Time Warner Picks President

Jeff Bewkes, who oversees Time Warner Inc.’s vast entertainment empire, was named president and chief operating officer Wednesday, firmly establishing him as next in line to run the world’s largest media company.

Bewkes, 53, had been considered by Wall Street to be the front-runner to succeed Chief Executive Richard Parsons even while sharing chief operating duties with Don Logan, the 61-year-old head of the company’s cable, publishing and Internet divisions. Logan is retiring to his home state of Alabama at the end of this year.

A wry and polished executive, Bewkes made his mark as chief executive of Time Warner’s Home Box Office, creating a powerhouse with such hits as “The Sopranos” and “Sex and the City,” before moving up to the corporate suites in 2002.

Since then, Bewkes had been on virtually every short list when top media jobs came up, such as when Walt Disney Co.’s board was looking this year to replace Michael Eisner as chief executive before tapping Robert Iger.

Under the terms of Bewkes’ contract, Time Warner had to act by Jan. 1 or risk losing him. Had he not been named sole chief operating officer by then, Bewkes could have looked elsewhere.

Parsons, 57, has not indicated how long he will stay. One of the nation’s top African American executives, Parsons, a prominent Republican, has been mentioned as a potential candidate for influential government posts.

“This makes a clear line of succession,” said independent media analyst Harold Vogel. “Parsons might want to work another five to seven years or he might want to leave the company in two or three. He’s still young enough to do other things, and it doesn’t hurt to have a strong No. 2 ready to take over.”

Bewkes’ elevation comes as Time Warner is in an increasingly nasty fight with billionaire investor Carl Icahn, who wants to break up the company. Icahn has been especially critical of Time Warner’s ill-fated 2001 purchase by Internet giant America Online.

Vogel said that unveiling Bewkes as a successor might be intended as a message to investors being courted by Icahn.

“Dick Parsons is showing that he’s got things well-organized and structured,” Vogel said.

Clearly mapping out a succession plan, as Time Warner has done, is something that other media giants such as Viacom Inc., controlled by 82-year-old Sumner Redstone, and News Corp., headed by Rupert Murdoch, 74, have failed to do, Vogel said.

In his new post, Bewkes will have broad day-to-day oversight of a vast array of operations that include the Warner Bros. studio, New Line Cinema, Time Warner Cable, HBO, CNN, TNT, TBS, the WB network, AOL and more than 100 magazines, including Time and Sports Illustrated. One of his biggest challenges will be figuring out how best to leverage the company’s assets in a digital world, delivering entertainment and information through such means as the Internet, cellphones and other portable devices such as iPods.

In an interview, Bewkes said he wasn’t planning big changes.

“Our biggest issue is the thing we focus on the most, which is outperforming our peers,” Bewkes said. “The way to do this is the way we’ve been doing it. And if you are in the lead, that gives you some advantages.”

Parsons in a statement described his moves Wednesday as “Don’s well-earned retirement and Jeff’s well-deserved promotion.” Others praising Bewkes included former Warner Bros. Chairman Robert Daly.

“He studies a problem, zeros in on a solution and then he fixes it,” Daly said. “He’s very bright, he gets along with people, and he has a tremendous amount of energy, which is a positive thing for Time Warner right now.”

A Yale and Stanford Business School graduate, Bewkes is the son of Eugene Garrett Bewkes Jr., who was a top executive at Norton Simon Inc. and served as chairman of American Bakeries. After working at Sonoma Vineyards winery in Northern California, Bewkes had a stint at Citibank before landing at HBO.

In early 2002, Parsons assumed the reins as Time Warner was hemorrhaging red ink from the AOL deal and its stock price was in a free fall. He quickly divided the company operations in two, teaming Bewkes with Logan in an effort to regain stability.

“Since I asked Don and Jeff to help me run the company in the summer of 2002, we have overcome a long list of challenges and put this company back on track,” Parsons said.

But the trio had to steer through a tumultuous time, including government investigations of AOL’s accounting practices, a sagging stock price and bitter rifts among its executives.

Logan, who has spent 35 years at the company, has made no secret of his plans to retire. He will become chairman of Time Warner Cable, a nonexecutive post.

It was widely thought that Logan would wait until spring to step down. However, executives said he had accomplished much of what he set out to do when Time Warner last week negotiated a deal with Internet search engine Google Inc. to pay $1 billion for a 5% stake in AOL.

Logan, they said, also wanted to hand over his part of the company to Bewkes on Jan. 1, the start of the new budget year, to give his colleague a clean slate.

Time Warner shares were down 16 cents at $17.58.