03/28/2008 02:46 am ET Updated May 25, 2011

Warner Bros Absorbs New Line Cinema

Time Warner Inc said on Thursday it will consolidate its New Line Cinema film studio under Warner Bros. Entertainment.

New Line's Co-Chairmen and Co-CEOs Robert Shaye and Michael Lynne have elected to leave the studio, which will become a unit of Warner Bros., but are in discussions about possible future business relationships with the company, Time Warner said.

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Read Robert Shaye and Michael Lynne's official press release, from which the following is an excerpt:

This afternoon, Time Warner is announcing that New Line will become a unit of Warner Bros. This is, of course, a very difficult and emotional time for all of us who have worked at New Line. While there is not much we can say that can lessen the impact of this announcement, we did want you to know about the decision before you read about it in the press.

New Line will maintain its own identity and will continue to produce, market, and distribute movies. But New Line will now do so as part of Warner Bros. and will probably be a much smaller operation than in the past. Time Warner hopes that operating New Line as a unit of Warner Bros. will allow New Line to focus on the creative side of movie-making, while reducing costs and taking advantage of Warner Bros.' distribution systems. The company will be holding group meeting with New Line employees tomorrow in Los Angeles and New York to discuss this announcement, and is committed to letting employees know as soon as possible about how this change affects them individually.

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Read the Hollywood Reporter's write-up of the consolidation.