Warner Bros. Expects Smooth Transition Under New CEO

The elevation on Monday of Barry M. Meyer to chairman and chief executive of Warner Bros.--along with the naming of producer Alan Horn to oversee the company’s movie unit--should avoid the kind of upheavals most studios go through when a new team moves into the executive suites.

Typically, new executives clear the decks about the same time they’ve figured out where their parking space will be. They bring in their own people and toss out projects they didn’t hatch.

But Meyer is the consummate Warner Bros. insider, having worked there for 28 years, and was virtually handpicked as the successor by departing studio co-chief Robert A. Daly. And although his expertise is television, Meyer’s most recent job as executive vice president and chief operating officer gives him intimate knowledge of a wide range of Warner Bros. businesses.

From the start, Meyer was the logical choice after co-chiefs Daly and Terry Semel told Time Warner Inc. Chief Executive Gerald M. Levin three weeks ago that they would leave the company by Dec. 31, when their contracts expired. Daly and Semel now plan to leave Oct. 4. In addition to having support from Daly and Semel, Meyer also had strong support from other Warner insiders, is well-liked by Levin and Time Warner President Richard Parsons and was favored by influential Time Warner investors.

“My choice all the way was Barry. I think he’s done a spectacular job. He’s liked and well-respected,” said Gordon Crawford, the influential money manager with Los Angeles-based Capital Research & Management Co.

Meyer said he made it known he wanted the job after learning Daly and Semel were leaving. Levin in an interview did not elaborate on what went into his decision but did indicate that he looked at several scenarios.

“It’s hard to articulate this, but in this case my gut tells me this is really right,” Levin said. “I’m so optimistic as a result of this.”

Levin will have Warner Bros. report to him through Parsons, modeled after the way he has Time Warner’s cable networks report to him through Vice Chairman Ted Turner.

A New York native and a lawyer by training, Meyer, 55, oversees Warner’s television operations, maintaining an admittedly low profile despite having one of the industry’s more powerful positions. “I’ve always viewed myself as--you put your head down and you do your job,” Meyer said.

Now, he said, his challenge is to lead the company in the same way Daly and Semel did in the nearly 20 years they ran Warner. “This is a company that in my view has very good management. It’s not about needing more management. What Alan and I have to do is provide leadership,” Meyer said.

Levin said that Meyer “represents continuity, but he also represents change.” Comparing his own elevation at Time Warner in 1992 from a second-in-command job, Levin said that when that happens to an executive, “you have a good sense as to what works, and you also know what needs to be changed. That’s what Barry and Alan are going to be about. Change is good.”

Analysts and Hollywood executives expect a retrenching from the Daly and Semel era that was marked by big-budget, star-driven films. Meyer said he expects to leave the film work to Horn, but says that Warner Bros. overall will seek to balance its films between bigger and smaller films. “I certainly don’t see any kind of diminishment of the motion picture business for Warner Bros. It is a key, critical part of our company and has been for 75 years,” Meyer said.

While Meyer’s appointment drew universal praise, Horn’s reviews were more mixed in part because Castle Rock’s record has been spotty lately. Horn will be president and chief operating officer.

Castle Rock produced such major hits as “A Few Good Men” and “When Harry Met Sally” and the hugely successful TV show “Seinfeld,” but suffered through a drought with such movies as “North” and “My Giant.” Castle Rock, which Horn co-founded in 1987, was acquired by Turner Broadcasting System in 1993, which in turn was acquired by Time Warner in 1996. Castle Rock now answers to Warner Bros.

A former Air Force captain with a third-degree black belt in karate and a master’s degree in business administration from Harvard, Horn, 56, is regarded as a highly intelligent executive and skillful deal maker. But producers with ties to Warner questioned whether he has had enough involvement in the creative end of the business over the years to run a movie division, and whether his resume is tilted more to television than films.

Daly, who also recommended Horn for the job, said Castle Rock’s bad run was caused when Turner asked the company to increase the number of films produced, resulting in some bad ones getting made. He said that once Horn and the company scaled back, they came up with a promising slate of upcoming films such as “The Green Mile” with Tom Hanks and “The Story of Us” with Michelle Pfeiffer and Bruce Willis.

“People talk of how Castle Rock had a bad run,” Daly said. “But everybody has bad runs. These guys have done some good stuff. Alan is very good on budgets, and I think they will make a very good pair. Barry needs someone who understands the theatrical side.”

Horn said that since Castle Rock was formed, it has made nearly 60 films. “I’ve sat in on an awful lot of screenplay meetings,” Horn said.

One challenge for Horn will be to heal internal rifts such as one between production chief Lorenzo di Bonaventura and business affairs chief Jim Miller, sources said.

Unclear in the announcement is the fate of Warner’s music group, which won’t report to Meyer as it did to Daly and Semel. It will report to Levin through Time Warner President Parsons, with Levin expected to name a new music head in as little as two weeks. If that happens, sources said the most likely contender for the job is Atlantic co-chair Val Azzoli. Another name being floated for the job is Roger Ames, a former PolyGram executive who was recently hired by Time Warner to help revive its international music arm. Ames, however, just moved back to London for his new Time Warner job and is said to have no desire to return to the U.S.