Time Warner, Inc. history, profile and corporate video
Time Warner, Inc. is a media and entertainment company. The company classifies its businesses into three reporting segments: Networks, Filmed Entertainment and Publishing. The Networks segment consists of Turner Broadcasting System, Inc. and Home Box Office, Inc. Turner operates domestic and international networks, including such recognized brands as TNT, TBS, truTV, CNN and Cartoon Network, which are major advertising-supported television networks. Turner networks generate revenues principally from providing programming to affiliates that have contracted to receive and distribute this programming and from the sale of advertising. It also operates various websites, including CartoonNetwork.com, CNN.com, NASCAR.com and NCAA.com that generate revenues principally from the sale of advertising. Home Box Office operates the HBO and Cinemax multi-channel premium pay television services. Home Box Office generates revenues principally from providing programming to affiliates that have contracted to receive and distribute such programming to its customers who choose to subscribe to the HBO or Cinemax services. The Filmed Entertainment segment consists of businesses managed by the Warner Bros, which principally produces and distributes theatrical motion pictures as well as television shows and videogames. This segment’s theatrical product revenues are generated principally through rentals from theatrical exhibition of films and subsequently through licensing fees received for the distribution of films on television networks and pay television programming services. This segment also generates revenues for both its theatrical and television product through home video distribution on DVD and Blu-ray Discs and in various digital formats. In addition, the company also generates revenues through the development and distribution of videogames. The Publishing segment consists principally of Time, Inc.’s magazine publishing and related websites, book publishing, marketing services and other marketing businesses. This segment generates revenues primarily from the sale of advertising, magazine subscriptions and newsstand sales. Time Warner was founded on January 10, 1990 and is headquartered in New York, NY.“
“Time Warner History
1920s
Time magazine made its debut in 1923 as the first weekly news magazine in the United States. Four years later, in 1927, Warner Bros. released the world’s first feature-lengthtalking picture, The Jazz Singer.
1960s
In 1963, recommendations from Time Inc. based on how it delivered magazines led to the introduction of ZIP codes by the United States Post Office.
1970s
In 1972, Kinney National Company spun off its non-entertainment assets due to a financial scandal over its parking operations and renamed itself Warner Communications Inc.
It was the holding company for Warner Bros. Pictures and Warner Music Group during the 1970s and 1980s. It also owned DC Comics and Mad, as well as a majority stake inGarden State National Bank (an investment it was ultimately required to sell pursuant to requirements under the Bank Holding Company Act). Warner’s initial divestiture efforts led by Garden State CEO Charles A. Agemian were blocked by Garden State board member William A. Conway in 1978; a revised transaction was later completed in 1980.
In 1975, Home Box Office became the first TV network to broadcast nationally via satellite, debuting with the Muhammad Ali and Joe Frazier “Thrilla in Manila” boxing match.
In 1975, Warner expanded under the guidance of CEO Steve Ross and formed a joint venture with American Express, named Warner-Amex Satellite Entertainment, which held cable channels including MTV (launched 1981), Nickelodeon (launched 1979) and The Movie Channel. Warner bought out American Express’s half in 1984, and sold the venture a year later to Viacom, which renamed it MTV Networks.
In 1976, the Turner–owned WTCG originated the “superstation” concept, transmitting via satellite to cable systems nationwide and pioneering the basic cable business model. WTCG was renamed WTBS in 1979.
In 1976, Nolan Bushnell sold Atari, Inc. to Warner Communications for an estimated $2–12 million. Warner made considerable profits (and later losses) with Atari, which it owned from 1976 to 1984. While part of Warner, Atari achieved its greatest success, selling millions of Atari 2600s and computers. At its peak, Atari accounted for a third of Warner’s annual income and was the fastest-growing company in the history of the United States at the time.
1980s
In 1980, Warner purchased The Franklin Mint for about $225 million. The combination was short lived: Warner sold The Franklin Mint in 1985 to American Protection Industries Inc. (API) for $167.5 million. However, Warner retained Franklin Mint’s Eastern Mountain Sports as well as The Franklin Mint Center, which it leased back to API.
In 1980, Turner launched CNN, the first 24-hour all-news network, redefining the way the world received breaking news.
In January 1983, Warner expanded their interests to baseball. Under the direction of Caesar P. Kimmel, executive vice president, bought 48 percent of the Pittsburgh Pirates for $10 million. The company then put up its share for sale in November 1984 following losses of $6 million due to its failed attempt to launch a cable sports package. The team’s majority owner, John W. Galbreath, soon followed suit after learning of Warner’s actions. Both Galbreath and Warner sold the Pirates to local investors in March, 1986.
