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Jeff Bewkes on Fox-Time Warner Merger: ‘We’re Not Lacking Something’

Jeff Bewkes and Time Warner’s management tried valiantly to avoid mentioning a certain media mega-merger that wasn’t on Wednesday’s quarterly earnings call. But oh those pesky analysts and their questions.

Despite beginning his report to investors by saying that he would not address 21st Century Fox’s failed $80 billion bid for the company behind Warner Bros. and HBO, Bewkes found himself defending Time Warner’s contention that going it alone is the best approach in a fractured media landscape where cable providers and digital distributors wield enormous clout.

“You have to look at all sides of the issue when you’re contemplating the benefits and risks of putting very large companies together,” said Bewkes, noting that there were regulatory hurdles and lost business opportunities associated with a merger the size of a Fox and Time Warner deal.

“We have leading scale in all of our businesses,” the Time Warner chairman and CEO added. “We’re not lacking something that we need.”

Fox withdrew its bid on Tuesday, saying in a statement that Time Warner’s management and board “refused to engage with us to explore an offer which was highly compelling.” That sent Time Warner’s stock plunging more than 12% in early morning trading despite the company’s better-than-expected quarterly earnings results.

Grilled by analysts about opportunities for future growth, Bewkes remained “stay the course” in his talking points. He said that he believes there are a number of ways that Time Warner can expand its film and television businesses, mentioning that the company’s DC Comics assets haven’t been fully exploited from a consumer products standpoint.

On the television front, he said Turner will focus more intently on children’s programming, and argued that the growth of connected devices have put a premium on the kind of high-quality content produced by HBO. He said the premium channel’s HBO Go service could be used to build out an online hub for videos from its other media divisions and other companies’ television channels. To that end, he said HBO was working with “top talent, software developers in Seattle” to improve the offering.

The media chief said the company will share more about its long-term plans during an investor event this fall. Bewkes said its most recent earnings report, which saw profits trump analysts’ estimates, was “just the beginning” and was “evidence our strategy is working.”

As a salve to investors disappointed that merger talks are over before ever heating up, Time Warner announced that it has board approval for $5 billion in share repurchases.

After the call, shares of Time Warner began to make up some of the ground lost during over-night and early morning trading. Damage controlled?

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