Time Warner's Jeff Bewkes: No HBO Spinoff Plans
"The company now is pretty focused," the exec said on Wednesday
Time Warner CEO Jeff Bewkes said on Wednesday he has no intention of spinning off HBO or offering up a tracking stock for those who would like a more pure-play investment into the popular and profitable premium cable network.
The CEO was shooting down speculation that has arisen since Time Warner rejected an $85 per share bid to be acquired by 21st Century Fox. Some Wall Street analysts have suggested that a transaction involving HBO would be one way of boosting Time Warner shares to that level. On Wednesday, the stock was at $75.93.
"We're not going to do that," Bewkes told a Wall Street analyst who asked about an HBO spinoff or tracking stock. Bewkes was speaking Wednesday at the Goldman Sachs 23rd Annual Communacopia Conference in New York.
"The company now is pretty focused," Bewkes continued. "We've got big scale at Warner Bros. in film and TV, big scale at Turner and basic cable, big scale at HBO, so it's not hard or unclear to look at Time Warner or any of the pieces, so we don't think [HBO] needs any kind of highlighting like that."
Bewkes, in fact, touted Time Warner stock not because of anything related to the potential spinoff of more assets -- the company has already shed AOL, Time Warner Cable and the Time Inc. publishing company -- but because the conglomerate has little exposure to TV advertising, which recently experienced upfront weakness.
"Advertising for us is only about 15 percent of our total revenue and U.S. advertising is only about 13, so if any of you have any worries about a global economic downturn, you should rush out and buy Time Warner," he told the analysts and other conference attendees.
Bewkes also said that DC is "underestimated," given that 10 films based on its stable of superheroes are headed for theaters between 2015-2020 and five DC-related TV shows will be on network television this year.
An analyst also asked Bewkes whether he'd like to take HBO Go directly to the consumer for about $15 a month for anybody with a broadband connection.
"The broadband-only opportunity, up until now, didn't look to us to be really at the point where it would be smart to move the focus," Bewkes said. "Now, the broadband opportunity is getting quite a bit bigger ... so the question you're asking is becoming more viable, more interesting."
He added: "We're seriously considering what is the best way to deal with all this distribution, but I don't have anything to announce about it today."