Cable spinoff puts conglomerate in plum position

The Masters of the Media Universe have lived through some exasperating moments lately. Sumner must resolve some debt issues. Rupert is irked by a new book about him by Michael Wolff. And Jeffrey …

Well Jeffrey Bewkes is in almost a good mood. To be sure, Bewkes, having now survived his first year as CEO of Time Warner, is not as yet enshrined as a first-name-only mogul. And when he assumed that job, no one had tipped him that economic upheaval was around the corner.

Shares in Time Warner have taken a beating along with those of other media congloms, but the damage hasn’t been as bad as with News Corp. or Viacom. And now Bewkes can look forward to some good news that awaits him in spring ’09 — the $9.25 billion dividend marking the spinoff of his cable assets.

This infusion opens up some interesting options for Time Warner. Bewkes can buy back stock, lift dividends, make some international acquisitions or, even more interesting, make a play for NBC. Bewkes’ possible moves on NBC could obviously change the landscape of the entertainment business. Further, could NBC be dis-entangled from Universal? If Warner Bros. ended up consolidating with Universal, clearly one more buyer in the industry would potentially vanish.

Time Warner has been having some fun in the cable business this year. TNT is making a run with “The Closer,” “Raising the Bar” had a good launch and HBO is getting significantly re-energized. And CNN, of course, relished the presidential election.

Bewkes is a creature of TV, having come up through HBO, but he also is very much a numbers guy, a financial engineer who loves to theorize about the “velocity of money” and “leveraging assets.” Hyper and wiry, highly energized yet congenial, Bewkes managed to survive a succession of corporate debacles involving the likes of Gerry Levin, Ted Turner and Steve Case and, having done so, he is keenly aware of the formidable opportunities that confront him.

Visit Bewkes’ corporate lair and you sense a greater informality and a refreshing openness to debate. In assuming office, Bewkes promised to separate cable and split AOL, which he has done. Long-troubled AOL is itself taking a $850 million gamble on Bebo, the No. 3 social media site, which has been struggling against rival Facebook. He also committed to streamlining film operations, which resulted in the demolition of New Line and most of its 600 employees. Warner Bros. hit the mother lode with the “Dark Knight” and scored unexpectedly with “Sex and the City,” which helped make up for some turkeys along the way.

But now Jeffrey, like Sumner and Rupert, must find new navigational stakes to cope with the worldwide financial collapse — one that Bewkes refuses to dismiss as a mere recession. In his mind some fundamental economic equations have been re-arrayed and redefined, and corporate strategy must be nimble and flexible to deal with them.

The $9 billion will doubtless be a big help.

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