He used to peddle tobacco and likes to keep a low profile. Hardly suitable qualifications, one would think, for taking over from one of the most colourful and controversial executives in Spanish corporate history. Yet, writes Jennifer Green, Cesar Alierta has made a positive impression in a short time as the new boss of Telefonica.
The appointment four months ago of Cesar Alierta as the replacement for Telefonica chairman Juan Villalonga quickly gave rise to fears in the Spanish film and TV sectors that the company would drastically curtail its media activities.
To the relief of many, that has not been the case. Instead, last month, Telefonica Media executive president Juan Jose Nieto unveiled a blueprint to bolster his Telefonica subsidiary. Tellingly, Nieto's plan mirrors Alierta's preferred management model of decentralising power and business activities at the conglomerate: it restructures Telefonica Media into three prime business areas - content, free-to-air TV and pay-TV - with each having its own division head.
In just under four months, Alierta has redesigned Telefonica's executive diagram and, together with the heads of each subsidiary, is rethinking the company's internal and international strategies.
As anticipated, Alierta has returned Telefonica's headquarters to Spain after Villalonga's dispatching of power and personnel to Miami, Florida, and a new effort is under way to improve top-to-bottom relations with unionised employees. Alierta and his team carried out the Lycos and Endemol Entertainment acquisitions that Villalonga had forged and they have made a priority of bidding for third-generation mobile phone licences across Europe.
The conglomerate's new management style is palpably different under Alierta. Decidedly less flashy and outspoken than Villalonga, Alierta, 55, rarely appears in photos in the news media. A lawyer with a master's degree in business administration from Columbia University in New York City, Alierta was considered responsible for doubling the value of multinational tobacco outfit Altadis (formerly Tabacalera) in just four years as president before he came to Telefonica.
Alierta's style has been dubbed less "personality-driven" than Villalonga's. A month after he took the helm at Telefonica, national financial newspaper Expansion wrote: "[Alierta] is known for having his 'feet on the ground', which in his case means not hiding out in the upper offices of the presidency. Those who know him say that one of his principal virtues is an affinity for asking and getting information about what happens in his company from a thousand-and-one distinct channels. Affable and a great conversationalist in private, Alierta does not much like public appearances and eschews the spotlight. He prefers to maintain a low profile and surround himself with a trusted executive team that works with much independence."
After Villalonga's Lone Ranger-like forays into international acquisitions and a string of controversial internal moves such as a stock options plan for top executives, the mellow Alierta is just what the company's backers were after.
In fact, Alierta's appointment was widely portrayed as a means of appeasing Telefonica's majority shareholders, banks BBVA and La Caixa, as well as the Spanish government, by putting a halt to Villalonga's expansive and, according to some, out-of-control acquisitions strategy. Just a few months earlier, as a member of the Telefonica board, Alierta proved his loyalty to the centre-right government, BBVA and La Caixa when he backed their opposition to Villalonga's controversial proposed merger with Dutch telco KPN.
What's more, a series of US and Latin American media acquisitions rumoured to be in the pipeline under Villalonga never materialised. But Alierta has proved that he is no pawn for controlling interests. The decentralisation of decision-making power out to the three subsidiaries helps guarantee a certain level of autonomy. Under Alierta, the heads of acquired companies - such as Lycos president Bob Davis in Terra-Lycos and Endemol chairman John de Mol in Telefonica Media - have also been invited to continue to play key roles.
Recently, Alierta unexpectedly reversed Villalonga's plan for the sequential stock flotations of Telefonica's divisions. Market instabilities - which led to serious declines of Telefonica and Terra stocks this autumn and did not help Mobiles' unspectacular IPO last week - prompted Alierta to announce that Telefonica would postpone indefinitely the planned flotation of Media.
Yet far from the meltdown some were fearing at Media, the subsidiary now looks set to expand under Nieto and Alierta. Among the plans unveiled in this month's blueprint for a "new environment of convergence" are to incorporate fresh television interests in Latin America and a content packager in Spain.
As a result of Nieto's plan to restructure Telefonica Media into three divisions, in the content area, de Mol will oversee production and distribution for all of the company's media platforms. For free-to-air TV, Nieto's successful management model at Spain's Antena 3 will be applied to the company's existing and future Latin American holdings under the new Antena 3 CEO, Luis Velo. With pay-TV, a new content company will feed digital satellite platform Via Digital under the direction of Via CEO Juan Ruiz de Gauna.