Time Warner, Inc. is an American multinational mass media and entertainment conglomerate headquartered in New York City. It is currently the world's third largest entertainment company in terms of revenue, after Comcast and The Walt Disney Company. It was also once the world's largest media conglomerate. Time Warner was first founded in 1990, with the merger of Time Inc. and Warner Communications. The current company consists largely of the assets of the former Warner Communications (as well as HBO, a Time Inc. subsidiary prior to the merger), and the assets of Turner Broadcasting (which was acquired by the company in 1996).
Time Warner currently has major operations in film and television, with a limited amount in publishing operations. Among its major assets are HBO, Turner Broadcasting System, The CW, Warner Bros., CNN, DC Comics, and as of August 2016, Hulu, owning 10%. In the past, other major divisions of Time Warner included Time Inc., AOL, Time Warner Cable, Warner Books and Warner Music Group. All of these operations were either sold to other investors or spun off as independent companies from 2004 to 2014.
On October 22, 2016, AT&T announced its intent to acquire Time Warner for $108.7 billion (including assumed Time Warner debt).
Time Warner consists of three divisions: Home Box Office, Inc. (HBO), Turner Broadcasting System, Inc., and Warner Bros.
Home Box Office, Inc. operates the namesake HBO premium television service as well as sister service Cinemax. HBO- and Cinemax-branded channels are currently available in over 70 countries around the world, and HBO programming is licensed to other television networks in over 150 countries.
In 2012, HBO was the #1 premium pay television service in primetime television and total day ratings. In 2013, the network received five Golden Globes and 23 primetime Emmy Awards.
HBO’s programming includes the airing of feature films, HBO Documentary Films, HBO original films, and HBO original programming, HBO Sports (live HBO Boxing events). The network has developed content distribution platforms, like HBO GO and Max GO to help support and deliver programming to users via online and mobile devices.
HBO's notable original programming includes Game of Thrones, Sex and the City, The Sopranos, Curb Your Enthusiasm, The Wire, Entourage, Deadwood, True Blood, Boardwalk Empire, Girls, Veep, Silicon Valley, and Westworld, as well as motion pictures, mini-series, boxing matches and sports programs, comedy specials, family programming and documentaries. In 2011, Cinemax launched its first original primetime series, Strike Back, and has subsequently launched the original primetime series, Hunted and Banshee.
Turner Broadcasting System, Inc. (Turner) operates international news, entertainment, animation, young adult and kids media networks as well as related businesses. Turner brands include CNN, HLN, TNT, TBS, Cartoon Network, Turner Classic Movies, truTV, Turner Sports, and more. Turner's brands and sub brands reach broad domestic and international audiences. In addition to television network programming, Turner manages digital sports entities, including bleacherreport.com NBA.com, PGA.com and NCAA.com. Turner’s TBS channel reaches large audiences in the 18- to 34-year-old bracket and its news network, CNN, provides a 24-hour news network that delivers news and analysis to domestic and international audiences across multiple platforms. Turner Sports produces sports programming and content for the Turner Networks and related digital properties. Turner Sports’ television line-up includes NBA and MLB games, the NCAA Tournament Games, and the PGA Championship. Turner operates PGA.com and related digital properties of the PGA under agreements with the PGA. Turner and the NBA jointly manage a portfolio of the NBA’s digital businesses, including NBA TV, NBA.com, NBA League Pass, NBA Mobile and the NBA GameTime app. Also Turner and MLB jointly manage a portfolio of the MLB's digital businesses including MLB Network, MLB.com, MLB Extra Innings and the MLB Network App.
Warner Bros. businesses range from feature film and TV to home entertainment production and worldwide distribution to home video, digital distribution, animation, comic books, licensing and international cinemas and broadcasting. In 2012, the Warner Bros. Pictures Group grossed 4.3 billion dollars at the worldwide box office. Home Video is the industry leader with a 21% market share in total DVD and Blu-ray sales.
The Warner Bros. Home Entertainment Group works across platforms and outlets in the digital realm with video-on-demand, branded channels, original content, anti-piracy technology and broadband & wireless destinations. Each year Warner Bros. Pictures produces between 18 and 22 films. Warner Bros. has produced more than 50 television series in the 2012–2013 television season. Warner Bros. has also incorporated DC Comics content into Warner Bros. Entertainment via the creation of the DC Entertainment division, which was founded in 2009. DC Entertainment, which is wholly owned by the Company, is responsible for bringing the stories and characters from the DC Comics, Vertigo and MAD Magazine publishing portfolios into other Warner Bros. content and distribution businesses, including feature films, television programming, video games, direct-to-consumer platforms and consumer products. The DC Comics imprint, home to such iconic characters as Batman, Superman, Wonder Woman, Flash and Green Lantern, has launched digital versions of its top comic book and graphic novel titles, making them available for download on digital platforms.
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-length talking picture, The Jazz Singer.
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.
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 in Garden 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 Bros. 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.
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 (formerly Gulf+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".
US West partnered with Time Warner in 1993 to form what is now known as TW Telecom, initially known as Time Warner Communications (also utilized as the brand name for cable operation previously under the ATC name), in order to bring telephone via fiber to the masses. US West also took a 26% stake in the entertainment portion of the company, calling that division Time Warner Entertainment (or legally Time Warner Entertainment Company L.P.). US West's stake eventually passed to acquired cable company MediaOne, then to AT&T Broadband in 1999 when that company acquired MediaOne, then finally to Comcast in 2001 when that company bought the AT&T Broadband division. Comcast sold their stake in the company in 2003, relegating the name to a subdivision under Time Warner Cable.
Time Warner merged with 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), while Turner gained access to WB's post-1950 library, as well as other WB-owned properties.
