Changing of the Guard At Time Warner
Tuesday, November 6, 2007
Time Warner No. 2 Jeffrey L. Bewkes will take over the company when chief executive Richard D. Parsons ends his six-year stay at the top on Jan. 1, the company said yesterday.
Bewkes, 55, began at HBO as chief financial officer in 1986 and rose to become chief operating officer for Time Warner last year. He had been considered the front-runner for the top job, not only because of his success at HBO and the trust he has forged with other top-level company executives, but because he had few apparent rivals.
"Throughout his career, Jeff has demonstrated the capacity to generate industry-leading performances at our businesses, whether measured in terms of financial, operational or creative successes," Parsons said in a statement.
Time Warner declined to make Bewkes available to comment for this article.
Parsons, 59, took over Time Warner in 2002, a year after its ill-fated merger with AOL, which led to Securities and Exchange Commission fraud charges, a $100 billion loss in 2002, the disintegration of AOL, wholesale executive turnover and waves of layoffs.
He was charged by the board with cleaning up Time Warner and returning it to profitability. In August, the company reported second-quarter revenue was up 6 percent from the corresponding period last year, and operating income was up 12 percent. Parsons has said that he would step down as chief executive when he felt the company was on solid footing again. He will remain as chairman.
Parsons cites Nelson A. Rockefeller as his role model, and Parsons's Rockefeller Republicanism -- a doctrine based on compromise and conciliation that was attributed to Rockefeller when he was governor of New York in the 1960s -- was what Time Warner's board sought during the rocky post-merger years. Bewkes, who expanded HBO aggressively during his time there, is surely seen as the chief executive who can now expand Time Warner.
The two men contrast in other ways. Parsons did his undergraduate work at the University of Hawaii; Bewkes went to Yale University. But they also have their similarities. Parsons has invested in an Italian vineyard; Bewkes was the operations director for a California vineyard.
Bewkes does not plan to make public the details of his vision for Time Warner or lay out a 100-day plan anytime soon, according to a source close to the situation, who spoke on the condition of anonymity because Time Warner is in the SEC "quiet period" leading up to the reporting of its third-quarter earnings on Wednesday.
In conversations within the company, Bewkes has stressed that Time Warner's "flexibility" will allow it to expand globally and try to meet competitive challenges posed by mushrooming new media, including social-networking Web companies such as MySpace and Facebook and the delivery of content to mobile devices, the source said.
Despite calls from some, including activist investor Carl C. Icahn two years ago, to split up the media and entertainment colossus, observers should not expect Bewkes to move in that direction, the source said. It also is unlikely he will quickly choose a chief lieutenant, the source said, a possible setback for AOL chief executive Randy Falco, whom some had seen as Bewkes's likely deputy.
Bewkes, who has a business degree from Stanford, is known for a wicked and sarcastic sense of humor, friends say. In the year following the AOL-Time Warner merger, Bewkes bonded with other top-level company executives in high-pressure meetings during which the company worked to right itself.
He is particularly close to Warner Bros. studios chief Barry M. Meyer. Bewkes is thought of in Hollywood as a friend to content-creators and someone who can explain the high-risk, low-margin movie and television business to Wall Street.
Valued at $67 billion, Time Warner includes Warner Bros. movie and television studios, home to the "Harry Potter" and "ER" franchises; Time Inc.'s approximately 130 magazines; AOL; HBO; Time Warner Cable, the nation's second-largest cable company; Turner Broadcasting, which includes TNT and CNN cable channels; and New Line Cinema movie studio, which produced the "Lord of the Rings" trilogy. The company owned WB television network, but merged it with CBS's UPN last year to form The CW network.
Bewkes has been the head of the media giant's studios and television operation since 2002. For the seven years prior to that, he was in charge of HBO, growing the premium cable channel's subscriber base and overseeing the development of critical and commercial successes such as "The Sopranos" and "Sex and the City."
When Bewkes was at HBO, the cable channel expanded into a network -- HBO2, HBO Family, HBO Signature, HBO Latino, HBO Comedy and HBO HD channels. Bewkes worked deals with cable and satellite providers to get the additional channels on their systems, bringing more subscription revenue. That revenue allowed HBO to pay star actors, directors and screenwriters to produce top-level original programming, such as Spike Lee's "When the Levees Broke: A Requiem in Four Acts" documentary on the effects of Hurricane Katrina.