Despite corporate raider Carl Icahn’s recent attempt to break up the assets of Time Warner, the company still believes its core businesses will not only remain tops in their sectors — but provide enough synergy to warrant continued inclusion in the corporate fold.
So said Time Warner exec VP-chief financial officer Wayne Pace in describing the near-term goals for each of the main divisions — cable, filmed entertainment, AOL and publishing.
“We were looking at this long before one particular shareholder (meaning Icahn) asked us about it,” Pace said. “All (the different units) have some form of relationship with each other; they all do business with one another, one way or another.”
Recent divestitures have largely been of noncore assets, he pointed out, referring to the book publishing biz and Turner South. Those two sales should bring some $900 million back to the company, he said.
Pace was speaking at the closing session Thursday of Bank of America’s Media, Telecommunications and Entertainment Conference in Gotham.
In the 40-minute rundown, he laid out the goals of each unit for this year, and he managed not to indicate that one sector’s challenge was more crucial or urgent than another’s. After all, each unit, it could be argued, is the top-ranked player in its area.
Speaking of the film biz, he singled out Warner Bros.’ box office performance in 2005 — tops in domestic share when combined with sibling New Line and tops alone in international grosses — and its hopes for three upcoming tentpoles: “Poseidon,” “Superman Returns” and “Happy Feet.”
“Warners is high on all three of these — and they’re pretty good at this stuff,” Pace declared.
On the TV front, he pointed out that Warners had a record 34 series placed in primetime on the Big Six — an early indication of their potential for syndication revenues.
For the cable biz, Pace said the deals with Adelphia and Comcast should come together in the second quarter and would make TW the leader in the top two markets, New York and Los Angeles. He said these were “high return strategic investments.”
As for AOL, Pace said the goals for 2006 are to grow broadband subscriptions and advertising revenues.
Finally, at Time Inc., having 150 titles is simply not enough. Pace said the goal is to develop or extend brands continually. Magazines launched in just the last 15 years — titles like Cooking Lite and Real Simple — now account for 20% of the division’s overall revenues.
As with other media congloms, Wall Street has largely shrugged off the impressive stories in the entertainment biz, convinced apparently that it’s new media where the growth will come.
Time Warner’s stock closed Thursday at $16.85 a share, off its early February high of $18.50 and way off its historic high around $60 five years ago.