In 1984, due to major losses spurred by subsidiary Atari Inc.’s losses, Warner sold Atari Inc.’s Consumer Division assets to Jack Tramiel. It kept the rest of the company and named it Atari Games, eventually reducing it to just the Coin Division. They sold Atari Games to Namco in 1985, and repurchased it in 1992, renaming it Time-Warner Interactive, until it was sold to Midway Games in 1996. In a long-expected deal, Warner Communications announced on May 11, 1988, they were acquiring Lorimar-Telepictures; the acquisition was finalized on January 12, 1989.
The merger of Time Inc. and Warner Communications was announced on March 4, 1989.During the summer of that same year, Paramount Communications (formerlyGulf+Western) launched a $12.2 billion hostile bid to acquire Time, Inc. in an attempt to end a stock-swap merger deal between Time and Warner Communications. This caused Time to raise its bid for Warner to $14.9 Billion in cash and stock. Paramount responded by filing a lawsuit in a Delaware court to block the Time/Warner merger. The court ruled twice in favor of Time, forcing Paramount to drop both the Time acquisition and the lawsuit, and allowing the formation of the two companies’ merger which was completed on January 10, 1990. However, instead of the companies becoming defunct, the impact of the merger and its resultant financial shock wave gave off a new corporate structure, resulting in the new company being called “Time Warner”.
1990s
Time Warner subsequently acquired Ted Turner’s Turner Broadcasting System in October 1996. Not only did this result in the company (in a way) re-entering the basic cable television industry (in regards to nationally available channels), but Warner Bros. also regained the rights to their pre-1950 film library, which by then had been owned by Turner (the films are still technically held by Turner, but WB is responsible for sales and distribution).
Time Warner purchased Six Flags Theme Parks chain in 1993. The company later sold all Six Flags parks and properties to Oklahoma based Premier Parks on April 1, 1998.
Dick Parsons, already a director on the board since 1991, was hired as Time Warner president in 1995, although the division operational heads continued to report directly to Chairman and CEO Gerald Levin.
In 1991, HBO and Cinemax became the first premium pay services to offer multiplexing to cable customers, with companion channels supplementing the main networks.
In 1993 HBO became the world’s first digitally transmitted television service.
In 1995 CNN introduced CNN.com which later became a leading destination for global digital news, both online and mobile.
In 1996, Warner Bros. spearheaded the introduction of the DVD, which rapidly replaced VHS tapes as the standard for home video.
In 1999, HBO became the first national cable TV network to broadcast a high–definition version of its channel.
2000s
AOL Time Warner merger
In 2000, AOL purchased Time Warner for US$164 billion. The deal, announced on January 10, 2000 and officially filed on February 11, 2000, employed a merger structure in which each original company merged into a newly created entity. The Federal Trade Commission cleared the deal on December 14, 2000, and gave final approval on January 11, 2001; the company completed the merger later that day. The deal was approved on the same day by the Federal Communications Commission, and had already been cleared by the European Commission on October 11, 2000. Due to the larger market capitalization of AOL, they would own 55% of the new company while Time Warner shareholders owned only 45%, so in actual practice AOL had acquired Time Warner, even though Time Warner had far less assets and revenues.
The 2001 AOL merger was ‘the biggest mistake in corporate history’, believes Time Warner chief Jeff Bewkes.
AOL Time Warner, Inc., as the company was then called, was supposed to be a merger of equals with top executives from both sides. Gerald Levin, who had served as CEO of Time Warner, was CEO of the new company. Steve Case served as Executive Chairman of the board of directors, Robert W. Pittman (President and COO of AOL) and Dick Parsons (President of Time Warner) served as Co-Chief Operating Officers, and J. Michael Kelly (the CFO from AOL) became the Chief Financial Officer.
According to AOL President and COO Bob Pittman, the slow-moving Time Warner would now take off at Internet speed, accelerated by AOL: “All you need to do is put a catalyst to [Time Warner], and in a short period, you can alter the growth rate. The growth rate will be like an Internet company.” When the AOL Time Warner deal was announced, the vision for its future seemed clear and straightforward; by tapping into AOL, Time Warner would reach deep into the homes of tens of millions of new customers. AOL would use Time Warner’s high-speed cable lines to deliver to its subscribers Time Warner’s branded magazines, books, music, and movies. This would have created 130 million subscription relationships.
