CEO Jeff Bewkes must be glad that he only has to meet with ordinary shareholders once a year. Two dominated the Q&A session at today’s gathering with questions based on a view that Time Warner is engaged in campaigns to promote President Obama’s political fortunes, and gun control legislation. One found it suspicious that Michelle Obama awarded the Oscar for Best Picture, won by Warner Bros’ Argo. He noted that actor George Clooney — one of the film’s producers — had hosted fundraisers for the Obama campaign, and that the President and First Lady attended TNT’s annual Christmas In Washington special to raise money for the Children’s National Medical Center. “What a way to say ‘thank you’,” the shareholder said. Bewkes explained that the TNT show invites “sitting office holders that we have elected, whether wisely or not. They are not candidates.” As for the Oscar, “that’s done by the members of the Academy….That’s a whole forest if you wander into that.”
EXCLUSIVE: Warner Bros TV Shake-Up – Top Exec Bruce Rosenblum Settled Out And Peter Roth Signed To Big Long-Term Deal; All The Behind-The-Scenes Drama & Detail
UPDATE SUNDAY 2 PM: Warner Bros Entertainment CEO Kevin Tsujihara is finally confirming internally my news that Warner Bros Television Group Bruce Rosenblum is exiting. This, after Tsujihara for months and even in recent weeks has told almost everyone there that Rosenblum was staying.
BREAKING … SATURDAY 10 PM… EXCLUSIVE: Hollywood always fires people in success, or so the saying goes. I’ve learned that the announcement by Warner Bros Entertainment CEO (and soon-to-be-chairman) Kevin Tsujihara is planned for 7 to 14 days after next week’s TV upfront presentations. Despite Tsujihara’s claims for months that he hadn’t made up his mind what to do about the brilliant but sharp-elbowed Bruce Rosenblum, I can tell you Tsujihara declared from Day One of his new job that “Bruce is an unnecessary layer of management”. This, even though Rosenblum’s Warner Bros Television Group consistently contributes half of Warner Bros Entertainment’s profits year after year. I’m told that Rosenblum won’t be replaced as President of the Warner Bros Television Group now that he’s quietly settled out his contract which expires in August. (Tsujihara never made a move to negotiate a new one for him.) Some already expect Rosenblum not to turn up at next week’s upfronts. Instead Bruce is sitting on a fat severance package in recognition of his more than two outstanding decades at Warner Bros and for keeping his mouth shut during the humiliation of losing the WB CEO job and then getting kicked to the curb on top of that. Many in Hollywood thought Tsujihara might keep Rosenblum in place rather than bust up what is so obviously a winning formula atop the TV group. Instead Tsujihara proved that, just like his Time Warner boss Jeff Bewkes, he is more obsessed by politics and personality than profit. (“It would have been pretty awkward, quite frankly,” Tsujihara told the TV community about keeping Rosenblum on.)
Warner Bros Television President Peter Roth has just been signed to a new long-term deal and will report to Tsujihara for the first time. Roth reps the increasing power of content and the executives directly responsible for its creation. ”As I look at the key people that exist, Peter comes at the top of the list. He’s at the top of the game right now creatively,” Tsujihara enthused privately on Day One of his new job. But Rosenblum’s roles will be assumed by a new WBTV leadership mix including Warner Bros TV Group EVP Craig Hunegs, Warner Bros International Distribution President Jeffrey Schlesinger, and Warner Bros Television EVP Brett Paul. (“Peter is the big teddy bear but Brent was sent in to beat you up,” notes one exec.) These guys are some of what Bewkes was referring to back on January 28th when he talked about the “very strong benches of people beneath”. All will become the TV group’s new sharp-elbowed negotiators who won’t rub people the wrong way like Rosenblum did.
It’s been a professional and emotional roller-coaster for Rosenblum ever since he expected the top job and didn’t get it.
“As a category more often than not you end up ahead” with the big-budget extravaganzas, the Time Warner CEO told investors today at the Jefferies Global Technology, Media and Telecom Conference. Despite the high costs, franchise properties are …
Jeff Bewkes doesn’t fear that his company will be squeezed by Netflix’s growing desire for exclusive programming — a potential issue at Viacom where Netflix says it won’t renew their broad licensing deal at the end of …
The first three months of 2013 were mixed for the entertainment giant. Time Warner says this morning that it generated net income of $720M, +23.9% vs last year’s Q1, on revenues of $6.93B, -0.6%. That missed the consensus analyst forecast of $7.12B. But adjusted earnings at 82 cents a share were well ahead of predictions for 74 cents. At the cable networks, including HBO, revenues were up 3% to $3.7B with operating income +11% to $1.3B. The company says that a 1% decline in ad sales ($12M) and 4% drop in content revenues ($11M) took some of the edge off of subscription revenues which were +5% ($115M). Ad growth at Turner‘s U.S. entertainment networks “was more than offset by declines at its news networks, due to lower demand” as well as the closing of channels in India and Turkey last year. Film and TV entertainment saw operating income grow 23% to $263M even though revenues fell 4% to $2.7B. Time Warner attributes the decline to “lower theatrical performance and a decline in television licensing revenues” — adding that it was offset by higher home video sales for The Hobbit: An Unexpected Journey and Argo. Meanwhile the magazine publishing unit, which the company plans to spin off, generated a $9M operating loss (vs last year’s $5M loss) on revenues of $737M, -5%.
