When Time Warner CEO Jeff Bewkes said on the company's post-earnings conference call three weeks ago that they'd be announcing details on their spinoff of its cable division "very soon," he meant it.

This morning Time Warner revealed how it plans to spin off its 84 percent ownership stake in Time Warner Cable. As part of the deal, the cable company will pay a one-time $10 per-share dividend, which adds up to a $9.25 billion dollar windfall. Bewkes says this infusion will allow Time Warner to return cash to shareholders, invest in its content-focused businesses, or make purchases.

Time Warner Cable--the country's second largest cable company after Comcast

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[CMCSA  Loading...      ()   ]--is making this happen by borrowing $10.9 billion, or $10.27 a share. This news sent TWX

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[TWX  Loading...      ()   ] stock up (as of this posting) while TWC

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[TWC  Loading...      ()   ]stock made gains as well. Investors pleased about the new flexibility this gives both companies to pursue their core businesses.

This is a huge step in Bewkes' strategy of transforming Time Warner into a true content company. Huge. The next step is selling AOL's nuts and bolts business, and perhaps spinning off the entire division. Then, Time Warner will be a true pure-play content creator and distributor with the publishing/magazines division, the cable networks and the movie studio.

When the company isn't bogged down with an ancient-seeming AOL subscription business, it'll be able to focus on creating high quality content and monetizing it by distributing in as many ways as possible.

This more narrow company is an interesting about-face from the synergy-crazed merger-mania phase nearly a decade ago when Time Warner was bought by AOL. A recession and several economic downturns later, "synergy" can sound like a bad word, while monetization is now the hot button issue.

And despite denials, rumors are still swirling that GE

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[GE  Loading...      ()   ] would consider spinning off its entertainment properties--NBC Universal, CNBC's parent. And I'm hearing that Time Warner is considered the front runner to merge with NBC Universal, since other than their movie studios and their cable news channels (CNN and MSNBC) their content properties are almost entirely complimentary.

NBC Universal doesn't have a publishing division. Time Warner doesn't have a broadcast TV network. It's still a ways off, but mark my words, execs at both companies are thinking about it.

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