Parsons, Richard

By: James Kates

Source:

 Encyclopedia of African American History, 1896 to the Present: From the Age of Segregation to the Twenty-first Century

Parsons, Richard

(b. 4 April 1948),

lawyer, political operative, and corporate executive. Richard Dean Parsons rose to the highest ranks in corporate America as head of Time Warner, the world's largest media company at the time. From modest beginnings, Parsons became a protégé of New York's Rockefeller family and won fame as a political strategist, negotiator, and consensus builder.

Parsons was born in Brooklyn, New York. From Brooklyn's Bedford-Stuyvesant neighborhood, the Parsons family moved to the New York City borough of Queens, where young Richard went to school in an ethnically mixed setting that included Jews and Italian Americans. His father was a technician for Sperry Rand Corporation, and his mother was a homemaker; his grandfather had worked as a groundskeeper for the Rockefellers. A precocious student, Parsons skipped two grades and entered the University of Hawaii at age sixteen. He graduated from Albany Law School in 1971, achieving the highest score among thirty-six hundred people who took the New York State bar exam that year.

Richard Parsons. BET honorees. From left: Tyra Banks, Representative Maxine Waters (D-California), Cornel West, Janice Bryant Howroyd, Alicia Keys, and Richard Parsons, Washington, D.C., 2008. Photograph by Jacquelyn Martin.

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At age twenty-three Parsons joined Governor Nelson Rockefeller's staff as a legal aide. Parsons often has been described as a “Rockefeller Republican,” conservative on fiscal policy but liberal on social issues. Gerald Ford, who became president upon the resignation of Richard Nixon in 1974, tapped Rockefeller as his vice president. Rockefeller brought Parsons to Washington, D.C., where Parsons worked as a White House lawyer and a domestic policy adviser to Ford. When Ford left the presidency in 1977, Parsons returned to New York and joined the law firm of Patterson, Belknap, Webb & Tyler. Becoming a partner in just two years, Parsons had prominent clients, including Margaretta “Happy” Rockefeller, the widow of Nelson Rockefeller, who died in 1979.

In 1988 Parsons became chief operating officer of the Dime Savings Bank of New York. Some found it a surprising move, for the lawyer had no experience in the banking industry. His negotiating skills soon proved useful, however, because the thrift institution was on the verge of financial ruin. Parsons became chairman and chief executive officer of the Dime in 1990. He pared its corporate structure, laid off staff, and won abeyance from federal regulators while he reduced its bad debt.

Parsons became president of Time Warner in 1995 after serving on its board since 1991. Again the announcement surprised some analysts, because Parsons had no media experience. Time Warner was a sprawling colossus. Its businesses included the Warner Brothers film studio and Time magazine, as well as book publishing, music, and television interests.

As the company's number two executive, Parsons helped implement a merger subsequently described as the worst in corporate history, the union of Time Warner and America Online (AOL), in 2000. Announced at the crest of the dot-com mania, the union became an epic clash of cultures. The turmoil eventually brought down both Parsons's boss Gerald M. Levin and Levin's partner-turned-rival, the former AOL chief executive Stephen M. Case. As a conciliatory figure amid fierce corporate infighting, Parsons became chief executive officer (CEO) of the new AOL Time Warner in May 2002 and added the title of board chairman a year later.

Parsons inherited huge challenges at the company. It was saddled with $27 billion in debt and a fallen stock price that had devastated employee morale. The aggressive, Internet-driven culture of AOL and the cooler, “old media” atmosphere of Time Warner put top executives at odds. And federal regulators were investigating purportedly inflated financial statements made at the time of the merger.

Parsons won applause for cutting the company's debt and streamlining its business structure, selling off some divisions, including the Warner Music Group. AOL, the former high-flying Internet service provider, failed to meet growth expectations, and the company removed “AOL” from its name in 2003. The government probe was resolved, and even Parsons's detractors credited his diplomatic skills for ending the company's culture wars and putting the company on an even financial footing. Meeting perhaps his greatest challenge, Parsons fended off a bid by the corporate raider Carl Icahn to break up Time Warner. Parsons rallied institutional investors and even wooed Icahn himself, charming the former adversary and appeasing him by approving a buyback of Time Warner shares.

Still, Time Warner's stock price stagnated during Parsons's tenure, and critics said that he had done too little to boost shareholder value. He left the CEO job in January 2008, replaced by Jeffrey L. Bewkes, Time Warner's president. Parsons remained as chairman of the board.

Parsons served on the board at Howard University, as chairman of the Apollo Theater Foundation, and as a consultant to the Executive Leadership Council, an organization for African American executives. Though often cited as a role model, he was reluctant to say that his race had either helped or hindered his career. “For a lot of people race is a defining issue,” he told the New York Times. “It just isn't for me. It is … like air. It's like height. I have other things I'm focused on” (Elisabeth Bumiller, “Time Warner Official Breaks with the Mayor,” 5 January 1997).

[See also Economic Life.]

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