Time Warner update thread after analyst call - buying NBC/Universal?

[Sonar5]

Part I: - NBC/Universal Nugget is in Part II.

Hi all,

I had a pretty good thread back on December 30th, before the Warner announcement regarding Jeffrey Bewkes, Newly minted Time Warner CEO, and what their future plans might be.

Well, they released earnings yesterday, and there were some interesting quotes in there about New Line, Warner, dumping AOL, and Cable, etc.. A lot of what I talked about in the first thread which is here:

Thread #1:
https://forum.blu-ray.com/showthread...jeffrey+bewkes

Due to time, I wasn't able to get o original call, but I did listen to the replay. Darn family stuff.

So I got the Transcript of the conference call which can be found here:
http://seekingalpha.com/transcripts/for/twx

Here are the interesting points made by Jeffrey Bewkes:

REAL TRANSCRIPT QUOTES From Jeffrey Bewkes, you know the guy who dumped that dead format since it was nothing more than a distraction to their stock, much like a gnat on the back of a pig.

So enough of these dumb rumors, pipe dreams of studios being sold off by Time Warner. Here is what the CEO ACTUALLY Said, no Journalist spin, just real quotes, bolded, and highlighted by me.

Jeffrey Bewkes, CEO Time Warner

And to set the right tone, we are starting here at corporate where we are implementing immediately an initial round of cost reductions of over 15%, thereby reducing our run-rate at corporate by more than $50 million a year.


The other place we’ve identified for near-term cost cuts is New Line Cinema. We know from experience that there’s real value in New Line as an independent label and brand with its own slate of movies and New Line’s had great success with certain genres of films that are not historically in the sweet spot of large studios, particularly one like Warner’s, that appeals to really broad audiences all over the world.


But with the recent trend toward fewer movie releases across the industry and given the greater importance of overseas revenues, there’s the obvious question about whether it still makes sense for us to have two completely separate studio infrastructures at Warner and New Line. So we are reviewing how to operate New Line more efficiently and we expect to take action here fairly soon.


As we go forward, corporate and New Line won’t be the only places where we reduce costs and as it is often said, managing costs isn’t a one-time initiative. It’s a way of doing business. That’s true but cutting costs only goes so far and we have to innovate and invest in the future of our businesses at the same time.

On Time Warner Cable:

And in addition, it also appears that our current ownership structure with Time Warner owning about 84% of Time Warner Cable and with only 16% of its common equity owned by the public, is less than optimal for both companies.

So we are initiating direct discussions with their management and their separate board of directors regarding our ownership in Time Warner Cable. We expect to reach a decision on whether and how to change our ownership level by our first quarter earnings report at the end of April....


....But it doesn’t follow necessarily from that an optimistic view that Time Warner Cable is best-positioned in its current ownership structure within Time Warner......


...and we are starting a formal process to resolve our ownership of Time Warner Cable.

They have to act by then in order to reap a huge ONE TIME ONLY Tax benefit. So Long Cable....


On AOL, and Google Put.... If some of you know what that is, it is an Option of Google for AOL.

Jason Bazinet - Citigroup

Thanks so much. If I remember correctly, I still think Google has a put provision for the 5% stake they have in AOL and I guess my question is, as you think about potentially separating these businesses, does that pose any complications? And if not, is it just a function of allocating that pro rata potential need of cash based on the value of each of the pieces? Thanks.

Jeffrey L. Bewkes

I’ll start and John, you may want to comment. Yes, Google does have that and it’s not clear at all that they would necessarily want to act on it. And it would be -- it’s fine if they were to act on it. So we probably shouldn’t predict or discuss any ongoing talks, but Google is a fairly close business partner of ours. We talk to them all the time. We just can’t say much about it at this point, but I certainly don’t think you should look at it as any cause for concern for any reason.

Next is a question from Pali Capital analyst Rich Greenfield, a guy I follow.....

....And then two, I’m wondering if you could talk about from the standpoint of New Line whether there is any contractual issues with Michael Lynne and Bob Shaye in terms of their ownership directly of New Line that dates back to when they first came into the Time Warner fold, that would be helpful. Thanks.

Jeffrey Bewkes:

On the New Line side, good question there, but it’s very clear -- there are not any ownership positions in New Line. Time Warner owns New Line 100% and we have the same relationship with Bob and Mike that we do with all our other executives.

Pretty clear there...

Continued in next post.