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MTVN’s World Shrinks

2/16/2007 7:07 PM Eastern

MTV Networks’ week of job cuts claimed some big names and some small channels, but failed to impress Wall Street.

Phase two is expected to export layoffs to other countries.

Last Monday, MTVN CEO Judy McGrath broke the bad news companywide in an e-mail that said, in part: “We’ve carefully reviewed all aspects of our business, and these moves are necessary to best align us for the future. Unfortunately, this means that approximately 250 U.S.-based staff employees will be leaving the company.” That’s about 5.5% of the prior workforce of about 4,500.

WHERE CUTS HIT

Over the course of the week, it came out that relatively deep staff cuts had come from affiliate sales and marketing (which, since mid-January, lost a president and several executive vice presidents and senior VPs, plus most of the Los Angeles and Chicago offices) and from 65 million-subscriber MTV2 and 45 million-subscriber VH1 Classic.

MTV2, operationally consolidated with MTV, and VH1 Classic will go on as channels, with much smaller staffs and, at least for now, no general managers.

Eric Sherman, the GM at VH1 Classic, VH1 Soul and the high-definition music channel MHD, was an early cut last week. (“Our deepest appreciation goes to Eric Sherman and his team who worked so passionately to set it on its path of success,” VH1 general manager Tom Calderone said in an internal e-mail last week. “We are in awe, and we can only hope to match your enthusiasm and commitment.”)

MTV2 general manager David Cohn was said to be considering another job at MTVN.

It’s a different story for MTV World: The three-channel digital suite, offering programming aimed at U.S. young people of Asian descent, is going off the air, MTVN said. The MTV World channels are carried on DirecTV and Verizon Communications’ FiOS TV systems. The first one, MTV Desi, aimed at young consumers with Indian subcontinent heritage, launched in 2005.

MTVN said “the premium distribution model for MTV World proved more challenging than we anticipated in this competitive environment” but “we are continuing to investigate ways to integrate the MTV Desi, Chi and K brands online and on our other screens.”

Nusrat Durrani, the MTV World general manager, also was said to be considering another job within the company.

In a midweek internal e-mail from MTV Network president Christina Norman — released in part to try to scuttle rumors that the in-studio live show TRL was being canceled (MTV said it isn’t) — support also was expressed for some emerging businesses, including the college-campus focused mtvU and Latino-youth-targeted MTV Tr3s.

Other departments hit include MTV News, MTV Docs and Production Events, whose chief, senior VP Kathy Flynn, was a notable name picked up by blogs cataloguing the layoffs on a day-by-day basis.

Other cuts included MTVN general counsel David Sussman, whose job will be shared by two current executives: Andra Shapiro and George Cheeks; executive VP of programming Paul DeBenedittis and senior VP of production Salli Frattini; and, from the communications team, senior VP Laura Nelson (of VH1).

From affiliate sales — which lost president Nicole Browning and executive VP Peter Low in an early cut in January — executive VPs Jessica Heacock and Sandy Ashendorf and senior VP Susan Keith are leaving. Heacock, who’s also chairman of Women in Cable Telecommunications, had been a candidate to succeed Browning and apparently resigned after not getting the job, people close to the company said. Browning’s successor is executive VP Denise Dahlberg (“At Deadline,” Feb. 12, 2007, page 40).

VIACOM HIRING

By Friday, the domestic cuts were said to be over, and people at the company said the layoffs would be followed by promotions and hiring. The Wall Street Journal reported last Monday that Viacom might end up hiring 500 people to staff acquired and developed digital-media businesses.

In her Feb. 12 e-mail to staffers, McGrath said, “[MTVN] International is also looking at new ways of working, and exploring new business models for television and online, which will be evaluated over the near-term.” That’s being translated to mean staff cuts there, as well, but no time frame has been cited.

Viacom's share price closed at $40.53 on Feb. 16, up 15 cents on the week.

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