The entertainment company’s believers and skeptics will find something to support their cases in the report this morning about Time Warner‘s Q4 results. But early traders like what they see, including the forecast for low-double-digit growth in adjusted earnings this year: the share price is +4% in pre-market trading. In Q4, Time Warner generated net income of $1.17B, +51.3% vs the period last year, on revenues of $8.16B, -3.5%. Revenues were a little short of analysts’ consensus forecast for $8.25B. But adjusted earnings at $1.17 a share were well ahead of predictions for $1.10. At Time Warner’s Networks unit, which includes Turner Broadcasting and HBO, rising ad sales and affiliate fees resulted in a 5% increase in revenues, to $3.7B, with operating income +21% to $1.4B. CNN was helped by the presidential election, while TNT benefitted from an increase in the number of NBA games. The Warner Bros Film and TV Entertainment operation fared less well, with revenues -4% to $3.7B but with operating income +29% to $552M. Time Warner trots out the “difficult comparisons” excuse for the revenue decline, noting that last year it had the home video of Harry Potter And The Deathly Hallows Part 2 and the video game Batman: Arkham City. And, once again, the Time Inc magazine publishing division had woeful numbers with revenues -7% to $967M and operating income -3% to $200M. Ad sales were down while subscription revenues were flat. READ MORE »
Private equity firms Permira and KKR are said to be working with JPMorgan Chase on options for their 53% stake in German broadcaster ProSiebenSat.1 Media. The firms could sell to another company or on the open market, …
The layoffs in the 8,000-person workforce will “come from all areas of Time Inc. across our locations – both domestic and international,” the magazine publishing unit’s CEO Laura Lang told staffers in a memo. No word yet on which …
UPDATED SHOCKER! Kevin Tsujihara To Become Warner Bros CEO; Bruce Rosenblum And Jeff Robinov Didn’t Find Out Until Late Last Week; “I’m Disappointed; Who Wouldn’t Be?” Rosenblum States; “Excellent Choice,” Robinov Says
2ND UPDATE (includes Robinov statement): Hollywood is stunned. Time Warner Chairman/CEO Jeff Bewkes just destabilized Warner Bros in a big way with today’s shockingly unexpected announcement that Kevin Tsujihara will take over Warner Bros on March 1st. I actually heard this two weeks ago from a source – and I didn’t believe it. That’s not a knock on Tsujihara’s ability. But no way Bewkes could ignore the fact that Bruce Rosenblum‘s Warner Bros Television Group accounts for 50% of overall Warner Bros revenues.* But Bewkes did. “Obviously, I’m disappointed; who wouldn’t be?” said Rosenblum, the TV president who was actively campaigning for the post, in a surprisingly candid statement. ”Warner Bros is a unique and special place and I know it will be in good hands with Kevin at the helm. I continue to be proud of our accomplishments and I have the most respect and admiration for our amazing team at the studio – a team that is thriving in an ever-transforming business.” Warner Bros Film Group topper Jeff Robinov at first remained silent and his office told Deadline it was “highly unlikely” he would have a statement. Now, one has been released – and it’s studiedly upbeat: “I am truly happy and proud of Kevin. We are both good friends and colleagues and I think he’s an excellent choice for the job. The Company will be in great shape under his leadership,” said Robinov. In fact, insiders tell me that Bewkes further humiliated Rosenblum and Robinov by not telling them about the choice of Tsujihara. I understand the duo had to hear about it at the last minute late last week from outgoing Barry Meyer.
[*Time Warner doesn't break out Warner Bros in its financial statements so that statistic may include Turner which doesn't report to Bruce. Warner Bros results are included in the 'Film And TV Entertainment' unit. It accounted for 40% of Time Warner revenues in the first 9 months of last year - $8.3B out of $20.6B - but just 17% of operating profit - $676M out of $3.9B. While Time Warner doesn't break out numbers for Warner Bros Television, it has revenues for "Theatrical Product" and "Television Product." Theatrical product accounted for $4B in the first 9 months ($1.4B from film rentals, $1.3B from home video and electronic delivery, $1.1B from TV licensing, and $127M from consumer products and other). Television product came to $3.4B ($2.6B from TV licensing, $617M from home video and electronic delivery, and $208M from consumer products and other).]
