Time Warner

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AOL Time Warner.
Type Public (NYSE: TWX)
Founded Merger between Time Inc. and Warner Communications (1990)
acquired TBS (1996)
subsequently purchased by AOL (2001)
spun off AOL (2009)
Headquarters New York City, U.S.
Area served Worldwide
Key people Jeffrey L. Bewkes
(Chairman) & (CEO)
Industry Broadcasting, publishing, Internet, telecommunications
Products See list of assets owned by Time Warner.
Revenue ▲ US$ 46.98 billion (2008)[1]
Operating income ▼ US$ -15.95 billion (2008)[1]
Net income ▼ US$ -13.40 billion (2008)[1]
Total assets ▼ US$ 113.89 billion (2008)[1]
Total equity ▼ US$ 42.28 billion (2008)[1]
Employees 86,400 (2008)[2]
Website http://www.timewarner.com
Time Warner Center taken from Central Park

Time Warner (formerly AOL Time Warner) (NYSE: TWX) is the world's largest entertainment conglomerate in terms of revenue (in front of News Corporation and Disney), as well as the world's largest media conglomerate,[3][4][5][6] headquartered in the Time Warner Center in New York City.[7] Formerly two separate companies, Warner Communications, Inc. and Time Inc., (along with the assets of a third company, Turner Broadcasting System, Inc.) form the current Time Warner, with major operations in film, television and publishing. Among its subsidiaries are New Line Cinema, Time Inc., HBO, Turner Broadcasting System, The CW Television Network, TheWB.com, UBU Productions, Warner Bros. Entertainment, Kids' WB, The CW4Kids, Cartoon Network, Boomerang, Hanna-Barbera, Adult Swim, CNN, DC Comics, and Warner Bros. Games.

Contents

[edit] History

[edit] 1976

In 1972, Kinney National Company spun off its non-entertainment assets due to a financial scandal over its parking operations and renamed itself Warner Communications Inc.

It was the parent company for Warner Bros. Pictures and Warner Music Group during the 1970s and 1980s. It also owned DC Comics and Mad, as well as a majority stake in Garden State National Bank (an investment it was ultimately required to sell pursuant to requirements under the Bank Holding Company Act). Warner's initial divestiture efforts led by Garden State CEO Charles A. Agemian were blocked by Garden State board member William A. Conway in 1978; a revised transaction was later completed in 1980.

In 1976, Nolan Bushnell sold his Atari company to Warner Communications for an estimated $28–32 million. Warner made considerable profits (and later losses) with Atari, which it owned from 1976 to 1984. While part of Warner, Atari achieved its greatest success, selling millions of Atari 2600s and computers. At its peak, Atari accounted for a third of Warner's annual income and was the fastest-growing company in the history of the United States at the time.

In 1975, Warner expanded under the guidance of CEO Steve Ross and formed a joint venture with American Express, named Warner-Amex Satellite Entertainment, which held cable channels including MTV (launched 1981), Nickelodeon (launched 1979) and The Movie Channel. Warner bought out American Express's half in 1984, and sold the venture a year later to Viacom, which renamed it MTV Networks.

[edit] 1985

In 1980, Warner purchased The Franklin Mint for about $225 million. The combination was short lived: Warner sold The Franklin Mint in 1985 to American Protection Industries Inc. (API) for $167.5 million. However, Warner retained Franklin Mint’s Eastern Mountain Sports as well as The Franklin Mint Center, which it leased back to API.[8]

In February 1983, Warner expanded their interests to baseball. Under the direction of Ceasar P. Kimmel, executive vice president, bought 48 percent of the Pittsburgh Pirates for $10 million. The company then put up its share for sale in November 1984 following losses of $6 million. The team's elderly majority owner, John W. Galbreath, soon followed suit after learning of Warner's actions.[9]

Turner Broadcasting logo

In 1984, due to the video game crash of 1983, Warner sold the consumer division of Atari to Jack Tramiel. It kept the arcade division and renamed it Atari Games. They sold Atari Games to Namco in 1985, and repurchased it in 1994, renaming it Time-Warner Interactive, until it was sold to Midway Games in 1996. In a long-expected deal, Warner Communications announced on May 11, 1988 they were acquiring Lorimar-Telepictures; the acquisition was finalized on January 12, 1989. The merger of Time Inc. and Warner Communications was announced on March 4, 1989. During the summer of that same year, Paramount Communications (formerly Gulf+Western) launched a $12.2 billion hostile bid to acquire Time, Inc. in an attempt to end a stock-swap merger deal between Time and Warner Communications. This caused Time to raise its bid for Warner to $14.9 Billion in cash and stock. Paramount responded by filing a lawsuit in a Delaware court to block the Time/Warner merger. The court ruled twice in favor of Time, forcing Paramount to drop both the Time acquisition and the lawsuit, and allowing the formation of Time Warner which was completed on January 10, 1990.

