Time Warner's new CEO Jeff Bewkes just showed Wall Street that he means business about cost cutting and getting the company on track. He just made his first big move: consolidating Time Warner's New Line studio into its separate and larger Warner Bros.
This move will make New York-based New Line, responsible for the "Lord of the Rings" and "Austin Powers" trilogies, a division of Burbank-based Warner Bros.
Bewkes said, "New Line has built a strong franchise of cutting-edge entertainment," referring to its combination of more independent-style films, like "Be Kind Rewind," now in theaters, and big franchises like "Rush Hour" and now the upcoming two Hobbit films.
"We can enhance its value by combining it with Warner Bros. Given the trend toward fewer movie releases, New Line and Warner Bros. will now have more complementary release slates, with New Line focusing on genres that have been its strength,'' the CEO added.
This certainly means some layoffs, as well as millions of dollars of cost savings. Now Warner Bros. will handle the marketing for New Line films. And because New Line didn't have a significant foreign distribution business, now, instead of having to sell off the non-U.S. rights to its films, it'll distribute internationally through Warner Bros.
Robert Shaye and Michael Lynne, New Line's co-CEOs and co-chairman, have "elected to leave the studio" according to a Time Warner statement. You can guess what that means. But they apparently haven't left on bad terms: they're in talks for some sort of a deal.
I'm waiting to hear some estimates of how many millions this will save Time Warner. And now that Bewkes has shown how fast he can move, what's next? Untangling Time Warner's cable assets? Fixing AOL, or selling off parts of it?
A Bit of Crowing
Id like to point out that I predicted that this would happen in my Eight Predictions for '08. I knew it! See prediction number 3.
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