Interesting Times Ahead for Times Warner

December 10, 2007

jeff-bewkes.jpgThe arrival of Jeffery Bewkes as CEO signals interesting times ahead for the under-performing Times Warner giant

Time Warner Inc. (NYSE:TWX) has announced that its Board of Directors has elected Jeffrey L. Bewkes as Chief Executive Officer of Time Warner Inc., effective January 1, 2008.

Mr. Bewkes currently serves as President and Chief Operating Officer, and he will retain the title of President. Mr. Bewkes will succeed Richard D. Parsons as CEO, and Mr. Parsons will remain as Chairman of the Board

The announcement by the head of the appointments committee could serve as a model for communicating a well-executed leadership transition. It indicated

“Today’s decision is the culmination of a thoughtful and disciplined process that began in early 2006, when Dick Parsons initially approached the Board to discuss the timetable for the CEO succession ..”

“Jeff is the right person to be the next CEO of Time Warner, and I couldn’t be more delighted that he will lead this Company into the future,” Mr. Parsons said.

Behind the briefing

So what’s behind the briefing? The story is candidly told by CCN Money’s Jon Friedman, who states that Jeff Bewkes

needs to show the world that Time Warner isn’t merely some bloated, tired symbol of the out-of-breath media industry. He must demonstrate to Wall Street that he is on shareholders’ side.

Friedman further asserts that Parsons took control of Time Warner following a period of chaos.

The AOL-Time Warner combo proved to be an utter disaster; the two factions hated each other and there was no spirit of cooperation. The stock flirted with single digits. By the time Parsons took over, Time Warner had become a corporate punch line, if not a punching bag for the media. A born politician, Parsons stepped in and smoothed the troubled waters by adding the informal title of “chief facilitator.” He sold off some noncore assets, tried to prop up morale at AOL and basked in whatever triumphs the company had, such as the booming properties in its vast film division, including such blockbusters as the Lord of the Rings, Matrix and Harry Potter series.

The New Man

According to Reuters

Jeffrey Bewkes’s ascension to the top executive post at Time Warner Inc, unlike his predecessor’s, surprised no one. His rare combination of financial savvy and knack for managing creative talent made him an obvious choice to succeed Richard Parsons, who was viewed in 2002 as a dark-horse candidate to run a company that controls some of the top brands in media: CNN, People magazine and paid cable network HBO

Bewkes had risen spectacularly within HBO, and has been associated with a string of media triumphs including The Sopranos. This is a view shared by other commentators, who acknowledge the leadership successes of the former No 2

The Shift

The shift, hardly indicated by that smooth press announcement, signals intent to change bigtime.
The master conciliator is succeeded by someone quite different. According to The Wall Street Journal

Mr. Bewkes’s management style is expected to signal a radical shift in Time Warner’s corporate culture. Where Mr. Parsons won over employees with a grandfatherly manner, Mr. Bewkes’s style is more no-nonsense. Mr. Bewkes, who started his Time Warner career at HBO more than 20 years ago, is widely expected to be tougher on the company’s performance, or lack thereof.

From Smooth to Hairy

If Mr. Parsons had a smooth leadership style, it seems that Mr. Bewkes has a more hairy one. Interesting Times ahead for Times Warner …