[edit] 1990

In early 1990, the combined companies were named Time Warner. This company subsequently acquired Ted Turner's Turner Broadcasting System in October 1996. Not only did this result in the company (in a way) re-entering the basic cable television industry (in regards to nationally available channels), but Warner Bros. also regained the rights to their pre-1950[10][11] film library, which by then had been owned by Turner (the films are still technically held by Turner, but WB is responsible for sales and distribution).

Time Warner had also been owner of the Six Flags Theme Parks chain during the 1990s after near bankruptcy. It sold all Six Flags parks and properties to Oklahoma based Premier Parks on April 1, 1998.

[edit] 2000

In 2000, a new company called AOL Time Warner, with Steve Case as chairman, was created when AOL purchased Time Warner for US$164 billion.[12] The deal, announced on January 10, 2000[13] and officially filed on February 11, 2000,[14] employed a merger structure in which each original company merged into a newly created entity. The Federal Trade Commission cleared the deal on December 14, 2000,[15] and gave final approval on January 11, 2001;[citation needed] the company completed the merger later that day.[16] The deal was approved on the same day by the Federal Communications Commission,[14] and had already been cleared by the European Commission on October 11, 2000.[17] The shareholders of AOL owned 55% of the new company while Time Warner shareholders owned only 45%,[13] thus the smaller AOL bought out the far larger Time Warner.

After the merger, the profitability of the ISP division (America Online) decreased.[citation needed] Meanwhile, the market valuation of similar independent internet companies drastically fell. As a result, the value of the America Online division dropped significantly. This forced a goodwill write-off, causing AOL Time Warner to report a loss of $99 billion in 2002 — at the time, the largest loss ever reported by a company. In 2003, the company dropped the "AOL" from its name, and removed Steve Case as executive chairman in favor of Richard Parsons, with AOL remaining a part of the company. That same year, Time Warner spun off Time-Life's ownership under the legal name Direct Holdings Americas, Inc. Case resigned from the Time Warner board on October 31, 2005.[18]

In 2005, Time Warner was among 53 entities that contributed the maximum of $250,000 to the second inauguration of President George W. Bush.[19][20][21] On December 27, 2007 newly installed Time Warner CEO Jeffrey Bewkes discussed possible plans to spin-off Time Warner Cable and sell-off AOL and Time Inc. This would leave a smaller company made up of Turner Broadcasting, Warner Bros and HBO.[22] On February 28, 2008 co-chairmen and co-CEOs of New Line Cinema Bob Shaye and Michael Lynne announced their resignations from the 40-year-old movie studio in response to Jeffrey Bewkes's demand for cost-cutting measures at the studio, which he intended to dissolve into Warner Bros.

On May 28, 2009, Time Warner announced that it would spin off AOL as a separate independent company, with the change occurring on December 9, 2009.

[edit] Transactions made since the AOL-Time Warner merger

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Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (July 2008)

Since the merger, a number of transactions have taken place:

  • World Championship Wrestling was sold to WWF Entertainment on March 23, 2001 after Jamie Kellner of TBS decided that wrestling was not in the network's best interest.
  • The Atlanta Hawks, Atlanta Thrashers, and operating rights to Philips Arena were sold in mid-2003.
  • The fifty percent share in the cable channel Comedy Central was sold to Viacom.
  • Warner Music Group was sold to a group of investors led by Edgar Bronfman Jr. in March 2004.
  • AOL/Netscape's longrunning litigation against Microsoft was settled out of court.
  • Time Warner announced that it was shutting down its CNNfn financial information channel and disposing of its share in Google (2004).
  • On March 31, 2006 Time Warner sold the Time Warner Book Group to French publisher Hachette Livre, of the Lagardere group.
  • On February 7, 2006, a group led by corporate raider Carl Icahn and Lazard Frères CEO Bruce Wasserstein unveiled a 343-page proposal calling for the breakup of Time Warner into four companies and stock buybacks totaling approximately $20 billion. On February 17, 2006, the Icahn-lead group agreed with Time Warner to not contest the re-election of TW's slate of board members at the 2006 shareholders meeting. In exchange for the Icahn group's cooperation, Time Warner will buy back up to $20 billion of stock, nominate more independent members to the board of directors, cut $1 billion of costs by 2007, and continue discussions with the Icahn group over their proposal, particularly on the future of Time Warner Cable.
  • On February 23, 2006, Turner South, a regional sports and entertainment network in the south, was sold to News Corp's Fox Cable Networks group. The network later became SportSouth.
  • On September 12, 2006, Time Inc. announced that Time4 Media, a group of men's interest magazines including Popular Science and Outdoor Life was to be put up for sale. The sale will include 18 publications (including three parenting-related titles).
  • In the fall of 2006, the Atlanta Braves were sold to Liberty Media in a deal that returned vast amounts of Liberty-owned Time Warner stock back into the company's folds. This sale was made official on May 17, 2007.
  • In the summer of 2008, the Reader's Digest Association sold QSP to Time Warner subsidiary Time Inc. for $110 million.[23]
  • In March 2009, Time Warner Cable was divested from the company in a spin-out.[24]

