CanWest Global Communications Corp. is betting the future of its media convergence strategy on an enigmatic former music executive with a controversial history.
In less than a year, Rick Camilleri, the former head of Sony Music Entertainment (Canada) Inc., has become one of Canada's most powerful media executives. He joined Winnipeg-based CanWest last summer and within seven months took direct control of Canadian operations, a group that includes 16 conventional TV stations, 11 big-city daily newspapers and seven specialty channels across the country.
Mr. Camilleri's rapid ascent to CanWest's executive offices on the 32nd floor has been greeted with some surprise in the media sector. He had no TV or newspaper experience and is virtually unknown in the tightly knit industry.
"I think in terms of what I bring to the table is an understanding of content creation, marketing, customer focus, technology and how you fuse those things together," the 43-year-old Mr. Camilleri said in his first interview since being appointed the company's chief operating officer.
He describes himself as a "change agent," overseeing the sweeping integration of CanWest's TV and media operations with the formidable goal of boosting profit margins across the notoriously lean company. But the changes under Mr. Camilleri's tenure so far, including the loss of two key executives, have sparked concern about the new COO's abilities.
Mr. Camilleri "better be the frigging Second Coming because there has been enough turbulence," a Toronto media analyst said. "CanWest can't afford a misstep. And they're betting on this guy and he better be the real deal."
Mr. Camilleri's career path suggests he is a driven individual who does not shy away from tough and controversial decisions. A Toronto native, he was a top student at the University of Toronto, making the dean's list in 1980-81. He distinguished himself at Osgoode Hall Law School too, winning a key position with renowned Toronto entertainment lawyer Peter Steinmetz in 1986.
"He was cut from a slightly different cloth" and showed a disposition for executive business affairs, said Mr. Steinmetz, partner at law firm Cassels Brock and Blackwell.
(Coincidentally, Leonard Asper, CanWest's president and chief executive officer, attended Osgoode Hall and articled at Cassels Brock. Mr. Asper is four years younger than Mr. Camilleri and the two men met for the first time last year.)
Mr. Camilleri was hired as general counsel to record label Thorne-EMI Canada Inc. in 1987 and, a year later, joined Sony Music's Canadian operations. His legal skills won him admirers in the New York head office and, in 1993 at the age of 32, he was appointed appointed president and chief executive officer.
His seven-year leadership of Sony was a period of rapid growth. He is characterized as a hard-working CEO, regularly arriving at the office before 7 a.m. A handful of Canadian artists became major stars under Mr. Camilleri, including Our Lady Peace, Amanda Marshall and Chantal Kreviazuk. The company's manufacturing and distribution operations were overhauled and CDs arrived in stores at a faster rate. Sony does not release Canadian sales figures, but sales reportedly doubled and profits soared 500 per cent under Mr. Camilleri's reign.
But industry sources also point to the arrival of a different individual -- Quebec chanteuse Celine Dion. The pop star, signed by Sony's CBS Records in 1986, released her first English-language album in 1990. To date, she has sold more than 140 million CDs and tapes, and it's estimated between 30 and 35 per cent of Ms. Dion's global sales have been funnelled back to Sony's Canadian coffers.
"Celine Dion obviously was an enormous success, one of the biggest artists in the world and something that we were all incredibly proud of," Mr. Camilleri said. "But I think the success of the organization wasn't just about any one individual or artist."
While Sony's earnings statement bloomed under Mr. Camilleri, industry sources and former employees say Mr. Camilleri led the company during tumultuous times. From the beginning, his term in the executive office was marked with a series of management dismissals and a restructuring that reportedly led to the 1993 resignation of Lisa Zbitnew, director of artist marketing. To the dismay of Sony brass she was named the country's top music industry executive at an industry conference a week later. (Ms. Zbitnew, now president of BMG Canada Inc., declined to comment.)
Larry Leblanc, Canadian bureau chief of trade journal Billboard, said the Zbitnew incident left Mr. Camilleri much more wary, and from that moment on, he became a more cautious and protective CEO. Several industry sources describe him as an aloof executive who was fairly selective in the industry events he attended.
