03/28/2008 02:45 am ET Updated May 25, 2011

New Line Faces Shutdown

New Line Cinema, the studio behind the "Lord of the Rings" trilogy, has spent the best part of a decade fiercely protecting its turf within Time Warner Inc. Now, barely a month into his new job, Time Warner Chief Executive Jeff Bewkes is looking to dismantle one of the company's longest-standing fiefdoms.

Moving swiftly to streamline Time Warner's movie business, Mr. Bewkes has flagged New Line as an immediate target for cost-cutting, forcing the studio to confront the scenario it has always fought against: being folded into Time Warner's main movie division, Warner Bros. Entertainment.

Taking away New Line's autonomy raises questions about the future of Co-Chairmen Robert Shaye and Michael Lynne, two Hollywood veterans who have long been the core of the studio. After hitting the jackpot with the "Rings" movies, the duo has been on a lengthy cold streak, and their attempt last year to launch a new franchise with "The Golden Compass" fell flat.

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