[edit] The CW Television Network

See also: The CW Television Network

On January 24, 2006, CBS Corporation and Time Warner announced that they were to create a new broadcast network, The CW Television Network. The network officially debuted on September 18, 2006. The network formally debuted on September 20 with the 2 hour premiere of America's Next Top Model.

The network is the result of a merger of The WB Television Network (a Time Warner holding) and UPN (a CBS Corporation holding). CBS Corporation and Time Warner each own 50% of the network. Tribune Broadcasting (previously owned a 25% stake on The WB) and CBS Corporation contributed its stations as new network affiliates, although Time Warner's sole owned TV station (via Turner) Atlanta's WTBS (now WPCH) remains an independent station, competing against CBS-owned CW O&O WUPA.

[edit] Time Inc.

The Time Inc. division publishes approximately 150 titles worldwide. It is the leading magazine publisher in the U.S. and UK, and is understood to be profitable at US$5 billion in annual revenues.[25] As of January 2007, the unit is experiencing downsizing.[26] In January 2007, the Bonnier Magazine Group agreed to acquire 18 magazines that Time Inc. was divesting. The magazines in the package employed 550 people and included Field & Stream, Outdoor Life, Ski, Yachting, and TransWorld Snowboarding, as well as 11 other titles that were part of Time Inc.'s Time4Media Group. Also included were Parenting, and Baby Talk, which were part of the Parenting Group.[27]

[edit] Financials

In 2004, Time Warner's market capitalization was $84 billion. When the AOL-Time Warner merger was announced in January 2000, the combined market capitalization was $280 billion.

For fiscal year 2002 the company reported a $99 billion loss on its income statement [28] because of $100 billion in non-recurring charges, almost all from a writedown of the goodwill (intangible asset) from the merger in 2000. The value of the AOL portion of the company had dropped sharply with the collapse of the Internet boom, in the early 2000s.

On February 4, 2009, Time Warner posted a $16.03 billion loss for the final quarter of 2008, compared with a $1.03 billion profit for the same three months of 2007.[29]

[edit] Commercial properties

Time Warner Inc. owns several large properties in New York City; certain buildings in the Rockefeller Center complex and adjacent office towers house its main offices; one of which houses a CNN news studio. In late 2003, Time Warner finished construction of a new twin-tower complex, designed to serve as additional office space, facing Columbus Circle on the southwestern edge of Central Park. Originally called the AOL Time Warner Center, the 755-foot (230 m), 55-floor mixed-use property was renamed Time Warner Center when the company itself was renamed.

[edit] Board of directors

As of October 29, 2009.

[edit] Senior Executives

[edit] Time Warner Inc.

Jeffrey L. Bewkes, Chairman and CEO of Time Warner Inc.

[edit] Subsidiaries

[edit] Competition

 This article may contain original research. Please improve it by verifying the claims made and adding references. Statements consisting only of original research may be removed. More details may be available on the talk page. (March 2008)

Time Warner faces industry competition from traditional media companies such as CBS Corporation, Viacom and News Corporation. Time Warner's business may be severely impacted by the increasing "piracy" of feature films, television programming and other content which decreases company revenues.[30]

Box office receipts have been rising while the growth rate of DVD sales have recently been declining, which affects Warner Brothers' growth prospects and revenues.[31]

[edit] Past names

  • Time Inc. (1922-1990)
  • Warner Communications (1972-1990)
  • Time Warner (1990-1992, 2003-present)
  • Time Warner Entertainment (1992-2001)
  • AOL Time Warner Inc. (2001-2003)

