Why Jeff Bewkes Really Wants to Sell Time Warner
This story first appeared in the Aug. 1 issue of The Hollywood Reporter magazine.
All the talk that Rupert Murdoch is determined to buy Time Warner might have slightly obscured the feeling among many who know Time Warner CEO Jeff Bewkes that Bewkes is equally determined to sell.
That's also the conclusion of others who have merely observed Bewkes' behavior in recent years. "There's no other way to interpret it," says a senior industry executive, referring to Bewkes' seemingly steady march to make Time Warner an attractive target as he pared away AOL, then Time Warner Cable and finally the Time Inc. magazine division in June.
But if so, Bewkes, 62, wants to sell on terms that he controls, as is suggested by the company's controversial move July 21 to prevent investors from calling a shareholders' meeting. That action staves off pressure on management to entertain a sweetened bid from Murdoch — should it not be sweet enough for Bewkes' taste.
If Bewkes sold at the original $85 per share that Fox offered, he'd reap more than $79 million, not counting millions from stock he owns. But he can do better. "He has to set it up to $100 million-plus," says one observer.
Some on the Warner Bros. lot are starting to feel that, like it or not, a deal with 21st Century Fox is inevitable. One top exec says anxieties grew as it took Warners CEO Kevin Tsujihara a bit of time to send out the obligatory all-staff email to reassure the troops. The story of the Murdoch bid broke the morning of July 16. Tsujihara sent out a message at 4:30 p.m. the following day.
Noting that his colleagues had been given what he called "a chance to absorb" the news, Tsujihara wrote that the Time Warner board "has expressed confidence in both our strategy and our ability to execute on it." He urged staff to "stay focused" and prove to the board and senior management that "their trust is not misplaced."
But a Warners insider says the only thing that seems certain is that this battle will be a distraction for the company. This person doesn't see it as inevitable that Murdoch will prevail but knows the company is now in play. He is among those hoping for what he calls a "sexier" buyer — a digital giant like Google or Apple, or pretty much any entity that doesn't already have a thriving television and movie studio that would be subsumed into the Murdoch empire.
To some company veterans, the Murdochs are barbarians at Time Warner's gates. "We wouldn't be surprised should Fox come in with a different offer — either in price or in structure or both," says Wells Fargo analyst Marci Ryvicker.
The buyer who probably would most like to be in the game but isn't is CBS, whose CEO Leslie Moonves came from Warner Bros. Television. "I was hoping it would be us," sighed a network executive after the news of the Murdoch bid broke. Says another insider: "The company that would be put together between CBS and Time Warner would be an elegant, beautiful thing." But Moonves is hamstrung because his company continues to be controlled by Sumner Redstone, 91, who is not disposed to buy or sell.
It seems fair to assume that Viacom CEO Philippe Dauman — seemingly as much a would-be seller as Moonves would like to be a buyer — is equally frustrated to be on the sidelines. At 83, Murdoch is not even 10 years younger than Redstone, but there's a world of difference. As one associate acknowledges ruefully, "Sumner is not the guy who would have dove in a few years ago." Regardless, Rich Greenfield of BTIG believes Fox will be the buyer: "You're going to see this deal consummate. It's just a question of price and timing."