EXHILARATING’’

EFF BEWKES
OESN’T HIDE
IS AMUSEMENT
when asked whether Time Warner is a
takeover target. Sitting at a large circular
table in a conference room on the
11th floor of the Time Warner Center, the
chairman/CEO ticks off the reasons why
the company is well-positioned to keep have been too timid,” says a former Time
thriving in its current configuration. He’s Warner investor. “It’s like [Jeff] has given up
brought along a yellow legal pad with trying to build the company.”
handwritten notes to ensure he doesn’t Time Warner was, of course, deeply
overlook any salient points.
scarred by the economic devastation of its
Bewkes, 64, really doesn’t need any union with AOL in 2001. Bewkes gets credit
reminders. He’s the one who wrote the even from his critics for helping the company
script for the new-model Time Warner.
recover from that mess. A year later
During his tenure as chief executive, it has he started his climb up the corporate ladder
been winnowed from the sprawl following
from HBO chief to chairman of Time
the AOL merger 15 years ago to a threepronged
Warner’s entertainment and networks
content company focused on TV, group, and then to chief operating officer.
movies, and digital across HBO, Turner, and He took the CEO reins from Richard
Warner Bros. Now, at a time of immense Parsons in January 2008.
industry upheaval, Bewkes favors a strategy The company’s financial track record
of holding steady with Time Warner’s formidable
under Bewkes speaks for itself. Shareholder
assets as they stand today. As talk earnings grew at a compound rate of
swirls about potential merger options — 17.3% from 2010 to 2015. In that same time
Apple? CBS? — Bewkes steadfastly insists frame, Time Warner returned some $29.1
he likes the hand he’s playing.
billion to shareholders in the form of stock
“After all the failures of Time Warner 10 buy-backs and dividends.
years ago and 20 years ago [HBO, Turner, However, some fault Bewkes for failing
and Warner Bros.] finally have the experience
to use Time Warner’s strong balance sheet
and shared interest to help each other to take big swings — such as moving more
succeed,” Bewkes says. “We have the brands, aggressively into premium streaming video
we have the money, we have the distribution
via HBO when Netflix was in its infancy, or
platform support, and we have the combining with a broadcast network, or
program supply. We have better access to expanding Warner Bros. through acquisitions.
movies and TV shows than any other company
(WB execs in recent years floated the
probably other than Disney. We can idea of buying DreamWorks Animation
use our scale together, or not, and that and at least one major video game company,
balance is one of the biggest advantages of
to no avail.)
our company.”
Now, as the company’s core businesses
But within entertainment circles, the fight industrywide headwinds, Time Warner
conventional wisdom about Time Warner
is facing the perception that manage-
is different. There is strong sentiment that ment is in caretaker mode until the right
it is long past time for Bewkes to make a buyer comes along. The heightened attention
move to expand the company’s horizons.
to spending, even behind the velvet
Disney and its decade-long buying spree of rope of HBO, has fueled speculation that
blue-chip brands (Pixar, Marvel, Lucasfilm) the objective is to make the books look as
is the standard by which all entertainment good as possible for prospective suitors.
content companies are judged.
All of this sounds plausible — until you
At Time Warner, the recent emphasis on spend five minutes with Bewkes talking
cost containment, stock buy-backs, delivering
about Time Warner’s future. He does not
its promised double-digit earnings sound like a CEO who is focused on his exit
growth, and raising the dividend has signaled
package. He’s engaged in the challenge of
48
to some a lack of ambition. “They navigating the company through
choppy
JUNE 14, 2016 VARIETY.COM
JEFF BEWKES
Time Warner
chairman/CEO
Jeffrey L.
Bewkes joined
what he calls
the “fascinating
platoon” of
HBO in 1979,
working in
sales and marketing.
He rose
through the
finance ranks
to become
president in
1991, and CEO
in 1995. In
2002 he was
called up to the
corporate level
to steady the
ship after the
AOL merger
as president of
Time Warner’s
entertainment
and networks
group. He
was upped to
president in
2006, and CEO
in 2008.
Bewkes
earned a B.A.
from Yale
University and
an MBA from
Stanford Graduate
School of
Business.
waters as the industry sorts through disruption
in the economic structures that
have powered film and TV for decades.
“We’ve spent a long time getting our
company down to a nimble, focused, musthave
group of capabilities that we think
is very well suited to all these evolutions,”
says Bewkes. “First and foremost, in program
development, we think we have the
right people and processes in place to get
breakthrough content made at HBO, Warner
Bros., and Turner. And we think we
have exactly what we need for optimal
positioning in global distribution.”
Bewkes’ streamlining of Time Warner
could make it an attractive takeover target
for a well-heeled suitor seeking enviable
assets at a time when industry observers
believe consolidation among content companies
is poised to accelerate. The notion
of an Apple-Time Warner union was even
briefly considered last year after the two
companies worked closely together on the
launch of the HBO Now broadband service.
The what-if discussion came up in the context
of Apple’s pursuit of its TV channel
bundling and navigation guide initiatives,
but it didn’t advance to the level of Bewkes
or Apple CEO Tim Cook, sources say.
Still, Apple’s interest underscores that
Time Warner is seen as a prime M&A
target, in part because its operations have
been so intensively streamlined. Within
CBS Corp., speculation about what a
Time Warner merger might look like has
increased in the past year, given the natural
fit of the broadcast network with Warner
Bros. and Turner.
Just a month after Time Warner completed
the last piece of Bewkes’ slim-down
campaign (the 2014 spinoff of the Time Inc.
magazine group), 21st Century Fox came
knocking with its $80 billion buyout bid.
Bewkes and his board barely broke a
sweat batting down Rupert Murdoch’s overture
as greatly undervaluing the company.
Fox’s $85-per-share offer set a benchmark
for Time Warner to demonstrate that it
would be more valuable to shareholders
to go it alone. Yet amid the broader market
volatility, Time Warner shares haven’t
closed above $80 since August.
Bewkes shakes his head with a knowing
smile at the suggestion that the company
has faced pressure from major shareholders
to consider new options, such as
a spinoff of HBO. That’s been a source of
chatter in financial and media circles —
but not from actual shareholders, Bewkes
insists, and he meets with them regularly.
“There has been no formal approach,
no demands, which is exactly what we
expected,” he says.