TW preps for Bewkes era


Time Warner paved the way for new leadership this year, with CEO and chairman Richard Parsons increasingly moving out of the spotlight to clear the path for CEO-designate Jeffrey Bewkes, who takes the reins Jan. 1. Management change already occurred during the year at the conglomerate's key HBO unit as longtime chairman and CEO Chris Albrecht was forced to to resign, with Bill Nelson taking over. In a move that put the spotlight on a key asset, first-half 2007 saw Time Warner Cable become a public company. Otherwise, TW management concentrated on further stabilizing the performance of AOL.

Summary and outlook: Time Warner shares lost more ground than most of its peers, falling 21.4% to $16.90 as of Wednesday. Film unit operating profit also was down for the first three quarters. However, TV networks and cable systems profitability rose in the same period, and AOL remains a developing story. In 2008, TW is expected to aggressively rejigger its holdings under Bewkes. TWC, the Time magazine unit and AOL are among the operations believed to be under review. Because of Time Warner's volatile share price, it no longer is a slam dunk that the conglomerate is the world's largest entertainment company. But because of an expected restructuring -- and what might be a stock price near rock bottom -- analysts are warming up to Time Warner as a nice 2008 investment. Its 2008 film slate includes "Harry Potter and the Half-Blood Prince," "Get Smart," "Speed Racer," "10,000 B.C." and "The Dark Knight."

THR rating: $$$ out of 5

Top performers:

Films: Harry Potter and the Order of the Phoenix, 300, Rush Hour 3
DVDs: Happy Feet, 300, The Departed
HBO shows: The Sopranos, Entourage, Big Love/Rome

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