Here’s what Bewkes and Meyer said about their decision in a joint statement: “Given the talent, depth and strength of the Warner Bros’ leadership, selecting our next CEO was not a decision that could be made hastily or lightly. But we both agreed that Kevin is the right person to lead Warner Bros. and to build on its proud heritage as the world’s most storied content producer… In 2005, Kevin was appointed to head the then newly formed Home Entertainment Group, which he has skillfully led through a difficult transition and which remains number one in the industry by every measure. Just as importantly, he is a leading voice in creating and deploying new digital models to ensure that we remain market leaders. We’ve both been very impressed with Kevin’s strategic understanding and intuitive grasp of the evolution of the consumer’s interaction with our television shows, films and video games, and his ability to visualize how our products will be enjoyed in the future.” Warner Bros Home Entertainment’s division covers home video as well as the company’s wide ranging videogame properties and investments, digital distribution, anti-piracy, and emerging technology operations
Few thought Robinov was seriously in the running for the top job since he’d only taken over as film studio president in Spring 2011 from outgoing Alan Horn (now heading up Walt Disney Studios after Bewkes unceremoniously kicked him to the curb). But conventional wisdom was that Rosenblum, who took over the TV group in 2005 the same year that Tsujihara took over Home Entertainment, had a near lock on the job – especially if Bewkes decided not to go outside. And an appointment of Rosenblum would have continued Meyer’s TV leadership at Warner Bros and therefore not been questioned. Sounds to me like Meyer betrayed Rosenblum. Of course, Rosenblum still has an alternative power platform as Chairman of the Board of the Academy Of Television Arts & Sciences since November 2011. Robinov, meanwhile, has kept and is keeping his head down, immersed in developing powerhouse franchises like The Hobbit and perhaps Man Of Steel to replace Harry Potter and the most recent Batman trilogy.
Undoubtedly, Tsujihara’s new appointment will spark debate inside and outside Hollywood over whether Home Entertainment is most important to the future of Big Media. And whether content or platform/delivery should dominate. Of course, Bewkes could have (and in my opinion, should have) done nothing for several more years, and simply allowed his Warner Bros troika to coexist as equals. Now Bewkes, especially given the harshly crude way he handled this announcement, is risking the loss of two superlative executives. Keep tuned.
This is the second licensing deal the entertainment giant has cut with Netflix over the last week. In the latest one, beginning on March 30 the streaming service lands all past seasons of Cartoon Network‘s Adventure Time, Ben 10, Regular Show, and Johnny Bravo, as well as Warner Bros Animation’s Green Lantern. It also will have Adult Swim shows Robot Chicken and Aqua Teen Hunger Force, Sony Pictures Television’s The Boondocks and Warner Bros Television’s Studio 2.0′s Childrens Hospital. Subscribers have to wait a year, to January 2014, before Netflix begins its exclusive streaming run of the first two seasons of TNT’s Dallas. The companies didn’t disclose financial terms.
The addition of children’s shows to Time Warner‘s deal with Netflix may revive the debate over whether the streaming service is cutting into ratings for ad-supported kids shows on TV. That was a big concern last year when ratings dropped at Nickelodeon after many of its shows appeared on Netflix.
Here’s today’s release:
Big names joining the entertainment giant’s $36M Series C financing effort for the YouTube channel creator include Robert Downey Jr, Elisabeth Murdoch, and producer Jon Landau — as well as Greycroft Partners, GRP Partners, Jon Miller and Jimmy Yaffe’s investment company FUEL:M+C, and Daher Capital. “Our investment in Maker gives us insight into next generation video content and the ever evolving online video landscape, as well as access to new producers of content for Time Warner’s existing television, film and cable network operations,” says Time Warner Investments’ SVP and Group Managing Director Rachel Lam, who will join Maker’s board. The venture’s online stars include KassemG, Nice Peter’s “Epic Rap Battles of History,” the Shaytards, SnoopDogg’s WestFestTV, The Yogscast, The Gregory Brothers, Bad Lip Reading and Mike Tompkins. Maker says it will use the cash to accelerate its “rapid growth as a global platform for online programming while continuing to build brand and partner relationships.”
