Time Warner to Fold Turner Pictures in Cost-Cutting Move

Time Warner Inc. confirmed Thursday that it is pulling the plug on Turner Pictures, a fledging 8-year-old film unit it inherited when it acquired Turner Broadcasting System Inc.

The move had been widely expected, given that Time Warner already owns the giant Warner Bros. studio.

In a statement, Time Warner Vice Chairman Ted Turner said phasing out the unit and absorbing the film projects into Warner Bros. “will serve the projects and be in the best overall interest of the company.”

Added Warner Bros. co-Chairman Robert Daly in an interview: “When Ted Turner was running Turner, he basically needed to produce new movies because he needed them for his cable channels and his libraries. When you merge together and get involved in a company as big as our company, the needs of everyone are not the same. We already have a lot of movies coming out of Warner Bros.”

Time Warner has pledged to try to find jobs for the 50 employees of the film unit, although it’s unclear whether there will be room for them at Warner.

Also unclear is the status of Turner Pictures President Amy Pascal, who many expect to leave because there doesn’t appear to be a comparable job for her at Warner Bros. Another top Turner film executive, Scott Sassa, recently left to oversee billionaire Ronald Perelman’s entertainment operations.

Daly said he and co-Chairman Terry Semel are in talks with Pascal, adding that “we adore her.”

Time Warner is trying to cut debt and produce cost savings in the wake of the $7.3-billion acquisition of Turner, so consolidating overlapping film units is in line with that goal.

Separately, Time Warner is also exploring divesting part or all of Turner’s New Line Cinema, a film distributor. In addition, Turner’s Castle Rock Entertainment film and TV production unit has been openly shopped around without success.

Turner Pictures’ upcoming holiday comedy “Michael,’ which stars John Travolta and is directed by Nora Ephron, will be released by New Line. After that, the films will be distributed through Warner Bros., including movies already given the green light, such as “Edwards and Hunt: The First American Road Trip,” “City of Angels,” “Fallen” and a live-action film of “The Jetsons” cartoon. Warner will also absorb about 50 film projects in development.

Turner Pictures was founded in 1988 to make movies for Turner’s TNT cable channel, but was later expanded to include theatrical films. Past releases include the acclaimed “Gettysburg” and the film “Angus.”