"That was very much business as usual," said Mr. Goodman, a 17-year Turner veteran. The new deal has brought changes at a faster pace. The Turner division is suddenly no longer a cable-only operation and now includes properties conceived of outside of Ted's domain. The newly installed chief executive was not mentored by Mr. Turner and has no experience running a news operation such as jewel CNN. And Mr. Turner himself has been forced to take a drastically reduced role, holding the murky title of vice chairman and senior adviser.
In March, the new company moved to do what Time Warner had opted not to: place The WB broadcast network and the Turner basic-cable fleet (CNN, TNT, TBS, Cartoon Network) under the same operating division and leadership (WB founder and Chairman Jamie Kellner). Combined ad selling and cross-promotion opportunities were the goal in a move to merge two cultures: one led by Hollywood's Mr. Kellner, the other fostered by Atlanta's Mr. Turner.
"We'll see a blending of the cultures, with what's hopefully best from each of the businesses being what ends up being dominant throughout the company," Mr. Kellner said.
"[AOL Time Warner executives are] not looking to rip the guts out of CNN or out of any Turner property," CNN's Mr. Goodman said. "Bob Pittman has publicly said, `Let's make the numbers,' but there are ways to do that and revenue levers we have, as well as expense levers that we have that don't hurt our ability to gather news or report the news."
Turner, like every other division, has aggressive growth targets for this year. The division reportedly has been targeted to grow operating profit by 39% in 2001. But in a difficult ad market, that may prove challenging and could lead to frustrated Turner executives. An AOL Time Warner spokeswoman declined comment.
"We are a fresh set of eyes coming in to look at a business and, where appropriate, cuts should be made because it's economically right for the business," Mr. Kellner said. "We will do that, but there's no broad mandate down the line from me that you have to cut this or cut that just to cut budgets. It will be about making the company the right size, based upon the business that we project into the future."
Besides the ad-supported Turner networks, AOL Time Warner also has its HBO unit, which operates movie channels HBO and Cinemax that rely on subscription revenue. The unit is run separately from Turner under the leadership of Chairman-CEO Jeff Bewkes. HBO has seen its popularity surge with weekly dramas "The Sopranos" and "Sex and the City" helping to drive subscription revenue. HBO and Cinemax had 36.7 million subscribers in 2000.
The local cable systems business, which includes digital cable and high-speed modem subscriptions, had a strong first-quarter showing, with revenue climbing 12% to $1.6 billion. The bulk of that-$1.5 billion-came from subscriptions, with most of the rest coming from local advertising. AOL Time Warner added 400,000 digital subscribers in the first quarter and 237,000 high-speed Road Runner subscribers.
Total Q1 Revenue $1.7 bil, up 6%
EBITDA* $449 mil, up 34%.
AD, COMMERCE REVENUE $589 mil, up 1%
Turner Broadcasting System
Management Jamie Kellner, chairman-CEO; Garth Ancier, exec VP-programming; Bradley J. Siegel, president, General Entertainment Networks; Joe Uva, president, Turner Entertainment Sales; Larry Goodman, CNN president, ad sales and marketing; Jed Petrick president-chief operating officer, The WB
Properties TBS Superstation, TNT, CNN, Cartoon Network, The WB
Programs Atlanta Braves baseball , NBA, "Larry King Live," "The Powerpuff Girls," "Dawson's Creek," "Felicity."
Management Jeffrey L. Bewkes, chairman-CEO
Properties HBO, Cinemax
Programs "The Sopranos"
Total Q1 Revenue $1.6 bil, up 12%
EBITDA $768 mil, up 15%
Ad, commerce revenue $117 mil, up 17%
Management Joseph J. Collins, chairman -CEO
* earnings before interest, taxes, depreciation and amortization