CHICAGO — In a surprise move, Time Warner named chief finance officer Richard Bressler to the newly created position of chairman/CEO of Time Warner Digital Media Tuesday.
He will be responsible for knitting together the entertainment giant’s Internet initiatives into a coherent strategy for the first time.
The appointment not only highlights chairman Gerald Levin’s desire to make digital technology central to TW’s future, but indicates how Bressler’s star has risen since he became CFO four years ago.
Levin and major shareholders credit the Bressler, 41, with the dramatic turnaround in TW finances in recent years, which has sent the company’s stock price rocketing. This new job gives him operating experience for the first time, positioning him for a more senior role in the company longer term, Levin acknowledged Tuesday.
The appointment also answers a need, analysts said, for better coordination of TW’s Internet strategies.
“Having each division run their own little thing doesn’t maximize the value for the parent company,” said one analyst Tuesday. TW stock jumped $4.06 to $66.69 Tuesday, amid a rally among cable stocks.
Speaking in Chicago at the National Cable Television Association annual meeting, Levin said Bressler’s appointment was a sign that “we are going to run the company now with a digital override on almost everything we do. To place one of our top three executives shows how important I think the digital future of the company is.”
Levin noted in a statement on Bressler’s appointment that digital media is “Time Warner’s single most important growth area.”
Bressler’s main job will be responsibility for “the rollout and management of Time Warner’s vertical Internet hubs, the creation of a company-wide e-commerce infrastructure to support them and the further development and implementation of the company’s Internet strategy.”
TW recently announced the “hubs,” which cluster the online assets of its divisional businesses into Internet content areas like business, news, sports, lifestyle and entertainment. The execs in charge of the hubs will report to Bressler.
Bressler will also oversee TW’s stake in its Internet access provider Road Runner and be responsible for expanding Columbia House’s online music retail business.
He won’t, however, have control over digital strategies to be adopted at either Warner Music Group or Warner Bros., the two parts of TW business likely to be most affected by digital technologies emerging on the Internet. Downloading music from the Internet, for instance, is expected to eventually make conventional music distribution redundant.
Bressler will “work with Time Warner’s divisions to bring focus to the company’s diverse media businesses, including Time Warner’s interests in digital cable, digital music and DVD,” Time Warner said in a statement.
“You would never separate out a decision you make in terms of technology from the asset base,” Bressler said, adding that he will work with people like Warner Bros/Warner Music chairmen Bob Daly and Terry Semel on their digital strategies. But fundamental decisions about the digital parts of the business would be made by Levin.
Lehman Bros. analyst Larry Petrella said Tuesday that “there has been some questions about whether Time Warner has taken full advantage” of its assets in the “digital universe.”
“Richard Bressler has worked with all parts of the company and is well respected by the Street so he is in a position to put it all together,” Petrella added.
Capital Group VP Gordon Crawford, one of the most influential money managers in the entertainment industry, said Bressler had done a “spectacular job” as CFO. “He was the guy that marshaled all the troops to change the way that people were compensated, to get people to look at return on assets and send cash back to the parent company, to introduce five-year budgets.”
Levin said Bressler had been “extremely successful as the CFO of the company…so we are taking an executive at the top of his game and giving him the opportunity to work in a new way.”
Bressler will start his new job on July 15, when his replacement as CFO is named. Levin said that given that short time frame, “you can draw the inference” it would be an internal promotion.
In his new job, Bressler will be assisted by Michael Pepe who has been running TW’s electronic commerce business and who will be president and chief operating officer of Time Warner Digital Media.
Bressler said he would probably hire extra staff for his new group as well as draw upon TW’s existing resources.