Back to basics at Time Warner
The media giant has just unveiled its much-anticipated plans to spin off Time Warner Cable Inc, resulting in the complete legal and structural separation of the two companies.
Plans call for Time Warner to exchange its 12.4 percent interest in TW NY Cable Holding Inc, a subsidiary of Time Warner Cable, for 80 million newly issued shares of Time Warner Cable’s Class A common stock. Time Warner will pay a one time $10.9 billion dividend.
But financial details aside, what Time Warner has in mind is appeasing shareholders frustrated by the company’s stock price, and those calling for the company to do something with its AOL Internet unit. Presumably, with the cable plans out of the way, there will be more time to talk about AOL around the executive suite.
It’s the first big, splashy decision by Jeff Bewkes, Time Warner’s chief executive, and will have the company getting back to its roots — namely, the business of entertaining consumers on the screen and in pages of magazines. It should be interesting to watch.
Keep an eye on:
- Microsoft is not looking to bid to buy all of Yahoo but is in talks about other types of deals with the U.S. No. 2 search engine, Microsoft CEO Steve Ballmer says (Reuters)
- Wall Street Journal Publisher Robert Thomson was named the paper’s new managing editor, taking the helm from Marcus Brauchli after he left last month under pressure (WSJ.com)
- Stuart Elliott writes that TV networks are reaching back in time to combat digital video recorders with the live commercial (NY Times)
- The head of Virgin Mobile USA told the Reuters Global Technology, Media and Telecoms Summit that he expects more consolidation in the U.S. telecommunications industry, including deals among providers who rent space on larger operator’s networks (Reuters)