Nearly nine months into his gestational period as chief executive of Time Warner, company loyalist Jeffrey Bewkes is hoping to deliver a media behemoth reborn. The 56-year-old Bewkes--a three-decade veteran who started out at the fledgling HBO (which he eventually steered to critical raves and record profits) and next year will add chairman to his title--has the task of fixing a company that still suffers from its legendarily disastrous merger with AOL.
This week he's on a public campaign to accentuate the positive. Bewkes is trying to convince skeptics on Wall Street--who have kept Time Warner's battered stock price flattened at around $14, even worse than the already-anemic valuation that greeted Bewkes when he took the top job--that he's taking the bold steps necessary to turn things around at the world's biggest media conglomerate.
On Monday afternoon, as the Dow Jones plunged more than 500 points, Bewkes gave an exclusive interview to Portfolio.com, explaining his moves of the last eight months--splitting off Time Warner Cable into a separate distribution company, acquiring the social network Bebo for a whopping $850 million, shutting down New Line Cinema, and reducing corporate overhead, among other things--and outlining his vision of Time Warner's bright future as the world's leading media and entertainment supplier.
L.G.: What about NBC Universal?
J.B.: Well, that's just a speculation.
L.G.: It is. I just wondered if you're intrigued by that.
J.B.: You know, intrigued, do we have to use that word?
L.G.: No. Any word you want!
J.B.: Look, everyone speculates about what will happen to all of these media companies, and there's a fair amount of speculation as to whether G.E. will decide that the NBC Universal company benefits from being inside G.E. or not. To the extent it decides it doesn't, then they have to think of what to do with it. People leap to the idea, probably wrongly, as they say to sell it. That's not necessarily the case.
L.G.: Well, they keep saying, they won't.
J.B.: I know. If they did, they have a taxable sale or something, so I don't want to prejudge them, but they have to decide what's in their interest. But if they decided not to sell it, they may decide to spin it off, who knows? Anything that comes up, this is true of all the usual suspects, whether it's Scripps or NBC or Discovery, names come up in every sector we're in, and they ask, are we interested in it? Well, I would go back to what we just said.
L.G.: "They" being the kibitzers?
J.B.: Reporters, analysts, investors, everybody. We already said that we have kind of an obligation to look at anything that is out there that, if combined with our company, would produce a clear return for our shareholders. The problem with those speculations is that no one ever knows the price at which any of these things would be available. And we're kind of a big media company--at the lead if not the lead in most of the markets, from movie production, TV production, networks, magazine publishing. So if something comes up in one of those, we are an obvious candidate to consolidate and operate those businesses. We'd have to look at all of them, we will look at all things that happen. That does not mean we'll do them. It just means we'll have to look at them and see if they're available and they're things we think we could operate--and if we could, with a high degree of confidence, operate them at a return that exceeds the price of whichever method it would take to acquire them. We don't set out with a need or a predisposition to acquire them. We have kind of a responsibility to look at.
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