Home > Views > Blogs > Market Movers > Why Shutter When You Can Sell?
PRINT
RSS
SHARE
TEXT SIZE:
Send a copy to me

Separate multiple email addresses (max 20) with commas.

0/1500
Letters are not case-sensitive, disregard spaces.
captcha image
Try a New One
This helps us prevent automated registrations and spamming.

Main
How the Credit Crunch Hits NYC Renters   Why is Insider Trading Illegal?
May 9 2008 5:56AM EDT

Why Shutter When You Can Sell?

Warner Brothers is closing down its two art-house production companies, Picturehouse and Warner Independent Pictures, with the loss of about 70 jobs. The idea, according to Warner's Alan Horn, is that "between both New Line and main Warner's, we had the pieces in place to release any movie we want".

But why not sell Picturehouse and Warner Independent Pictures rather than just closing them down?

Maybe they're really crap studios, and no one, not even the current management, would be interested in buying them - in which case the real reason for closing them down is surely just that they're losing lots of money and have no realistic prospect of making money in future. Or maybe the amount of money that Warner could get for the studios is so small that it's not worth the effort to sell them. That would be sad, and tantamount to laying off 70 people just to save a couple of minor executive headaches.

Then again, 70 people is small beer in the world of film-studio layoffs: when New Line was absorbed into Warner Brothers, there were 600 job losses. And there might be more to come:

Mr. Horn says the decision to shutter the two divisions was made by him, Barry Meyer, the CEO of Warner Bros., and a handful of other top studio executives, and wasn't ordered by Mr. Bewkes. Getting the movie business in shape is vital for Time Warner, however. If Mr. Bewkes spins off Time Warner Cable and AOL, as many expect him to, Warner Bros. will become a key driver of the company's earnings down the road.

If that's true, then eventually Warner is going to have to make money by making movies. In the meantime, however, it looks as though it can make more money by shuttering studios.

See more in

Loading...


Recent Blog Posts

Archive

May 2008



Also in Portfolio.com
Most Emailed
Recently Commented