Update: WB/New Line - What Does it Mean?
You’ve heard the rumors, and it now looks to be true. This afternoon Time Warner has announced that New Line Cinema will become part of Warner Bros. This is the expected result of the companies string of recent box office failures, topped with the mega failure of The Golden Compass. Read the letter from Bob Shaye and Michael Lynne which is currently circulating the interwebs, followed by the official Time Warner press release:
February 28, 2008
To: New Line Colleagues
From: Bob Shaye and Michael Lynne
Subject: Our Company
This afternoon, Time Warner is announcing that New Line will become a unit of Warner Bros. This is, of course, a very difficult and emotional time for all of us who have worked at New Line. While there is not much we can say that can lessen the impact of this announcement, we did want you to know about the decision before you read about it in the press.
New Line will maintain its own identity and will continue to produce, market, and distribute movies. But New Line will now do so as part of Warner Bros. and will probably be a much smaller operation than in the past. Time Warner hopes that operating New Line as a unit of Warner Bros. will allow New Line to focus on the creative side of movie-making, while reducing costs and taking advantage of Warner Bros.’ distribution systems. The company will be holding group meeting with New Line employees tomorrow in Los Angeles and New York to discuss this announcement, and is committed to letting employees know as soon as possible about how this change affects them individually.
For our part, we will be stepping down as Co-Chairmen and Co-CEOS of New Line. This was a painful decision, because we love New Line and the people who work here have been like our second families. But we will be leaving the company with enormous pride in what all of us at New Line have accomplished together. From its humble beginnings 40 years ago, our studio has created some of the most popular and successful movies of all time. Those movies are a tribute to the amazing creative energy and entrepreneurial abilities of the talented people at New Line. They are a legacy that will endure forever.
Although we are stepping out of New Line, we intend to remain actively involved in the industry in an entrepreneurial capacity, and will keep you advised of developments.
We thank all of you who have worked so hard to make New Line such a success. We are very proud of every one of you.
Bob & Michael
TIME WARNER CONSOLIDATES FILMED ENTERTAINMENT BUSINESSES
New Line Cinema To Be A Unit Of Warner Bros. Entertainment
NEW YORK, February 28, 2008 – Time Warner Inc. (NYSE: TWX) announced today the consolidation of its filmed entertainment businesses, Warner Bros. Entertainment and New Line Cinema. The combination brings together New Line’s 40-year legacy as the world’s most successful and innovative independent film studio with Warner Bros.’ creative leadership and unparalleled scale and reach in global distribution and marketing.
As part of the consolidation, New Line will be operated as a unit of Warner Bros. New Line will maintain separate development, production, marketing, distribution and business affairs operations, but will closely integrate and coordinate those functions with Warner Bros. to maximize film performance and operating efficiencies, achieve significant cost savings, and improve margins.
In making the announcement, Time Warner’s President and Chief Executive Officer Jeff Bewkes said: “We are moving quickly to improve our business performance and financial returns. New Line has built a strong franchise of cutting-edge entertainment. We can enhance its value by combining it with Warner Bros. Given the trend toward fewer movie releases, New Line and Warner Bros. will now have more complementary release slates, with New Line focusing on genres that have been its strength. With the growing importance of international revenues, it makes sense for New Line to retain its international film rights and to exploit them through Warner Bros.’ global distribution infrastructure. We can also take better advantage of digital distribution platforms by combining our studios. These changes will enhance our revenue opportunities and drive dramatic cost efficiencies and higher margins at New Line.”
New Line’s Co-Chairmen and Co-CEOs Robert Shaye and Michael Lynne have elected to leave the studio, but are in discussions about possible future business relationships with the company.
Mr. Bewkes said: “Bob and Michael have a unique partnership that is noteworthy not only for its stability and longevity, but for its record of innovation and success. They have guided New Line’s growth from a privately held art film distributor to the world’s leading independent film studio that is home to some of the most popular films in entertainment history, including The Lord of the Rings trilogy, The Mask, Austin Powers, Blade, Rush Hour, Elf, Wedding Crashers and Hairspray. We thank Bob and Michael for their enduring contributions to Time Warner and look forward to a continuing working relationship with them.”
Mr. Shaye and Mr. Lynne said: “New Line has been our respective life’s work as well as our second family. While we’re sad to be leaving, we’re enormously proud to have overseen its extraordinary growth and worked with so many dedicated and talented colleagues. New Line represents innovation, creativity, and independent success. We hope that the company can continue to be a leader in creating entertainment that resonates around the world. We will now focus our efforts on exploring new entrepreneurial opportunities.”