We’ll have to wait for Time Warner‘s SEC filing to see most of the terms. But the company announcement says there’ll be no change to Jeff Bewkes‘ base salary and bonus target, and that his annual long-term incentive awards will be “tied directly, and solely, to future financial and shareholder returns.” Since he became CEO in 2008, the value of Time Warner’s shares has declined 8.7% while the benchmark Standard & Poor’s 500 fell 6.5%. But over the last 12 months, the company is up nearly 36% while the S&P is +11%. Bewkes’ total compensation package came to about $26M in 2011 and in 2010. Here’s the release:
NEW YORK, November 20, 2012 – Time Warner Inc. today announced a new employment agreement with Chairman and Chief Executive Officer Jeff Bewkes, extending his term another five years through 2017.
Listen to the latest episode of Deadline Big Media With David Lieberman podcast here. This week, Deadline Executive Editor Lieberman and host David Bloom discuss what this week’s presidential election may mean for Big Media companies and Hollywood; why Time Warner doesn’t want to create its own broadband subscription channel; and why the CEOs of Disney and CBS are pushing to measure TV ratings over a full week, even as Lionsgate’s boss wants to have some “adjustments” in such an idea.
The entertainment giant needed to keep things under control in a quarter when ad sales were just so-so, and it had little to propel the film slate aside from The Dark Knight Rises. Net income for Q3 came in at $838M, +1.9% vs the period last year, on revenues of $6.84B, -3.2%. Revenues were lower than the $6.9B that analysts anticipated. But earnings at 88 cents a share beat forecasts for 82 cents. Time Warner‘s Networks unit, which includes Turner Broadcasting and HBO, pretty much matched the Street’s expectations with $3.3B in revenues (+4%) and operating income of $1.2B (+12.1%). The 7% increase in pay TV affiliate revenues and a pickup in HBO subscribers offset a 1% decline in ad sales. Turner was able to charge higher rates, but the overseas business was hurt by unfavorable currency exchange rates and the closing of entertainment networks Imagine in India and TNT in Turkey. The numbers were light in Film and TV Entertainment, which includes Warner Bros. Revenues fell 12.1% to nearly $2.9B — slightly ahead of forecasts — with operating income of $328 (-37.4%). The company says it couldn’t keep pace with last year, which included Harry Potter And The Deathly Hallows Part 2 and license fees for The Big Bang Theory and Friends.
Looks like Paul Ryan’s selection as the presumptive GOP VP nominee has caused changes in more than just the Presidential race. CNN said today that they are going to change their Sunday programming schedule because the network wants to amp up its political coverage due to this latest twist in the White House race. State of the Union with Candy Crowley will now air live from 9–11 AM EST. The expanded political show will be followed by Reliable Sources with Howard Kurtz, which stays in its regular slot, and then SOTU again at noon for an hour. That will be followed at 1 PM with a repeat of tonight’s 6 PM The Situation Room With Wolf Blitzer. There was no word on how long this new schedule would be in place. Today’s changes to the Sunday lineup come one day after Fareed Zakaria GPS was pulled out of its regular Sunday 10 AM and 1 PM slots. The long running weekly show was pulled due to the host’s suspension for admitted plagiarism. Originally, the news network said yesterday that the changes would be broadcasts of Your Money With Ali Velshi would air in GPS’s 10 AM Sunday time slot and The Situation Room With Wolf Blitzer will air in the show’s 1 PM slot.
The entertainment giant’s CEO kicked off his quarterly earnings call with analysts by paying homage to the shooting victims in Aurora at a showing of Warner Bros’ The Dark Knight Rises. He voiced ”our profound sadness about the terrible events” and added: ”Our deepest sympathies go out to the victims of this appalling …
Some analysts are beginning to wonder after seeing News Corp’s shares rise 11.6% from its decision last week. Time Warner would seem to be a natural candidate to try the same gambit: Like News Corp, Time Warner has a major publishing unit that many investors would like to ditch — and its stock could use a jolt after rising just 5.2% over the last 12 months. But analysts say that investors would be unimpressed if CEO Jeff Bewkes stole a page from Rupert Murdoch’s playbook. Time Warner’s publishing unit is much smaller than News Corp’s with $3.7B in revenues last year vs $8.5B for the owner of Dow Jones. “The relatively small size of the publishing segment suggests that a spin-off might prove to be too challenging” for Time Warner, says Dave Novosel of the independent corporate bond research service Gimme Credit. What’s more, he adds, Time Warner would feel the loss more acutely since