Time Warner Combines Filmed-Entertainment Businesses

NEW YORK, February 29: Time
Warner has announced the consolidation of its filmed-entertainment businesses,
Warner Bros. Entertainment and New Line Cinema, with New Line Cinema to operate
as a unit of Warner Bros. Entertainment.

As part of the
consolidation, New Line will maintain separate development, production,
marketing, distribution and business-affairs operations, but will closely
integrate and coordinate those functions with Warner Bros. to maximize film
performance and operating efficiencies, achieve significant cost savings and
improve margins.

New Line’s co-chairmen and
co-CEOs, Robert Shaye and Michael Lynne, have elected to leave the studio, but
are in discussions about possible future business relationships with the
company.

Time Warner’s president
and CEO, Jeff Bewkes, said: “We are moving quickly to improve our business performance and
financial returns. New Line has built a strong franchise of cutting-edge
entertainment. We can enhance its value by combining it with Warner Bros. Given
the trend toward fewer movie releases, New Line and Warner Bros. will now have
more complementary release slates, with New Line focusing on genres that have
been its strength. With the growing importance of international revenues, it
makes sense for New Line to retain its international film rights and to exploit
them through Warner Bros.’ global distribution infrastructure. We can also take
better advantage of digital-distribution platforms by combining our studios.
These changes will enhance our revenue opportunities and drive dramatic cost
efficiencies and higher margins at New Line.”

—By Irene Lew