No Time for NBC Universal

Bewkes: TW doesn't need to make move on rival

NEW YORK -- Time Warner's core content business will grow operating income before interest, depreciation and amortization well above the mid-single-digit percentage range starting next year, CEO Jeffrey Bewkes said.

Speaking at the Sanford C. Bernstein Strategic Decisions Conference, Bewkes also signaled little interest in buying NBC Universal if it came up for sale and said TW's Turner cable networks are not seeing the drag Viacom CEO Philippe Dauman reported in auto and other key ad categories amid a weak U.S. economy. The Turner networks "probably have less exposure" to such hurting ad categories, even though "we could have some future slowdown in scatter," he said.

Bewkes also wouldn't rule out a possible future sale of TW's stake in the CW network, which it jointly owns with CBS Corp.

The CEO spent time Friday providing more color on his recent suggestion that the Street is underestimating the core content divisions' potential, expressing hope that TW's "undervalued" stock will reflect more of the strength in content after the spinoff of TW Cable, which is expected in the fourth quarter.

Asked by Bernstein analyst Michael Nathanson about mid-single-digit gain estimates by many for the content business, Bewkes didn't provide specific guidance but signaled much more bullishness. "We're going to do considerably higher than that starting next year," he replied.

Among key drivers of growth at the TW content divisions are broader international and digital distribution, according to Bewkes.

Although the film unit hasn't seen much growth, it has made more than $1 billion for five straight years and brought in strong cash flow and earnings, he emphasized, adding that performance will benefit from the recent restructurings of New Line and other arms of the TW film operation.

Asked about possible acquisitions once TW gets $9.25 billion in the TW Cable spinoff this year, Bewkes said it is unlikely that many acquisitions will provide better returns than giving money back to shareholders via dividends or stock buybacks.

Asked about network buys amid the auction of the Weather Channel and recent suggestions that TW could buy NBC Universal down the line, Bewkes said: "We don't need to own anything (else)." In a clear reference to NBC Uni, he highlighted that some network deals would come with TV stations and other added assets. "Those are some big risk questions to assess," he argued in a sign he wouldn't care to own all of NBC Uni.

The CEO chided other companies for shelling out too much for assets.
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