If all goes as planned with the AT&T merger, Time Warner chief Jeff Bewkes will step down from his post a year or so shy of his 40th anniversary with the company. At the same time, Bewkes expects a big part of his legacy at the combined company to be the senior management team that he’s assembled at HBO, Turner and Warner Bros.
In announcing Time Warner’s $85.4 billion merger with AT&T, Bewkes affirmed Saturday night in a conference call that he will step down from his post as Time Warner CEO after a transitional period. But Bewkes and AT&T chairman-CEO Randall Stephenson gave a strong endorsement to the leadership team at Time Warner’s core divisions.
“We’ve both been very focused in keeping all the Time Warner executives going forward for the long term,” Bewkes said. “I expect all of our creative and business executives to go on for many years.”
Stephenson added emphasis to Bewkes’ assertion. “I made it clear to Jeff that the talent he has assembled is a really important part of this deal. It’s really critical to make sure the continuity of the team” at Time Warner remains in place, Stephenson said.
Bewkes, 64, is expected to stay at the helm for at least another year while the deal goes through what is sure to be a rigorous regulatory review, and probably for a transitional period after that.
“I’m planning to do this as long as (I) can help the company,” Bewkes said. Keeping the Time Warner boss on board for a transitional period is important to Stephenson. “I really value Jeff — he’s a big part of this deal,” he said.
With AT&T and Time Warner coming together, there was instant speculation that Peter Chernin will eventually play a role in the entertainment side of combined company. Chernin, the former News Corp. COO, has become close to Stephenson through the Otter Media joint venture that AT&T and Chernin Group set to develop and invest in digital ventures. It’s no secret that Chernin was an important, if informal, advisor to Stephenson as the AT&T-Time Warner negotiations gained steam.
But Stephenson downplayed talk of Chernin being poised to hop into an executive position. “I don’t have any idea what Peter’s plans are in this regard,” he said. “I think Peter’s got his hands full right now.”
For Bewkes, the AT&T deal is a bet that he will leave the company in good hands — and in much better shape than when he was first summoned to a Time Warner corporate role amid the fallout from the AOL merger.
Bewkes joined HBO in its finance department in 1979. He’s seen the company that was once Time Inc. transformed by mergers along the way: the 1990 union with Warner Bros., the 1995 deal with Turner Broadcasting and the 2000 pact with AOL.
In typically understated fashion Bewkes called the AOL merger a “misstep” on Saturday. He’s spent the past 15 years working to help the company recover from the deal that yielded a staggering $99 billion write-down just two years after AOL and Time Warner came together.
Bewkes had climbed the ranks to the top job as president-CEO of HBO when he was enlisted to help right the listing AOL-Time Warner ship in 2002. He was upped to president and COO of Time Warner in January 2006 and elevated to CEO in January 2008.
Bewkes has long been one of media’s most highly regarded CEOs for his financial acumen and strategic discipline. He’s been clear for most of the past decade in his desire to streamline Time Warner into a company dedicated to film, TV and digital content creation. That led to the spinoffs of Time Warner Cable and AOL in 2009 and the Time Inc. publications in 2014. The laser focus on content and quality, not quantity, in Turner’s channel portfolio made Time Warner the belle of the M&A ball as the latest round of industry consolidation heats up.
The AT&T agreement values Time Warner at $107.50 a share, to be paid in a 50-50 split of cash and stock. That’s a lucrative deal for Time Warner shareholders by any measure. Assuming it closes, Bewkes looks savvy for rebuffing the $85 a share offer fielded by 21st Century Fox two years ago.
Bewkes’ comments regarding the post-merger management plan indicate that keeping his team intact was a consideration for the Time Warner board, which voted unanimously for the merger on Saturday. That would have been a taller order had the company been taken over by Fox or another showbiz entity with overlapping film and TV assets.
“We’re feeling very positive about this,” Bewkes said. “There’s a lot of excitement at our company.”