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Major Investors Want Time Warner To Split in Four
Big Media is not Best Media for Time Warner -- the world's largest media company and a major pacesetter for media and ecomonic trends, according to an investor group headed by Carl Icahn. Unveiling its long-awaited report on a plan to restructure Time Warner, it recommends a strategy that would split the media giant into four separate publicly traded companies: America Online Inc., Time Warner Cable, the Warner Bros. movie studio and cable networks and its publishing businesses.
Another death blow to that false religion preached by Wall Street in the Go Go '90s that bigger is better and synergy would lead to the promised profit (note: not prophet) land. This report -- following the recent corporate splits of Viacom and others -- exposes the truth of what the post-Telecom Bill of 1996 really was: a land grab which increased property values and placed consumer demands clearly in a secondary role.
With the new call from government and independent think tanks for renewed investment in innovation, research and global competitiveness, we just may be on a new trend. Consumer satisfaction may just come back in vogue. And we'll have the marketplace to thank.
According to the report, Time Warner has lost about $40 billion in shareholder value since 2002, and its shares have underperformed the major stock indexes by about 40%.
They say Time Warner senior management has run the company for the short term, missing out on key acquisitions while mismanaging one of its biggest assets, AOL. To be fair, Time Warner was simply doing what other Big Media companies were doing -- trying to figure out what in the world to do with all their newly-acquired/merged assets in a rapidly-evolving Media World while pressured by Wall Street to perform now.
If Time Warner follows the spin-off advise of its biggest investors, it would send out positive ripples across the economy. Now that would be innovative.
Read the full article here.
posted by Unknown @ Wednesday, February 08, 2006,
