Time Warner Chief Jeff Bewkes Dodges Direct Comment on Abandoned Fox Bid
On Wednesday, Time Warner CEO Jeff Bewkes got on the phone with analysts in a highly anticipated second-quarter earnings call. Under normal circumstances, Bewkes could modestly crow about beating Wall Street expectations or tout the company's new $5 billion stock buyback program. On the call, he indeed talked about growth in revenues, operating income and earnings per share. But that's probably not what was on anybody's mind as the company's share price was sinking.
Thanks to Rupert Murdoch's surprising Tuesday announcement of pulling 21st Century Fox's $80 billion acquisition bid of Time Warner, Bewkes' mission was to convince his listeners that the company has a strategic plan for remaining independent in lieu of a marriage creating a $150 billion entertainment behemoth. (If this were a scene from HBO's Game of Thrones, it'd be that one where Stannis Baratheon appears before the Iron Bank of Braavos with pleas of support amid a weakened net worth and the prospect of a distant would-be ruler.)
At the outset, Bewkes was adamant about not discussing the Fox offer except to praise the management team and say, "We are not going to comment except to say that the board and I appreciate the support of our shareholders."
Bewkes preferred to talk about numbers like HBO's double-digit revenue growth, saying that it's "evidence that our strategy is working."
He also cheered Turner's revenue growth, the launch of Cinemax's new series The Knick and a "next generation" of HBO Go, as well as the ability of Warner Bros to create film franchises like The Lego Movie. As for the future, Bewkes says the company has plans to "significantly increase the size of our kids business" and will "mine DC [Comics] catalog across businesses."
Analysts, warned that Bewkes wouldn't be commenting on Fox's offer, softly attempted to get him to address it indirectly nonetheless. One analyst asked him to pin where Time Warner assets were undervalued. Bewkes highlighted the international side, saying there wasn't "full appreciation about what we can do there," as well as consumer products.
Another asked about whether Time Warner has any M&A plans of its own. "We're not lacking something we need," said Bewkes before advising to "look at all sides of the issue when you're contemplating the benefits and risks of putting very large companies together."
Specifically, he mentioned disruptions and regulatory scrutiny.