Unfortunately, the growth and profitability of the AOL division stalled due to advertising and subscriber slowdowns in part caused by the burst of the dot-com bubble and the economic recession after September 2001. The value of the America Online division dropped significantly, not unlike the market valuation of similar independent internet companies that drastically fell, and forced a goodwill write-off, causing AOL Time Warner to report a loss of $99 billion in 2002 — at the time, the largest loss ever reported by a company. The total value of AOL stock subsequently went from $226 billion to about $20 billion.
An outburst by Vice Chairman Ted Turner at a board meeting prompted Steve Case to contact each of the directors and push for CEO Gerald Levin’s ouster. Although Case’s coup attempt was rebuffed by Parsons and several other directors, Levin became frustrated with being unable to “regain the rhythm” at the combined company and announced his resignation in the fall of 2001, effective in May 2002. Although Co-COO Bob Pittman was the strongest supporter of Levin and largely seen as the heir-apparent, Dick Parsons was instead chosen as CEO. Time Warner CFO J. Michael Kelly was demoted to COO of the AOL division, and replaced as CFO by Wayne Pace. AOL Chairman and CEO Barry Schuler was removed from his position and placed in charge of a new “content creation division”, being replaced on an interim basis by Pittman, who was already serving as the sole COO after Parson’s promotion.
Many expected synergies between AOL and other Time Warner divisions never materialized, as most Time Warner divisions were considered independent fiefs that rarely cooperated prior to the merger. A new incentive program that granted options based on the performance of AOL Time Warner, replacing the cash bonuses for the results of their own division, caused resentment among Time Warner division heads who blamed the AOL division for failing to meet expectations and dragging down the combined company. AOL Time Warner COO Pittman, who expected to have the divisions working closely towards convergence instead found heavy resistance from many division executives, who also criticized Pittman for adhering to optimistic growth targets for AOL Time Warner that were never met. Some of the attacks on Pittman were reported to come from the print media in the Time, Inc. division under Don Logan. Furthermore, CEO Parsons’ democratic style prevented Pittman from exercising authority over the “old-guard” division heads who resisted Pittman’s synergy initiatives.
Pittman announced his resignation as AOL Time Warner COO after July 4, 2002, being reportedly burned out by the AOL special assignment and almost hospitalized, unhappy about the criticism from Time Warner executives, and seeing nowhere to move up in firm as Parsons was firmly entrenched as CEO. Pittman’s departure was seen as a great victory to Time Warner executives who wanted to undo the merger. In a sign of AOL’s diminishing importance to the media conglomerate, Pittman’s responsibilities were divided between two Time Warner veterans; Jeffrey Bewkes who was CEO of Home Box Office, and Don Logan who had been CEO of Time. Logan became chairman of the newly created media and communications group, overseeing America Online, Time, Time Warner Cable, the AOL Time Warner Book Group and the Interactive Video unit, relegating AOL to being just another division in the conglomerate. Bewkes became chairman of the entertainment and networks group, comprising HBO, New Line Cinema, The WB, Turner Networks, Warner Bros. and Warner Music. Both Logan and Bewkes, who had initially opposed the merger, were chosen because they were considered the most successful operational executives in the conglomerate and they would report to AOL Time Warner CEO Richard Parsons. Logan, generally admired at Time Warner and reviled by AOL for being a corporate timeserver who stressed incremental steady growth and not much of a risk taker, moved to purge AOL of several “Pittman panzers”.
AOL Time Warner Chairman Steve Case took on added prominence as the co-head of a new strategy committee of the board, making speeches to divisions on synergism and the promise of the Internet. However, under pressure from institutional investor vice president Gordon Crawford who lined up dissenters, Case announced in January 2003 that he would not stand for re-election as executive chairman in the upcoming annual meeting, making CEO Richard Parsons the chairman-elect. That year, the company dropped the “AOL” from its name, and spun off Time-Life’s ownership under the legal name Direct Holdings Americas, Inc. Case resigned from the Time Warner board on October 31, 2005.
In 2005, Time Warner was among 53 entities that contributed the maximum of $250,000 to the second inauguration of President George W. Bush. On December 27, 2007, newly installed Time Warner CEO Jeffrey Bewkes discussed possible plans to spin off Time Warner Cable and sell off AOL and Time Inc. This would leave a smaller company made up of Turner Broadcasting, Warner Bros. and HBO. On February 28, 2008, co-chairmen and co-CEOs of New Line Cinema Bob Shaye and Michael Lynne announced their resignations from the 40-year-old movie studio in response to Jeffrey Bewkes’s demand for cost-cutting measures at the studio, which he intended to dissolve into Warner Bros.