"Rick had his inner circle of people," a former Sony manager said.
Mr. Camilleri said he regularly attended industry functions, such as the annual Juno awards. However, he is guarded about his time in the music trade, answering several questions about his tenure with pursed lips and a shoulder shrug.
Fuelling resentment among some members of the Sony staff was the rise of his twin brother, Ron. Under Mr. Camilleri's administration, Ron climbed the corporate ladder through the mid-nineties, eventually securing a senior position at subsidiary Columbia Records. The Camilleri brothers were the subject of much gossip in the halls of Sony, earning the nickname Pinky and the Brain, a reference to a mid-nineties animated comedy about two lab mice plotting to take over the world.
Mr. Camilleri said the motives of his Sony critics are worth investigation.
"You are listening to industry gossip," he said. "We were building our company and we had enormous success and that speaks for itself."
By the end of the decade, the recording industry was reeling as on-line pirate music services gobbled up market share. In July, 2000, Mr. Camilleri dismissed more than 30 Sony staff members, including a handful of senior managers and directors. Three weeks later, he announced his own departure, turning down a position in New York's head office, ostensibly to study medicine. It was not until mid-November that Denise Donlon, a CHUM Ltd. broadcasting executive and on-air personality, was named Sony's new president.
Mr. Camilleri had a short and successful stint running Arius 3D Inc., a digital imaging company based in Mississauga. As chief executive officer, he resolved key strategic issues for the private firm and secured U.S. venture capital for future growth, chief financial officer Jim McGlone said.
Several sources close to CanWest have little sense yet of Mr. Camilleri, viewing him as energetic and ambitious, but largely untested. To date, he has kept the specifics of his strategy under wraps, speaking in convergence jargon of delivering "high-quality content that we can repurpose across platforms."
More details are expected today when he addresses the annual gathering of the Canadian Media Directors Council in Toronto.
What is known is this: Going forward, there will be increasingly closer integration of news gathering and advertising sales across TV, newspaper and Web site operations. Job duplication across the company will be eliminated, Camilleri claims, but the bulk of profit gains will stem from revenue creation via new content rather than cost-cutting efforts.
The most contentious measure since Mr. Camilleri's arrival is the decision to put day-to-day Canadian operations under his control, a restructuring that removes two key senior managers and integrates two historically separate media properties.
As expected, Don Babick, the 61-year-old head of newspaper operations, will leave CanWest at the end of April. Of more concern is the scheduled August departure of Gerry Noble, 44, a well-regarded executive who has made the financial performance of CanWest's TV operations the envy of the industry.
"Trying to meld the operations to get rid of a layer of management I think is not the way to go . . . you lose the executive talent and the people that drive the business," said a CanWest insider who asked not to be identified. New, potentially costly content doesn't guarantee increased ad revenue, the source said.
Jack Tomik, president of CanWest Media Sales, disagrees, arguing that management consolidation is the natural evolution of the company.
"I'm a believer that this is the right thing to do," Mr. Tomik said. "You can have a quarter-to-quarter kind of outlook on life or you can have a longer-term outlook. . . . I think you will see some growth out of this guy."
Company watchers suggest CanWest has had little choice but to seek new talent to tout the wonders of convergence. A successful game plan is essential for the company to justify its costly $3.2-billion acquisition of the bulk of Hollinger Inc.'s Canadian newspaper assets in 2000.
"When you've positioned yourself as a convergence company, you can't go back and say you're a newspaper and TV company," a second Toronto media analyst said. Mr. Camilleri is "the man, baby. Noble and Babick out, no replacements, all the direct lines go to him."
Mr. Camilleri is approaching the task at hand with steely resolve and few doubts.
"I fully expect I will be judged on the results that we deliver. My philosophy through my career has been simple. I'm not the type to go out and make bold promises. . . . I'm not going to talk about what we're going to do, we're going to talk about what we've done."