From 'Assholes' at Enron to Insulting Steven Spielberg: 5 Big Conference Call Gaffes
AOL CEO Tim Armstrong's recent firing of a Patch executive is part of a rich history of bizarre conference call behavior over the years.
After four days of media blowback, AOL chief executive Tim Armstrong might be regretting his decision to angrily fire a worker during a conference call with 1,000 employees on Friday. While not one of the CEO’s finest moments, at least he’s not alone when it comes to bizarre conference-call behavior that has sometimes resulted in criticism heaped on executives. Here are a few examples:
Enron, April 2001
After Wall Street analyst Richard Grubman had the temerity to note that Enron took the unusual step of failing to release balance sheets along with earnings statements, COO Jeffrey Skilling replied: "Well, thank you very much. We appreciate that ... asshole.” Eight months later, the company was brought down by an accounting scandal. Skilling is serving a 14-year sentence in federal prison for fraud, insider trading and conspiracy.
Viacom, Sept. 20, 2007
When Viacom purchased DreamWorks in 2005 for $1.6 billion, the deal called for Steven Spielberg to stick around until the end of 2008, and reports were swirling that efforts for a new deal to keep the filmmaker beyond that were not going well. With that as a backdrop, Viacom CEO Philippe Dauman said at a webcast investor conference that if Spielberg left, “The financial impact to Paramount first and especially to Viacom overall would be completely immaterial.” That comment prompted DreamWorks co-founder Jeffrey Katzenberg to say later at the same conference that Spielberg was a “national treasure.” Spielberg severed ties with Paramount in October 2008, and four months later a newly independent DreamWorks struck a 30-movie distribution deal with Disney.
Various companies, 2008
Over the course of several months, a mystery caller crashed the earnings calls of several companies. His method of operation consisted of using a name and firm familiar to executives while identifying himself to an operator, though when he was called to ask his question, he’d correct the operator by saying his name was actually "Joe Herrick of Gutterman Research," then he’d pose a complicated financial question. For example, he asked Molson Coors Brewing about their plans to bring down costs per hectoliter. As word spread of the hoax, some executives created secret passwords to share with legitimate analysts before conference calls.
Sirius XM Radio, Sept. 12, 2012
During an investor conference that was webcast, Sirius XM Radio then-CEO Mel Karmazin was acknowledging Liberty Media’s intent to take majority control of the satellite firm when he said: “My instincts are that Liberty does not need me at the company. … I have historically been expensive. It’s very clear to me that if I were Liberty, I would sit there and say, ‘I’m not sure we need Mel.’” Three months later, Karmazin relinquished his seat on the Sirius XM board of directors and stepped down as CEO. One month after that, Liberty Media took control over Sirius XM.
Netflix, June 22, 2013
Instead of a traditional earnings conference call via telephone to discuss quarterly earnings, Netflix CEO Reed Hastings opted for an interview conducted by CNBC anchor Julia Boorstin and BTIG analyst Richard Greenfield, sparking criticism in some circles. Before the event even began, for example, Webush Securities analyst Michael Pachter said on Bloomberg TV, a CNBC competitor, that it was suspicious Netflix chose an analyst who recommended the stock to participate in the interview. “I have a problem with one of my competitors accepting the invitation,” he said. “It makes him appear less than impartial.”
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