Time Warner purchased the 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.
In 2000, it was announced that AOL would purchase Time Warner for $164 billion. Due to the larger market capitalization of AOL, their shareholders 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 more assets and revenues. Time Warner had been looking for a way to embrace the digital revolution, while AOL wanted to convert its stock price into tangible assets.
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.
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 Chairman and 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 loss of market share to the growth of high speed broadband providers. 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 Parsons' 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. Jeff Bewkes, who eventually became CEO of Time Warner in 2007, described the 2001 merger with AOL as 'the biggest mistake in corporate history'.
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.
In 2009, Time Warner spun out its Time Warner Cable division, and later AOL, as independent companies.
On August 25, 2010, Time Warner's Latin American division bought Chilean nationwide terrestrial television station Chilevisión from Chile's elected president Sebastián Piñera. Time Warner already operates in the country with CNN Chile.
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. On August 5, 2014, 21st Century Fox withdrew its offer to purchase Time Warner.
In January 2014, Time Warner, Related Companies, and Oxford Properties Group announced that Time Warner intends to relocate the Company’s corporate headquarters and its New York City-based employees to 30 Hudson Yards in the Hudson Yards neighborhood in Chelsea, Manhattan, and has accordingly made an initial financial commitment. Time Warner sold its stake in the Columbus Circle building for $1.3 billion to Related and two wealth funds. The move will be completed in 2018.
In the first quarter of 2010, Time Warner purchased additional interests in HBO Latin America Group for $217 million, which resulted HBO owning 80% of the equity interests of HBO LAG. In 2010, HBO purchased the remainder of its partners’ interests in HBO Europe (formerly HBO Central Europe) for $136 million, net of cash acquired.
In August 2010, Time Warner agreed to acquire Shed Media, a TV production company, for £100 million. Its distribution operation, Outright Distribution, was folded into Warner Bros. International Television Production.
On August 26, 2010, Time Warner cquired Chilevisión.
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 June 2012, Time Warner acquired Alloy Entertainment, a publisher and television studio whose works are aimed at teen girls and young women.
On August 6, 2012, Time Warner acquired Bleacher Report, a sports news website. The property was placed under the control of the Turner Sports division.
On March 6, 2013, Time Warner announced that it would spin off its publishing division Time Inc. as a separate, publicly traded company. The transaction was completed on June 6, 2014.
On October 20, 2016, it was reported that AT&T was in talks to acquire Time Warner. The proposed deal would give AT&T significant holdings in the media industry; AT&T's competitor Comcast had previously acquired NBC Universal in a similar bid to increase its media holdings, in concert with its ownership of television and internet providers. On October 22, 2016, AT&T reached a deal to buy Time Warner for $108.7 billion. If approved by federal regulators, the merger would bring Time Warner's properties under the same umbrella as AT&T's telecommunication holdings, including satellite provider DirecTV. The deal has faced criticism for the possibility that AT&T could use Time Warner content as leverage to discriminate against or limit access to the content by competing providers.
On February 15, 2017, Time Warner shareholders approved the merger. On February 28, Federal Communications Commission chairman Ajit Pai announced that his agency will not review the deal, leaving the review to the Department of Justice. On March 15, 2017, the merger was approved by the European Commission.
In the wake of the presidency of Donald Trump, Time Warner's ownership of CNN has been considered a potential source of scrutiny for the deal, as Trump has repeatedly criticized the network for how it has covered his administration, and stated during his campaign that he planned to block the acquisition because of the potential impact of the resulting consolidation. Following his election, however, his transition team stated that the government planned to evaluate the deal without prejudice.
On November 8, 2017, reports of a meeting between AT&T CEO Randall L. Stephenson and Makan Delrahim, assistant Attorney General of the Department of Justice's Antitrust Division, indicated that AT&T had been recommended to divest DirecTV or Turner Broadcasting, seek alternative antitrust remedies, or abandon the acquisition. Some news outlets reported that AT&T had been ordered to specifically divest CNN, but these claims were denied by both Stephenson and a government official the following day, with the latter criticizing the reports as being an effort to politicize the deal. Stephenson also disputed the relevance of CNN to the antitrust concerns surrounding the acquisition, as AT&T does not already own a national news channel.
On January 24, 2006, CBS Corporation and Time Warner announced that they were to create a new broadcast network, The CW. The network officially debuted on September 18, 2006. The network formally debuted on September 20 with the 2-hour premiere of America's Next Top Model.
The network is the result of a merger of The WB (a Time Warner holding) and UPN (a CBS Corporation holding). CBS Corporation and Time Warner each own 50% of the network. Tribune Broadcasting (previously owned a 25% stake on The WB) and CBS Corporation contributed its stations as new network affiliates.
Time Warner owns several large properties in New York City; certain buildings in the Rockefeller Center complex and adjacent office towers house its main offices; one of which houses a CNN news studio. In late 2003, Time Warner finished construction of a new twin-tower complex, designed to serve as additional office space, facing Columbus Circle on the southwestern edge of Central Park. Originally called the AOL Time Warner Center, the 755-foot (230 m), 55-floor mixed-use property was renamed Time Warner Center when the company itself was renamed.
Jeffrey Bewkes, Chairman and CEO
And five executive vice presidents, most with additional, functional titles:
Time Warner faces industry competition from traditional media companies such as Sony, CBS Corporation, 21st Century Fox, Viacom, The Walt Disney Company, and Comcast. Time Warner's and many of their competitions' business may be severely impacted by the increasing viewership of feature films, television programming and other content online with low ad-income, which decreases company revenues.
Box office receipts have been rising while the growth rate of DVD sales have recently been declining, which affects Warner Bros.' growth prospects and revenues.