Time Warner CEO Richard Parsons is barely out the door and the company is already having what looks to be a major fire sale. Jeffrey Bewkes, who takes over as chief executive officer of Time Warner Inc. next week, is rumored to be the force that quickly dismantles the world's largest media company.Bewkes may spin off the cable-television division and sell the AOL Web and Time Inc. magazine units, said Gamco Investors Inc. fund manager Chris Marangi and National City Bank analyst Daniel Poole. The remaining company, anchored by the film studio and cable-TV networks, would resemble Viacom Inc. -- and accordingly command higher multiples, Marangi said.
Sumner Redstone's Viacom, owner of Paramount Pictures and MTV Networks, trades for nine times projected 2008 earnings before interest, taxes and non-cash expenses, Marangi said in an interview. New York-based Time Warner, whose assets include Warner Bros., CNN and HBO, trades at seven.``There's nothing special necessarily about being the biggest,'' Marangi said. Gamco, based in Rye, New York, has $30 billion in assets, including 11.3 million Time Warner shares. ``It's more important to be nimble.
Bewkes, 55, inherits a company created in 2001 with America Online Inc.'s $124 billion takeover of Time Warner Inc., billed as the ultimate in media convergence. Plans to sell everything from TV shows to magazines through the AOL network ended in record losses and the exits of CEO Gerald Levin and Chairman Stephen Case.
While outgoing Richard Parsons returned Time Warner to profitability, he failed to reignite the stock. Time Warner's 22 percent drop this year before today puts it among the 10 biggest losers in the S&P 100 Index of large U.S. companies. Where Parsons fended off pressure from billionaire Carl Icahn to unravel the company by selling a 16 percent stake in Time Warner Cable this year and buying back more shares, Bewkes may end up revisiting the idea.``We will be looking at anything that improves our strategic advantage,'' Bewkes said.'