The proxy filed at the SEC this afternoon says that the CEO’s contract emphasizes long-term performance over year-to-year metrics. Still, Jeff Bewkes shouldn’t complain about his compensation for a year when Time Warner shares appreciated nearly 30%. His package includes $2M salary, $6.9M in stock awards, $3M in option awards, $13.6M in non-equity incentives, $219,560 change in pension value, and $167,943 in other compensation. Most of the “other” pay is for his personal use of the company aircraft. Time Warner says that “for security reasons” Bewkes was given a car and driver and “was encouraged to use Company aircraft for business and personal use.” Bewkes’ pay was 4.5 times higher than the median for his four closest colleagues, just a tad better than last year’s 4.6 times but still well over the line (3 times) that makes corporate governance watchdogs fear that a CEO wields too much power.
The Washington public policy exec just founded Linda Bloss-Baum Creative Strategies, and it will offer “communications and advocacy services,” Politico reports. Bloss-Baum had been Time Warner’s VP for public policy since 2011 and earlier represented Warner Music and Universal Studios after serving as counsel to the House Energy and …
Listen to (and share) episode 26 of our audio podcast Deadline Big Media With David Lieberman. Executive Editor Lieberman and host David Bloom look at Fox’s decision to launch a national sports channel; Time Warner’s plan to spin off its Time Inc. holdings; and Bob Iger’s wins at the Disney annual meeting this week.
Wall Street’s divided on the question this morning, with Time Warner shares up just 1.3% following the announcement last night that it will convert the publishing unit into a separate company by year end. Make no …
Time Warner’s talks with Meredith Corp about combining their magazines in a separate company collapsed today. But here’s Plan B for the media giant: It will spin off its publishing arm into an independent, publicly traded entity, likely by year end. Until recently, Time Warner execs scoffed when asked whether they’d consider mimicking News Corp, which is spinning off its newspaper assets. Now, though, Time Warner CEO Jeff Bewkes says the idea provides “strategic clarity” that will enable his company to “focus entirely on our television networks and film and TV production businesses.”
Don’t tell the Time Warner CEO that cable and satellite subscribers are fed up with rising prices, and tempted to replace them with some combination of free TV and Web services such as Netflix. Pay TV is “getting to be a better deal for consumers and a better deal in the opinion of consumers,” Jeff Bewkes told investors at the Deutsche Bank Media, Internet and Telecom conference. “Even in this recession, you don’t have cord cutting.” What’s more, TV viewing is up at a time when “you have increases in the quality and programming budgets of all these networks.” When companies including Time Warner Cable and Dish Network offer low priced packages with relatively few channels “nobody buys them.” And TV Everywhere will make consumers more attached to pay TV. “It’s all going on demand, on every Internet device you have for free because you have a subscription.” What if he’s wrong, and consumers want something cheaper? Time Warner will still be fine, Bewkes says. “We all know that the reason [prices are] up is the sports fee, it’s not anything else. Half of citizens don’t want that.” But 90% of his company’s affiliate fees come from four networks including TNT and TBS that are built around entertainment. If consumers want bundles without sports then “we’ll be in their bundles.” And low priced offerings would lower the threshold for subscribers to also subscribe to HBO. “That would be great for HBO,” Bewkes says.
With apologies to Bill Maher, here’s a New Rule for Big Media CEOs when they decide to raise their dividends or announce a major new stock-repurchase initiative. They have to stop insisting that it’s a sign of confidence and strength in cases where they’re just bribing investors to keep them from fleeing.
This thought struck me in the Q4 earnings season that’s wrapping up. Just about every big company that fell even a little short of Wall Street’s expectations had a new plan to return cash to shareholders. The explanations were consistent. After CBS missed analysts’ revenue and earnings targets, CEO Les Moonves said his accelerated $1B share repurchase reflects “the great confidence we have in our businesses.” At Time Warner — which missed revenue forecasts but beat on earnings — CEO Jeff Bewkes said that it was able to authorize an additional $4B share repurchase and an 11% dividend increase because “we’re at an even stronger position today than we were a year ago.” Then there’s Comcast, which just slightly missed revenue and earnings expectations but raised its dividend by 20% and agreed to repurchase $2B of stock, while announcing that it will pay $16.7B for General Electric’s 49% of NBCUniversal. The moves demonstrate “confidence and optimism in the future of all our businesses,” CEO Brian Roberts said.
They’re right in this sense: Most Big Media companies are part of pay TV oligopolies that still have scandalous power to set and raise prices — mostly by requiring people who want to keep up with the national conversation to pay for dozens of channels that they never watch. Execs also had encouraging reports about current concerns. Generally speaking, ad sales picked up in Q4, and TV viewers returned to the major broadcast networks after the dismal opening weeks of the fall primetime season.
But if executives are so bullish about their companies, then why do they consider it such a great thing to give cash to investors to spend elsewhere? Wouldn’t they demonstrate their faith more persuasively if they used the funds to expand — you know, create jobs — or buy assets in complementary or growing fields? It’s not like we’re still in the depths of the recession when media stocks were such a bargain. CBS shares are more expensive than they’ve been since the end of 2005 when it separated from Viacom. Time Warner’s at a five-year high. And Comcast is at its all-time best. If the investment strategy is to buy assets when the price is high, all I can say is, folks, don’t try this at home.
Listen to (and share) episode 23 of our audio podcast Deadline Big Media With David Lieberman. This week Deadline Executive Editor Lieberman and host David Bloom look at a bullish CBS and its new minority stake in AXS TV; an upbeat Discovery despite missing the quarter’s expectations, Media Rights Capital’s new movie co-financing business and Time Warner’s decision get out of a very old business.