Analyst: Discovery Communications COO Departure No Cause for Alarm
Davenport's Michael Morris says that Peter Liguori's exit is not indicative of a larger problem at the cable networks company and that it seems amicable, but "reflects his somewhat limited creative role within Discovery."
NEW YORK - Following news early Wednesday that Discovery Communications COO Peter Liguori would leave his post after two years, Davenport & Co. analyst Michael Morris said "we don't view [the departure] as indicative of [a] larger problem."
In a note to investors, Morris wrote: "We believe that Mr. Liguori's departure is amicable and reflects his somewhat limited creative role within Discovery given the hands-on approach of highly-respected CEO David Zaslav and a strong network management team."
He pointed out that the reporting lines from segment leaders, such as Mark Hollinger, CEO of Discovery Networks International, and Eileen O'Neill, group president, Discovery and TLC Networks, to Zaslav "limited the opportunity that Mr. Liguori is seeking." In that context, it didn't come as a surprise that the company does not intend to refill the COO role, "reflecting confidence in the operating connection between CEO and division leadership," Morris said.
Combined with this summer's announcement that CFO Brad Singer would leave Discovery Communications in March, Morris said that some investors may view the Liguori exit as cause for concern.
"However, we view both Mr. Singer and Mr. Liguori as well-respected and relatively young leaders in the media industry who are likely to seek responsibility increases over time," he argued. "Given that Mr. Zaslav is also relatively young (early 50s), we expect him to remain in his CEO role for an extended period of time."
Meanwhile, S&P Capital IQ analyst Tuna Amobi said that Discovery Communications "appears in steady hands under CEO David Zaslav," but the Singer and Liguori exits "could kindle some urgency to convey management stability."
Amid a broader stock market decline, Discovery Communications shares were down 3.9 percent to $43.30 as of 10:15am ET. Over the past year, the stock has traded between $34.75 this August and $45.81 in May.