NEW YORK New Time Warner CEO Jeffrey Bewkes unveiled initiatives Wednesday in his first earnings conference call since taking the reins of the conglomerate.
Among them were a review of New Line Cinema’s operations and possible efficiencies with Warner Bros., a possible separation or buy-in of Time Warner Cable, a split of AOL’s audience and access businesses, as well as more than $50 million in annual corporate cost cuts.
In an unusually revealing call, Bewkes sent the first formal signals from the top of the conglomerate that TW is rethinking its approach to its film operations. This could make New Line a label within the firm and set up co-chairmen and co-CEOs Michael Lynne and Bob Shaye for a departure, as some have suggested.
Bewkes promised the Street “a straightforward dialogue” as he embarks on his goal of increasing the value of the conglomerate and its long-languishing stock price “on a sustainable, long-term basis.”
TW will immediately implement what he called an “initial round” of corporate cost cuts worth 15 percent, or more than $50 million annually.
Also on the cost side, he said the conglomerate is “evaluating whether it still makes sense to operate two separate [studio structures]” at a time when the importance of international box-office is rising and studios make fewer releases. This, in fact, means the company is reviewing how to operate New Line “more efficiently,” the TW CEO said.
Also in terms of running TW’s businesses more efficiently, Bewkes said the firm — and most in the industry overall — need to be “a bit more revolutionary than evolutionary” in digital initiatives. Among other things, he reiterated his view that all linear TV networks should be available on demand via broadband and TV sets. As such, TW will make its own networks available on-demand “aggressively” to “show the industry the benefits.”
Discussing his second focus on making sure TW owns the right businesses, Bewkes said the company is starting talks with TWC about how to possibly restructure their current relationship. TW owns 84 percent in TWC, and many analysts have predicted, the company could sell a bigger stake or all of it over time. Bewkes and his CFO John Martin though signaled Wednesday that TW could also buy in TWC again.
AOL has long been rumored to be up for a possible spinoff or sale, and Bewkes said Wednesday he plans to separate its audience and access businesses to position both to take advantage of possible deals. While he didn’t specify possible options, he signaled there could be “arrangements with other companies.”
Asked about the impact of Microsoft Corp.’s takeover bid for Yahoo on AOL, Bewkes said it “underscores the value” of big online audience businesses like AOL and the unit’s recent focus on improving its advertising monetization.