In the midst of a corporate-wide initiative to manage costs and run its operations more efficiently, Time Warner Inc. chairman and CEO Jeff Bewkes said that the media giant will spend wisely in 2009, and in the case of its programming networks, more.
On a conference call discussing 2008 and fourth-quarter results with analysts Wednesday, Bewkes said that although Time Warner has aggressively reduced operating expenses and expects capital expenditures to be flat in the coming year, "We are going to invest more on content development this year than last year."
Time Warner's cable networks have already expanded their programming lineups - TNT will air 10 original series (including six new shows) in 2009 and TBS will broadcast three.
Time Warner Inc. slid to a $16 billion loss for 2008, largely because of a $25 billion asset impairment charge the company took in the quarter tied to its AOL, publishing and cable businesses. Revenue at the media giant declined 3% in the fourth quarter to $12.3 billion and operating income before depreciation and amortization slid 8% to $3.2 billion as gains at its cable and movie studio were offset by declines at its networks and publishing units.
Cable network revenue rose 9% to $2.9 billion in the quarter from $2.7 billion in 2007, but OIBDA at the unit declined 20% to $682 million from $857 million in 2007, largely because of a one-time $270 million charge taken in connection with a trial court judgment against Turner Broadcasting Systems related to the sale of the National Hockey League Atlanta Thrashers and the National Basketball Association Atlanta Hawks teams in 2004. Without that one-time charge, OIBDA at the networks would have risen 10% in the period.
On a conference call with analysts to discuss fourth quarter results, Bewkes said that performance at the networks has been strong - he said advertising revenue was up 7% at the division during the quarter, outpacing its peers. And though the advertising outlook is bleak for this year, he again expects Time Warner to better its counterparts in the cable industry.
Bewkes pointed to Home Box Office, which ended 2008 with more than 40 million subscribers, the largest subscriber count in its history. And ratings at the Turner networks continue to be strong - up 16% in prime time for the year at TBS and up 4% at TNT.
Bewkes added that the planned split off if its cable unit is on track and should be completed by the end of the first quarter.