Freston, Tom 1945–

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Tom Freston
1945–

Chairman and chief executive officer, MTV Networks

Nationality: American.

Born: 1945.

Education: Received undergraduate degree from Saint Michael's College; New York University, MBA, 1970.

Family: Married (wife's name unknown; divorced); married Kathy Law (a model and actress), c. 2000; children (first marriage): two.

Career: Benton & Bowles, 1970, account executive; 1970s, founder and owner of clothing-export business; MTV Networks, 1980–1987, director of marketing and various key posts in sales and programming and then vice president; 1987–, chairman and chief executive officer.

Awards: Mipcom Personality of the Year, Reed Midem Organization, 2001.

Address: MTV Networks, 1515 Broadway, New York, New York 10036; http://www.mtv.com.

■ Tom Freston joined MTV Networks in 1980 when it was a fledgling enterprise establishing the first television station devoted to the broadcast of music videos. After being appointed CEO in 1987, he oversaw the expansion of MTV Networks into a multibillion-dollar global corporation and the leading multimedia entertainment company oriented toward children, teens, and young adults. Under Freston's leadership, MTV Networks created some of the strongest brands in television, with certain shows receiving industry-wide record ratings and revenues. Freston also directed MTV Networks' ventures into recorded music, radio, feature films, publishing, and the Internet. Known for his passion for business, Freston was acknowledged among coworkers and industry analysts for fostering the freedom necessary for innovative thinking and maintaining a globally oriented outlook.

APPAREL BUSINESS PROVIDES A FOUNDATION

Freston grew up in suburban Rowayton, Connecticut. After receiving his MBA from New York University, he became an account executive with the Benton & Bowles advertising firm in New York. Freston left the company when he was 24 and moved to Aspen, Colorado, and later to the Caribbean, supporting himself as a bartender. He eventually traveled to India and set up a clothing-export business in New Delhi, which quickly prospered, shipping garments made in India as well as Afghanistan to retailers in the United States, Europe, and South Africa.

According to Freston, his experience with India's convoluted business laws taught him a great deal about navigating around the many roadblocks that can arise in marketing. In an interview with Jim Cooper for Mediaweek, Freston noted, "I felt that anything after that would be easier, and that's largely been true" (April 17, 2000). Freston also commented that the apparel and music businesses have many similarities, in that both must stay relevant to the target consumers or audience, whose tastes can rapidly change.

FROM KABUL TO CABLE

At the end of the 1970s Freston was forced to shut down his clothing business due to new American trade laws, and he returned to the United States. Interested in pursuing a career in the music business, he answered an advertisement in Billboard magazine for people to work on establishing a television channel devoted to the airing of music videos. In 1980 Freston was hired as director of marketing for MTV. To help the station get off the ground and become familiar to consumers, Freston and others traveled around the country drumming up support from affiliate television stations and record companies. In the process, they handed out MTV buttons at airports and even slapped MTV bumper stickers on rental cars.

When MTV finally reached the airwaves in 1981, it was a hit with the public as well as with record company executives, who saw a new marketing outlet through which to increase record sales. Freston soon attained posts in sales and then in programming. The initial surge in MTV's popularity died by the mid-1980s; ad sales slipped from $74.4 million in 1985 to $65.7 million in 1986.

APPOINTED CEO

When MTV's parent company, Warner Amex, sold MTV to Viacom, Freston was one of the few executives who had been with MTV from the beginning to stay on board. Freston, who was made a co-president of MTV, was mentioned as the possible new CEO, but many Viacom executives were unsure that he was CEO material. Still, MTV was floundering, and the consensus was that bringing an outsider into the insular MTV culture might make matters worse. Freston was appointed CEO of MTV in 1987.

Freston immediately set out to regroup and revamp the company. He overhauled the ad-sales group and fostered a closer working relationship between the advertising and programming sides of the business. As a result, total ad revenues at MTV rose more than 40 percent over the next year. Knowing that the attention span of his young audience was limited, Freston established an atmosphere of creativity among programmers. In 1985 Freston oversaw the creation of the Video Hits 1 (VH1) station and was also put in charge of Nickelodeon, the children's channel that came under the MTV Networks banner when MTV was purchased by Viacom. In an interview with Steven Beschloss for Business Month, Freston noted that running such a youth-oriented enterprise necessitated a constant search for new concepts, shows, and music, adding that after about "three months you have to change everything" (November 1989).

A GLOBAL OUTLOOK

After winning back audiences and advertisers to MTV Networks' three core channels—MTV, Nickelodeon, and VH1—Freston set his eyes on the global market and within two years had made MTV available in 24 countries. In 1988 the company's gross revenues were up 34 percent from the previous year, to $222 million. By 1994 MTV Networks' international business represented almost 25 percent of the company's revenues. In 2003, 80 percent of the company's revenues were generated outside the United States.

Freston also guided the company into other industries, such as film production, and established joint ventures to create businesses such as MTV's record club and the Comedy Central network. According to industry analysts, Freston's greatest triumphs may have been his championing of a continuous stream of successful new programs, such as Yo! MTV Raps, Behind the Music for VH1, and Rugrats and Blues Clues for Nickelodeon. By 2002 Freston showed that he still had the knack for programming when he approved production for The Osbournes, a reality show about the eccentric rocker Ozzie Osbourne and his family that was soon commanding a record $135,000 per 30-second commercial. Freston believed that The Osbournes, a show with nontraditional appeal, would become a multibillion-dollar international hit, and he proved to be right.

MANAGEMENT STYLE

Industry analysts and coworkers characterized Freston as a demanding boss, but one who sparked loyalty in his employees. In an interview with Jim Cooper for Mediaweek, Herb Scannell, who served as president of VH1, noted, "You want to do right by Tom, because he hasn't succeeded based on fear and intimidation" (April 17, 2000).

Freston was also noted for his ability to understand the many aspects of the entertainment industry, from programming to financial analyses to merchandising. He had a global outlook and tried to create value for shareholders. Above all, he was committed to recognizing the importance of brand. Freston told David Lipke for a Women's Wear Daily article, "A brand is a big advantage in a time of rapid change" (November 18, 2002). In an interview with Cooper for Mediaweek, the industry analyst Sandra Kresch summed up Freston's managerial abilities this way: "Above all else, he is personally passionate about the network, and that passion has let him go places with the business that someone who saw it only as a business would never see" (April 17, 2000).

A GUIDING LIGHT

As of 2004 Freston had thrived and succeeded as MTV Networks' CEO for nearly two decades, with MTV continuing as a cornerstone of youthful television viewing. The company's $27 billion business in 2002 represented the single largest asset for its parent company, Viacom. MTV Networks' revenues and operating cash grew by approximately 11 percent over 2003, and the company had averaged more than $1 billion in sales annually. Freston guided MTV Networks into a company comprising eight major domestic networks, 13 domestic digital networks, and more than 30 international outlets.