On May 28, 2009, Time Warner announced that it would spin off AOL as a separate independent company, with the change occurring on December 9, 2009.
2010s
In 2010, Turner Sports, Inc. and the National Collegiate Athletic Association jointly announced the formation of NCAA Digital, a 14-year agreement in which Turner will manage and operate the NCAA’s digital portfolio and strengthen coverage of all 88 NCAA championships. NCAA Digital encompasses NCAA.com and additional NCAA digital platforms, including mobile web and applications, as well as other connected devices.
On August 25, 2010, Time Warner’s Latin American division bought Chilean nationwide terrestrial television station Chilevisión from Chile’s former president Sebastián Piñera. Time Warner already operates in the country with CNN Chile.
In 2011, Warner Bros. announced its aqcuisition of Flixster, a movie discovery application company.
In January 2012, Home Box Office and DISH Network LLC reached an agreement that will give DISH customers expanded access to HBO’s acclaimed programming.
In October 2012, Warner Bros. Home Entertainment and Paramount Home Media Distribution reached an agreement that will give Warner Bros. rights to Blu-ray and DVD distribution of several titles from Paramount in the US and Canada.
In June 2014, 21st Century Fox made a bid for Time Warner at $85 per share in stock and cash ($80 billion total) which Time Warner’s board of directors turned down in July. Warner’s CNN unit would have been sold to ease antitrust issues of the purchase.
Transactions
On December 15, 2006, Warner Bros. Entertainment Inc. announced an investment in SCi Entertainment Group plc the parent company of publishing label Eidos Interactive Ltd, representing 10.3 percent of the company’s enlarged share capital. Additionally, Warner Bros. Home Entertainment Group and SCi have entered into an agreement for licensing and distribution of games based on select Warner Bros. Entertainment properties. The investment, licensing and distribution agreements are all pending SCi shareholder approval.
On October 5, 2007, Turner Broadcasting System, Inc. completed the acquisition of Claxson Interactive Pay Television Networks in Latin America.
On November 8, 2007, Warner Bros. Home Entertainment Group announced it has entered into an agreement to acquire TT Games, which encompasses game developers Traveller’s Tales and TT Games Publishing.
On February 4, 2009, Warner Bros. Home Entertainment Group announced their acquisition of Snowblind Studios, a game development studio.
On May 21, 2008, Time Warner and Time Warner Cable Inc. agree to separation.
On February 19, 2009, Time Warner and Time Warner Cable completed the separation of the two companies through a spin-off.
On March 17, 2009, Time Warner Inc. announced that, in connection to the legal and structural separation of Time Warner Cable Inc. (NYSE:TWC) from Time Warner through a tax-free spin-off that became effective on March 12, 2009.
In the first quarter of 2010, Home Box Office purchased additional interests in HBO LAG for $217 million, which resulted in Home Box Office owning 80% of the equity interests of HBO LAG.In 2010, Home Box Office purchased the remainder of its partners’ interests in HBO Europe (formerly HBO Central Europe) for $136 million, net of cash acquired.
On April 20, 2010, Warner Bros. Home Entertainment Group announced the acquisition of Turbine, Inc., a gaming studio in North America.
In August, 2010, Time Warner agreed to acquire Shed Media, a TV production company, for £100m. On October 14, 2010, Warner Bros. Television Group announced that it completed the acquisition of a majority stake in Shed Media, an independent production and distribution company. Shed Media will remain an independent production company, but its distribution operation, Outright Distribution, will be folded into Warner Bros. International Television Production.
On August 26, 2010 Time Warner took full control of Chilevisión, a TV channel owned by Chile’s President Sebastián Piñera.
Central European Media Enterprises Ltd. (“CME”) is a publicly traded broadcasting company operating leading networks in six Central and Eastern European countries. On May 18, 2009, the company completed an equity investment in CME for $246 million.
In May 2011, Warner Bros. Home Entertainment Group announced an agreement to acquire Flixster, a movie discovery application company. The acquisition also includes Rotten Tomatoes, a movie review aggregator.
In 2012, WBTVG acquired Alloy Entertainment, a producer of content, primarily books, aimed at teen girls and young women.
In August 2012, Turner acquired Bleacher Report, (B/R), a sports news organization.
On March 6, 2013, Time Warner announced the divestment of Time Inc. On June 6, 2014, Time Inc. became a publicly traded company. Time Warner will continue to operate under its current name.”
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “ desocupablo“