnerable than ever.

The radio folks were probably the most vulnerable and now the "weak" stations are going to the block.

Jonathon Dolgen, one of the co-heads of Paramount, a Viacom company, has resigned in short order, ending a stable period at that studio.

Others will probably follow. According to one industry expert, Karmazin protected some of the businesses within Viacom that he felt strongly about but might have been struggling. And now their white knight has folded his petard and left the field of battle. There probably isn't any Viacom executive that will pick up his causes.

One major executive's departure has had many major ramifications. It is a bit like watching a change in government in a small country. [After all, Viacom has annual revenues that exceed many countries in the world.]

We have become painfully aware of the power of senior executives. We have only to look at the corporate scandals that have rocked our markets over the last few years to know how men in power can use the system for personal or corporate gains in ways that don't necessarily follow either the letter or the spirit of the law.

Mel Karmazin was an executive of such power though he didn't use his power to siphon money from his company or to twist laws to enrich it. He made his mark by pushing his company one way or another, sheltering what he felt needed sheltering.

He was also, according to many reports, a bully, albeit a successful bully, brash, abrupt, and usually unpleasant. He was also, according to some reports, charismatic, astute and given to some great generosities.

In other words, he is a very complex man.

Whether liked or disliked, he was a powerful presence in an industry. And now he is gone from the media giant he helped build.

It is doubtful this is the last act of Mr. Karmazin. The winds of change are blowing over at Disney and Mel's name has already been floated as the replacement for Michael Eisner.
But whatever happens in the next chapter of this executive's life, it will undoubtedly affect a relatively huge number of people.

That is the power of positions such as his. Changes at his level, change the course of companies.