Time Warner to Downsize New Line Cinema - News Story

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Friday, February 29, 2008 9:14 AM EST
Time Warner to Downsize New Line Cinema

tags: warner bros. time warner peter jackson new line hobbit

Time Warner Inc. announced today the consolidation of its filmed entertainment businesses, Warner Bros. Entertainment and New Line Cinema.

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."

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 4, "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.

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. 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."

New Line is best known for its involvement in Peter Jackson's Lord of the Rings Trilogy. However in 2007, New Line was undermined by dismal returns from several films, including The Golden Compass, a film which had all the potential of the Rings franchise but instead fizzled in spite of a mass marketing campaign.

The upcoming back-to-back movie adaptations of The Hobbit, which New Line is to produce with MGM, will remain on the New Line slate.

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