Jeff Bewkes

Jeff Bewkes
Born	Jeffrey Lawrence Bewkes 1952-05-25May 25, 1952 (age 74) Paterson, New Jersey, U.S.
Nationality	American
Education	Deerfield Academy Yale University (B.A., philosophy, 1974) Stanford Graduate School of Business (M.B.A.)
Alma mater	Yale University
Occupation	Media executive
Years active	1979-2018
Employer	Citibank HBO (1979-2002) Time Warner (2002-2018)
Title	Chairman and chief executive officer, Time Warner Inc.
Term	2008-2018 (CEO) 2009-2018 (chairman)
Predecessor	Richard Parsons
Successor	John Stankey (as head of WarnerMedia)
Known for	Chairman and CEO of Time Warner CEO of HBO during The Sopranos era Spin-offs of AOL, Time Warner Cable and Time Inc. Sale of Time Warner to AT&T
Spouse	Susan Frank Kelley Margaret Lowry Brim Lisa Carco (m. 2017)
Children	2

Jeffrey Lawrence Bewkes (born May 25, 1952) is an American media executive who served as chairman and chief executive officer of Time Warner. He was chief executive from January 1, 2008, until June 15, 2018, president from December 2005, and chairman of the board from January 1, 2009.

Bewkes spent more than two decades at HBO, joining when it was a small unit of Time Inc. and serving as its chief executive from 1995 to 2002. During that period he presided over the network's shift from a service showing films and boxing to a producer of original drama, a change associated with The Sopranos, Sex and the City and The Wire, and he roughly tripled its profits.

As chief executive of Time Warner he reversed the conglomerate strategy that had defined the company since its merger with AOL in 2001. He separated Time Warner Cable and AOL in 2009 and the magazine publisher Time Inc. in 2014, leaving a company built around three content businesses: HBO, Warner Bros. and Turner. In 2014 he rejected an $80 billion approach from 21st Century Fox, and in October 2016 he agreed to sell Time Warner to AT&T for $85.4 billion, a transaction completed in June 2018 after the United States Department of Justice unsuccessfully sued to block it.

Total shareholder return at Time Warner during his tenure was approximately 260 percent, ahead of the S&P 500 over the same period. His public dismissal in 2010 of Netflix as a competitive threat, in which he compared the company to the Albanian army, became one of the most frequently quoted misjudgments in the history of the media industry.

Early life and education

Family and childhood

Jeffrey Lawrence Bewkes was born in Paterson, New Jersey, on May 25, 1952, the middle of three sons of Marjorie Louise Bewkes, née Klenk, and Eugene Garrett Bewkes Jr., an executive at the consumer products conglomerate Norton Simon Inc. He is of Dutch and German ancestry.

The family lived in Darien, Connecticut, and Bewkes attended Deerfield Academy in Massachusetts.

Yale and Stanford

Bewkes graduated from Yale University in 1974 with a bachelor's degree in philosophy rather than in economics or a professional subject. Contemporaries have described a student more drawn to the arts than to business. The guitarist Gary Lucas, later a collaborator of Captain Beefheart, said that at Yale in the early 1970s Bewkes fell in with "lunatic fringe types and free thinkers." Bill Moseley, another college friend who went on to a career in horror films, said, "I think of him as an artist first and foremost."

After graduating he worked briefly in documentary production for NBC News, then took a Master of Business Administration at the Stanford Graduate School of Business. He subsequently worked at a vineyard in Sonoma, California, before moving to New York as a commercial banker in Citibank's shipping lending unit.

He has served on the advisory boards of both Yale and Stanford.

Career

HBO, 1979-2002

Early roles

Bewkes left Citibank for HBO, then a small subsidiary of Time Inc. and a business whose commercial viability was not yet established. His first responsibilities were unglamorous: persuading hotels to subscribe to the service. He later became sales director responsible for the launch of Cinemax, HBO's companion channel.

He was appointed chief financial officer of HBO in 1986 and president and chief operating officer in 1991.

Chief executive of HBO

Bewkes became chief executive of HBO in 1995 and held the position until 2002. The period covers the transformation that established HBO as the most influential television brand in the United States.

The network's original programming under Bewkes moved decisively away from films, boxing and stand-up comedy toward original scripted drama and comedy. The Sopranos began in 1999, Sex and the City in 1998, Six Feet Under in 2001 and The Wire in 2002. The strategy rested on a proposition that a subscription service, unencumbered by advertisers and by broadcast content standards, could commission work that networks could not, and could charge for it directly.

Bewkes tripled HBO's profits during his tenure. The commercial model, in which a premium subscription funds a smaller volume of higher-cost programming, became the template that streaming services later adopted, and the phrase "It's not TV, it's HBO" summarised a positioning he helped establish.

Time Warner, 2002-2018

Rise to the top job

In 2002 Bewkes became chairman of Time Warner's entertainment and networks group, taking responsibility for HBO, Warner Bros., New Line Cinema and the company's cable networks. He was appointed president and chief operating officer in December 2005, serving as the principal deputy to the chairman and chief executive Richard Parsons.

In January 2006 Bewkes and Leslie Moonves of CBS Corporation brokered the agreement that combined the CBS-owned UPN network with Time Warner's The WB to form The CW, consolidating two loss-making broadcast networks into a single venture.

Bewkes was selected as Parsons's successor and became chief executive of Time Warner on January 1, 2008, adding the chairmanship on January 1, 2009.

Dismantling the conglomerate

Bewkes inherited a company still suffering from the consequences of the AOL Time Warner merger of 2001, generally regarded as the most value-destructive corporate transaction in American history. The combined company had written off tens of billions of dollars, and its share price stood far below the levels of a decade earlier.

