Ho John Lee’s Weblog

The proposal on the table is to split Time Warner into four pieces, undoing years of mergers and acquisitions. The (massive) report from Carl Icahn’s investment banking team at Lazard is worth a look for anyone with an interest in online or traditional media businesses or who simply lived through the dot-com boom and crash. I’ve only skimmed through it so far, but it’s practically a textbook on the evolution and current state of the media industry.

TWX is at the center of the storm that has and will continue to jolt American industry. Technology, regulation and competition are changing at an accelerated pace. The markets are increasingly rewarding companies—across all industries—with a well-defined vision, as shareholder expectations on transparency, capital returns, appreciation and corporate governance increase. Against this backdrop, anticipating and harnessing change is critical for success.

If you want to get a quick look at market sizes, margins, and fees, this is a fascinating read. It’s packed with details comparing the financial and operating performance and market reach of AOL with Google, Yahoo, MSN, and other online properties, television properties such as HBO, CNN, Cartoon Network, Court TV, and others, print publishing for People, Time, and dozens of magazines, the Time Warner cable system, and the Warner Brothers movie business.

The proposed restructuring would create four new businesses: AOL, a television and film media business, a print publishing business, and Time Warner’s cable distribution business. I have no stake in TWX, but if I were a long time shareholder, I’d be wondering why I’m getting a lower return than holding cash, while I see hugely successful franchises (The Matrix, Harry Potter, AOL, HBO, People) operating in the various business units. Icahn only holds about 3% of the company, so the proposal doesn’t seem likely to succeed soon, but this is a pretty major prod for the TWX management team.

The 300-something-page report, along with various SEC filings, is available for free download from enhancetimewarner.com

More from Bloomberg, Business Week.

See also:

• Kara Swisher’s There Must Be A Pony In Here Somewhere
• Nina Munk’s Fools Rush In: Steve Case, Jerry Levin, and the Unmaking of AOL Time Warner

This entry was posted on Tuesday, February 7th, 2006 at 11:01 pm and is filed under Business, Front Page. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.