Nerves are taut over at Warner Brothers, where executives are enduring all manner of gossip about their fearless leaders, Barry Meyer and Alan Horn.
The indignity of chairman Meyer and president Horn’s being offered a mere two-year contract offer -- after decades of service at the studio -- is the talk of the town. “It’s bothersome to all of us,” said one annoyed executive. “They’re beloved at this company.”
Nonetheless, Time Warner CEO Jeff Bewkes has set the gossip mill in motion with his public gesture of a foreshortened contract, and with a statement in the L.A. Times that he and Meyer and Horn are ready for new leadership.
Really? That sounded a little odd.
I asked Bewkes to confirm this, and he responded that all the lame-duck scuttlebutt was “ridiculous.” He wrote: “They started two years ago discussing with me their aim to transition around the end of 2011, so we recently extended those deals accordingly.”
He added that the two-year contract is nothing odd. “It’s not a change in their plans or my plans, and partly it is to develop all our internal people to be ready when that time rolls around,” he wrote.
So if I have this straight, Meyer and Horn asked two years ago to be relieved of their duties in 2011, and to step aside for a younger generation? Sorry, Jeff, this sounds suspiciously like: “They want to spend more time with their families” -- the photo op before the firing squad.
On the other hand, Bewkes is right in his strategy. Meyer and Horn have presided over decades of blockbuster movies and blockbuster profits at Warners, but it is a different time, run by splintered attention spans, multiple platforms and a changing television landscape.
If the new Time Warner chairman is going to preside over a period of sustained growth, the movie and television studio needs a major overhaul, a new approach. Wall Street has complained for a very long time that Warners is the most profligate of studios in its spending, offering an annual return of 6 to 8 percent compared to that of some other studios such as Twentieth Century Fox, which is notoriously tight on costs, but more commonly approaches 15 percent returns.
Anecdotal evidence from producers who wander the back lots of each confirm the difference in attitudes toward spending; one who left Warners and now works at Fox told me that he learned an entirely new vocabulary on production spending when he moved across town to Century City.
Bewkes disputes this: “Everybody gets this wrong. Warner makes the most money (highest earnings, highest cash flow by far) every year, and this year will again outperform all other studios. That's what counts.”
But the gossip mill is working overtime: The plan, says some wags, is to keep Meyer and Horn in place for the next year while Peter Chernin, who steps down from News Corp in June, pursues his charities and cures malaria if at all possible.