His central strategic judgment was that the conglomerate structure did not create value and that the constituent businesses were worth more apart than together. He executed the separation over six years.

Time Warner Cable, the cable distribution business, was separated in March 2009. AOL was spun off to shareholders in December 2009, formally ending the merger. The magazine business, Time Inc., publisher of Time, Fortune, Sports Illustrated and People, was separated in June 2014.

What remained was a focused content company comprising HBO, Warner Bros. and Turner Broadcasting, the owner of CNN, TNT, TBS and Cartoon Network. Bewkes argued that content ownership, rather than distribution or publishing, was where durable economic advantage lay in the industry.

Rejecting the Fox approach

In July 2014, a month after the Time Inc. separation completed the restructuring, 21st Century Fox made an approach to acquire Time Warner at $85 per share, valuing the company at approximately $80 billion.

Bewkes and the board rejected the offer as substantially undervaluing the company and declined to enter negotiations. Rupert Murdoch withdrew the bid the following month. The decision was contentious at the time, with some shareholders arguing that the premium should have been accepted, and the Fox price became the benchmark against which Bewkes's subsequent decisions were measured.

Sale to AT&T

In October 2016 Time Warner agreed to be acquired by AT&T in a cash and stock transaction valued at $85.4 billion, or $107.50 per share, a substantial premium to the price Fox had offered two years earlier. Bewkes announced in July 2017 that he would leave on completion.

The transaction was a vertical merger, combining a major distributor of television and wireless services with a major producer of content. In November 2017 the United States Department of Justice filed suit to block it on antitrust grounds, arguing that the combined company would be able to raise prices for rival distributors seeking access to Turner's networks. The case was the first significant vertical merger challenge brought by the federal government in about forty years, and it proceeded to trial before Judge Richard Leon of the United States District Court for the District of Columbia.

Judge Leon ruled for the companies in June 2018 without imposing conditions, and the merger closed on June 14, 2018. Bewkes departed the following day. Time Warner was renamed WarnerMedia and placed under John Stankey.

The outcome vindicated Bewkes's rejection of the Fox bid in price terms. It was less favourable for the acquirer: AT&T divested the business in 2022 into a combination with Discovery, at a substantially lower valuation, an outcome widely regarded as one of the least successful large acquisitions of the period.

Financial performance

Time Warner's total shareholder return, including dividends, rose by approximately 260 percent between Bewkes's appointment as chief executive in January 2008 and the completion of the AT&T transaction in June 2018, outperforming the S&P 500 over the same period. The company also returned substantial capital through share repurchases and dividends, and the separations released value that had been obscured within the conglomerate structure.

The Netflix misjudgment

Bewkes's best-known public statement concerns Netflix. Asked in December 2010 whether Netflix posed a threat to the established television business, he replied by comparing the proposition to the Albanian army taking over the world.

The remark reflected a widely held industry view at the time. Netflix was then primarily a distributor of licensed content, including a large volume of Time Warner material, and its subscription revenues were small relative to the cable ecosystem. Bewkes's broader argument was that the owners of content would retain pricing power over any distributor.

The judgment proved wrong in an important respect. Netflix used the licensing revenue that studios including Warner Bros. supplied to fund original programming, built a global direct subscriber relationship, and by the end of the decade had displaced the cable bundle as the central economic structure of television. The Spectator wrote in December 2020 that the answer deserved to be recorded as one of the all-time misjudgments and that Bewkes's operating model had been replaced by Netflix's subscription streaming model, at a cost of billions of dollars to Time Warner shareholders.

The assessment is contested. Time Warner did launch HBO Now, a standalone streaming service that did not require a cable subscription, in 2015, several years ahead of comparable moves by other traditional media companies. Defenders argue that Bewkes recognised the direction of the market but concluded that Time Warner lacked the scale to fund a global streaming build on its own, which was among the reasons for selling to AT&T. Critics respond that this was precisely the strategic failure: the company had the content but not the will to accept the losses that a transition would require.

Other roles

Bewkes served as one of the chairs of Media.NYC.2020, a review commissioned on behalf of New York City mayor Michael Bloomberg that examined the future of the global media industry, its implications for New York City, and the steps the city government might take in response.

He has appeared before congressional committees and in industry forums on media consolidation, and testified in support of the AT&T transaction during the antitrust proceedings.

Management approach

Bewkes was known for an analytical and unsentimental approach to portfolio questions, and for a willingness to reverse the strategy of his predecessors. Where the conglomerate logic of the 1990s held that scale and vertical integration across content, cable and internet would produce synergies, Bewkes concluded that the combination had produced conglomerate discount instead, and he acted on that conclusion at considerable scale.

At HBO he was associated with a permissive approach to creative talent, granting showrunners unusual latitude and accepting that a proportion of commissions would fail. He described the network's economics as depending on a small number of programmes that subscribers would not cancel, which justified spending far more per hour than advertising-supported television could.

His public manner was measured and often dry, and he gave relatively few interviews for an executive in the media industry.

Personal life

Bewkes lives in Greenwich, Connecticut. He has been married three times.

His first wife was Susan Frank Kelley, a law firm managing partner specialising in trusts and estates; they had one son. His second wife was Margaret Lowry Brim, a former real estate broker with the William B. May Company who had earlier worked as a television producer and as an aide to the ABC president Roone Arledge; they also had one son.

In 2017 he married Lisa Carco, principal of Square One Communications and Design, a marketing communications and digital design agency serving pharmaceutical and healthcare clients.

External links

• Appearances on C-SPAN