Recently I had the opportunity to attend the Conference Board's Corporate Development Conference sponsored by Ernst & Young's Transaction Advisory group. The conference was attended by leading Corporate Development Officers from 3M, P&G, SAP, Microsoft, Colgate-Palmolive, Sun and others, covering such topics as Organizing Corporate Development, Repurposing Corporate Development for Challenging Times and Valuations of Multinational Acquisitions and Divestitures--my favorite panel of the day, which I stumped with my question regarding US vs ROW style M&A.
While there I had the chance to sit down and interview Lisa Gersh, President of NBC Universal's Strategic Initiatives Group and the Managing Director of The Weather Channel.
Gersh joined NBCU in November of 2007 after the company acquired Oxygen Media, which she co-founded and served as its President & COO. Upon joining NBCU she led the multi-billion dollar acquisition of The Weather Channel Companies and is currently the executive in charge of the investment, aka, the CEO. Thanks to Lisa for spending a few minutes with me there.
With advertising revenues getting hammered in this contracting economy, is NBC Uni's Corporate Development looking to expand aggressively into different modes of media, especially the mobile platform, for future growth?
"Our acquisition of the Weather Channel is a great example of our strategy--looking at how we can leverage content regardless of platform, then swiftly positioning it to take advantage of its benefits such as its power via mobile. Weather information and related imperative content effectively applies itself across all our platforms--mobile, internet and TV--which is why we have integrated the Weather Channel content from MSNBC to the Today Show to mobile applications. It is a great standard of defining a multiple platform strategy for NBC Universal."
How has Corporate Development and the M&A environment changed as a result of the current period of contraction? From where you sit in the media conglomerate world, what do you see as tangible significant changes?
"One of the biggest changes is a broader consideration of what is going into the mix. While with Oxygen Media we had a strong sense of where a property might sit, what would be accomplished in its first year, all the metrics and projections worked out, very traditional financial analysis of the stakes involved. A year later with the Weather Channel, which occurred at the first stage of the economy's troubles, we and GE were quite concerned with the human impact of a change in control in a private company, with the reality of people loosing their livelihoods in a very difficult time. The conditions made us think very differently as a company and the HR impact of the deal and the impact of integrating the Weather Channel into the GE family of companies"
"As a result, the responsibilities of communicating the value of the deal have shifted. Communicating up and down the corporate ladder has a higher scrutiny now, especially for the CDO. Essentially the more things have changed the more they have stayed the same. It comes down to the foundation, the management expectations, the synergies attained, and how effectlvely it is communicated."
On the topic of gaining synergies, do you think the weighing of deal prices and valuations, combined with the flat economy has escalated the importance of capturing deal synergies faster, slower or the same as in the past?
"I think timing is everything. Let's call this "pre-Lehman" and "post-Lehman" considerations. Post Lehman, capturing quick synergies are critical. We're looking to bring the value of an acquisition much closer. In the past, we might have targeted 18 months for identifiable returns, now those are moving to 9 months, with a greater focus on integration needs to gain control of the business operationally and financially. This is especially true in the media business where it is critical to move quickly, as we did with The Weather Channel acquistion. Also I think the understanding of the friction and obstacles are more candid now post-Lehman. People expect bad news and challenges in these times--no more glossy deals. In fact that makes it an improvement since now there's a more real sense of expectations and friction than pre-Lehman."
How are corporate development initiatives such as M&A opportunities managed within NBC Universal?
"Smaller, digital technologies such as mobile centric ones, or properties of that sort, are led and identified by a business unit's GM or leadership that might be utilizing it or are more closely aware of technical applications or the strategic advantages of content. If it is cross fucntional, impacting multiple aspects of NBC Universal, than it is up to my group to identify and source the advantages and challenges of the opportunity. Plus we have an on going process analyzing a number of potential deals regularly as part of our functional responsibilities."
This was a great conference--at roughly 100 elite participants, small enough to meet everyone, many of whom both served as great panelists who then stayed for the conference, like Lisa--a true measure of its value and importance if the panelists stay on to sit in the audience. Check it out for next year.