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End of an Era: Shaye and Lynne Ankle New Line

by Anne Thompson
February 28, 2008 8:00 AM
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Lord_of_the_rings36191007Well, we've been waiting for the details to emerge on New Line Cinema, and here they are: Warners is absorbing the studio, as a label, and company founder Bob Shaye, who can claim to be one of the longest surviving indie mavericks in Hollywood, and his co-chairman Michael Lynne, are gone. This was expected.

Here's Bewkes' memo to the Time Warner employees:

February 28, 2008

To: All Time Warner Employees

From: Jeff Bewkes

Subject: New Line to Become a Unit of Warner Bros.

This afternoon, we announced that New Line will be operated as a unit of Warner Bros. New Line will continue to retain its own brand identity and will maintain separate development, production, marketing, distribution, and business affairs operations, but it will now coordinate those functions with Warner Bros.

The combination should strengthen our company’s filmed entertainment business by combining New Line with Warner Bros.’ industry-leading position and global reach. New Line has a proud 40-year legacy of producing creative, cutting-edge entertainment. That will continue. But, given trends in the industry toward fewer movie releases, the importance of a coordinated strategy for the international and digital distribution of filmed entertainment, and the need to continue to make sure that we’re running our businesses as efficiently as possible, it made sense for us to combine our studios’ infrastructures.

Bob Shaye and Michael Lynne, the Co-Chairs and Co-CEOs of New Line, have chosen to leave the company, but we’re in discussions about possible future business relationships. Bob and Michael have a unique partnership that is noteworthy not only for its longevity, but also 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 – home to such popular films as The Lord of the Rings trilogy, The Mask, Austin Powers, Blade, Rush Hour, Elf, Wedding Crashers and Hairspray. I thank Bob and Michael for their enduring contributions to Time Warner and look forward to working with them in the future.

This consolidation will also result in changes, including the elimination of jobs at New Line. Warner Bros. is currently working through the details and will let people know how the changes affect them as soon as possible. Colleagues whose jobs are eliminated will be treated fairly and respectfully. These are very difficult decisions, but they’re important for the future success of our film studios and our company.

As always, thank you for your hard work and support as our company moves forward. I’ll continue to keep you updated on our progress.

It is confusing that Shaye and Lynne are supposedly staying on in some business relationship (it's probably a face-saving device); and that the company, which is being folded into Warners, will still do some distribution. (That likely means there are various output deals that can't be instantly severed.) Bewkes is saying that he wants to fold the New Line product into the global Warner distribution apparatus. This seems short-sighted to me--even Universal hangs on to Focus Features' flexibility to take its indie fare out territory-by-territory to just the right indie distribs.

Bewkes is still not addressing the fate of New Line/HBO's Picturehouse and the floundering Warner Independent. Warners' Jeff Bewkes knows HBO better than he does the film side. It may not be clear from looking at Picturehouse's recent boxoffice record--which involved trying to market HBO Films' output that was not geared toward competing in the Darwinish specialty marketplace--just how competent and respected inside the biz Picturehouse prexy Bob Berney is.

Fact is, Warners prexy Jeff Robinov let Mark Gill leave WIP, even after he was making a success of it, because he couldn't control Gill and was unwilling to give him the autonomy he needed. Gill wasn't playing corporate ball at the time. But Robinov replaced him with hotshot production exec Polly Cohen, who he trusted, but who has had to learn the indie biz at a time when it couldn't be more unforgiving. Robinov and Cohen see WIP as more of a production opportunity, to seek out exciting new filmmakers.

But running a specialty label is as much a marketing and distribution job as it is picking movies. And that's what Berney understands instinctively. This is the guy who discovered and took out Y Tu Mama Tambien, Whale Rider, Monster, My Big Fat Greek Wedding and handled the release for Mel Gibson of The Passion of the Christ. Most recently, Picturehouse just won two Oscars for one of the few foreign hits in recent memory, La Vie en Rose. So what if Picturehouse didn't market Rocket Science effectively? No one could.

[Here's the 40th anniversary New Line DVD.]

The full WB/New Line press release is on the jump:


For Immediate Release
TIME WARNER CONSOLIDATES FILMED ENTERTAINMENT BUSINESSES
New Line Cinema To Be A Unit Of Warner Bros. Entertainment

NEW YORK, February 28, 2008 – Time Warner Inc. (NYSE: TWX) announced today the consolidation of its filmed entertainment businesses, Warner Bros. Entertainment and New Line Cinema. The combination brings together New Line’s 40-year legacy as the world’s most successful and innovative independent film studio with Warner Bros.’ creative leadership and unparalleled scale and reach in global distribution and marketing.

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. With the growing importance of international revenues, it makes sense for New Line to retain its international film rights and to exploit them through Warner Bros.’ global distribution infrastructure. We can also take better advantage of digital distribution platforms by combining our studios. These changes will enhance our revenue opportunities and drive dramatic cost efficiencies and higher margins at New Line.”

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. 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, 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.”

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.”

About Time Warner Inc.

Time Warner Inc. is a leading media and entertainment company, whose businesses include interactive services, cable systems, filmed entertainment, television networks and publishing.

[Originally appeared on Variety.com]

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More: Hollywood, Studios, Warner Bros./New Line

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