[edit] See also

New York City portal
Companies portal

[edit] Footnotes

  1. ^ a b c d e Yahoo Fiance
  2. ^ "Company Profile for Time Warner Inc (TWX)". http://zenobank.com/index.php?symbol=TWX&page=quotesearch. Retrieved 2008-09-30. 
  3. ^ http://money.cnn.com/magazines/fortune/global500/2009/industries/145/index.html
  4. ^ http://www.viacom.com/investorrelations/Investor_Relations_Docs/Q407%20Web%20Deck%20FINAL.pdf
  5. ^ http://money.cnn.com/2009/02/09/news/companies/disney_dreamworks.fortune/?postversion=2009020914
  6. ^ News Corporation - Annual Report 2007
  7. ^ TimeWarner.com Fact Sheet Page
  8. ^ Dinger, Ed (1998). "The Franklin Mint". International Directory of Company Histories. 69. http://findarticles.com/p/articles/mi_gx5202/is_1998/ai_n19122709. Retrieved 2008-05-23. 
  9. ^ Galbreaths to Sell Pirates PITTSBURGH, New York Times
  10. ^ You Must Remember This: The Warner Bros. Story (2008), p. 255.
  11. ^ WB retained a pair of features from 1949 that they merely distributed, and all short subjects released on or after September 1, 1948; in addition to all cartoons released in August 1948.
  12. ^ "Top Mergers & Acquisitions (M&A) Deals". 2007-03-28. http://www.manda-institute.org/en/statistics-top-m&a-deals-transactions.htm. Retrieved 2007-05-05. [dead link]
  13. ^ a b "America Online and Time Warner Will Merge to Create World's First Internet-Age Media and Communications Company". Time Warner corporate homepage. 2000-01-10. http://www.timewarner.com/corp/newsroom/pr/0,20812,667602,00.html. Retrieved 2007-05-06. 
  14. ^ a b Federal Communications Commission (2003-03-25). "America Online-Time Warner Merger Page". Federal Communications Commission homepage. http://www.fcc.gov/mb/aoltw/aoltw.html. Retrieved 2007-05-06. 
  15. ^ Federal Trade Commission (2000-12-14). "FTC Approves AOL/Time Warner Merger with Conditions". Federal Trade Commission website. http://ftc.gov/opa/2000/12/aol.shtm. Retrieved 2007-05-06. 
  16. ^ Patrick Ross, Evan Hansen (2001-01-11). "AOL, Time Warner complete merger with FCC blessing". CNET News.com. http://news.cnet.com/2100-1023-250781.html. Retrieved 2007-05-06. 
  17. ^ "EU statement: AOL, Time Warner". BBC News Online. 2000-10-11. http://news.bbc.co.uk/2/hi/business/967049.stm. Retrieved 2007-05-06. 
  18. ^ [1]
  19. ^ Drinkard, Jim (2005-01-17). "Donors get good seats, great access this week". USA Today. http://www.usatoday.com/news/washington/2005-01-16-inauguration-donors_x.htm. Retrieved 2008-05-25. 
  20. ^ "Financing the inauguration". USA Today. http://www.usatoday.com/news/washington/2005-01-16-inaugural-donors_x.htm. Retrieved 2008-05-25. 
  21. ^ "Some question inaugural's multi-million price tag". USA Today. 2005-01-14. http://www.usatoday.com/news/washington/2005-01-14-price_x.htm. Retrieved 2008-05-25. 
  22. ^ Bloomberg.com: Time Warner May End Reign as Largest Media Company
  23. ^ Ali, Rafat. "Time Inc. Strange Buy: Acquiring Reader's Digest School Funding Raising Unit QSP For $110 Million". http://www.washingtonpost.com/wp-dyn/content/article/2008/08/07/AR2008080702430.html. Retrieved 2008-09-03. 
  24. ^ "Time Warner completes cable spin-off". BusinessWeek. http://www.businessweek.com/ap/financialnews/D96TSJHG0.htm. Retrieved 2008-03-14. 
  25. ^ NYPost
  26. ^ "As Time Inc. Cuts Jobs, One Writer on Britney May Have to Do", New York Times, January 15, 2007. Retrieved March 30, 2008.
  27. ^ NY Post
  28. ^ TWX annual statement
  29. ^ Time Warner reports huge loss
  30. ^ Time Warner profile
  31. ^ Recent 10Q Report

[edit] References

  • Triangle Business Journal: Time Warner Cable thinking green with local HQ

[edit] External links

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