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Time Warner

From dKosopedia

Time Warner Inc. or TimeWarner (AOL Time Warner Inc. from 2001–2003) is a large American media conglomerate with major Internet, publishing, film, telecommunications and television divisions. The company is headquartered in New York City.


Contents

History

Warner Communications was established in 1972 when Kinney National Company spun off its non-entertainment assets, due to a financial scandal over its parking operations.

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). 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. Warner made (and later lost) considerable profits with Atari, which it owned from 1976 to 1984.

In the 1970s, 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, Nickelodeon and Showtime. Warner bought out American Express's half in 1984, and sold the venture a year later to Viacom, which renamed it MTV Networks.

In 1987, it was announced that Warner Communications and Time Inc. were to merge. The last thing Warner did before the merger closed in 1989 was to buy out Lorimar-Telepictures. In early 1990, the combined companies were named Time Warner. This company subsequently acquired Ted Turner's Turner Broadcasting System in October 1996.

Time Warner had also been owner of the Six Flags Theme Parks chain since the 1980's. It sold all Six Flags parks and properties to Oklahoma based Premier Parks on April 1st, 1998. Some theme park insiders argue that Six Flags was much better off under Time Warner ownership.

America Online merger

Image:Aoltw.jpg
2001 AOL Time Warner logo

In 2001, a new company called AOL Time Warner was created when AOL purchased Time Warner. The deal, announced in 2000, employed an unusual merger structure in which each original company merged into a newly created entity. The Federal Trade Commission approved the deal on December 14, 2000. It was then subject to a public comment period of 30 days, until January 16, 2001.

There has been some speculation about the motivations of each party. Some observers believed that Time Warner was struggling to integrate "new media" into its business. A merger with AOL provided a huge subscriber base of Internet users, along with online marketing know-how. Many business journalists have reported that AOL executives felt that AOL stock was severely overvalued and that a big merger was the only way to prevent a collapse in valuation. The merger faced immediate opposition by consumer groups and other media companies on antitrust grounds.

Media companies felt that the vertically integrated AOL Time Warner would unfairly promote its own content within its outlets. This fear existed before the merger, but Time Warner was thought to be a conglomeration of very independent divisions. It was feared that this would change with the influence of AOL executives.

Consumer advocates were concerned with the threat of product tying between Time Warner's cable TV systems and AOL's Internet service. Some consumer groups saw a possible attempt to corner the Internet-over-TV market, whereby AOL could force all of the Time Warner cable subscribers to use AOL branded Internet-TV. Smaller internet service providers feared that AOL would tie its Internet service to Time Warner's cable modem service. Some ISPs wanted the opportunity to use Time Warner's cable network as a common carrier for their services, which competed with AOL. AOL and Time Warner pledged not to violate any antitrust regulations.

Many observers were shocked that a large, diversified media conglomerate was being acquired by a much smaller company. Market conditions at the time of the merger placed a greater premium on Internet-related stocks than on traditional media stocks. AOL's high market capitalization relative to that of Time Warner made the acquisition possible. The deal has since become a symbol of the Dot com bubble and is widely regarded as a disaster, with a $2.4 billion shareholder settlement, a further $600 million set aside and a $5 billion price boosting share buyback program announced on August 3 2005.

AOL CEO Steve Case became executive chairman of the new company, while Time Warner CEO Gerald Levin retained the CEO title.

Post-merger

After the merger, the profitabilty of the ISP division (America Online) decreased. Meanwhile, the market valuation of similar independent internet companies fell dramatically. As a result, the value of the America Online division dropped significantly. This forced a goodwill write down, 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 response to the huge loss in 2002, the company dropped the "AOL" from its name, and removed Steve Case as executive chairman in favor of Richard Parsons. Case resigned from the Time Warner board on October 31, 2005.[1]

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

The CW Television Network

Image:The CW.svg
The CW, which debuted on September 18, 2006, Time Warner, the Tribune Company (which owned The WB Television Network), and CBS Corporation (which owns UPN) will partner with The CW Television Network, although CBS and Time Warner will each own 50% of the network, and Tribune and CBS will have its stations become the network's affliates.

Services

Time Warner Cable has since expanded and offers the following services:

Businesses

The following enterprises are part of Time Warner:

Time Warner also owns several other television channels and magazines, including CNN Headline News and Entertainment Weekly, as well as Timelife books and music.

Financials

In 2004, Time Warner's market capitalization was $84 billion (2004). 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 ([2]) 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.)

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, 55-floor mixed-use property was renamed Time Warner Center when the company itself was renamed.

Board of directors

As of July 2006.

Senior Executives

Time Warner Inc.

Richard D. Parsons, Chairman/CEO of Time Warner Inc.
Wayne Pace, CFO of Time Warner Inc.
Jeffrey L. Bewkes, President/COO of Time Warner Inc.

Subsidiaries

Jonathan Miller, Chairman and Chief Executive Officer of AOL LLC
Glenn A. Britt, President and CEO of Time Warner Cable
Barry M. Meyer, Chairman and CEO of Warner Bros. Entertainment Inc.
Chris Albrecht, Chairman and CEO of Home Box Office
Philip I. Kent, Chairman and CEO of Turner Broadcasting System
Ann S. Moore, Chairman and CEO of Time Inc.
Robert K. Shaye, Co-Chairman and Co-CEO of New Line Cinema
Michael Lynne, Co-Chairman and Co-CEO of New Line Cinema

See also

External links

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Time Warner"

Retrieved from "http://localhost../../../t/i/m/Time_Warner_b84a.html"

This page was last modified 01:11, 4 October 2006 by dKosopedia user Lestatdelc. Content is available under the terms of the GNU Free Documentation License.


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