Will Time Warner Shrink?


Speculation over what incoming Time Warner CEO Jeff Bewkes will do is intense among the chattering classes. Clearly something needs to be done. Gillian Wee of Bloomberg speculates that dismantling the world’s largest media company might finally supply the lagging share price with some uplift. From Bloomberg:

”Bewkes will likely spin off the cable unit because its high debt levels and capital spending require a separate balance sheet, Poole said. The split might occur in the second half of 2008, while Time Inc. could be sold in a leveraged buyout when debt markets improve, Marangi said.

”Bewkes made Tony Soprano a household name when he ran HBO. He may ultimately preside over a Time Warner that’s half its current size with about $21 billion in sales, made up of its film businesses, including New Line Cinema, and TV networks, which include TBS in addition to CNN and HBO.

”Higher profit from networks and film would place Time Warner in the realm of Viacom, which was split in 2006 from slower — growing CBS Corp., Marangi said. ‘Networks and film benefit from things that have hurt cable — the emergence of AT&T and Verizon and the spread of digital distribution.”

Dick Parsons, the current CEO, hands over the reins of the company effective January 1, 2008. Full story here.

(image via yale.edu)