Fending off Rupert Murdoch may have been the easy bit for Time Warner (TWX). The company in which HBO gets all the love has plenty of challenged cable properties, from CNN and TNT to TruTV. One step in rejuvenating those brands involves a staff cut of 10 percent—about 1,475 jobs—at Time Warner’s Turner Broadcasting unit.
The reorganization is part of an initiative, dubbed Turner 2020, designed to “focus resources and prioritize investment” across the cable channels, the company said in a news release. The job losses affect 18 Turner offices worldwide, with the brunt of the cuts expected in Atlanta, where the division is based. About 150 positions will also be added as Turner seeks to make more money online and to invest in additional areas. In August, Turner offered buyouts to about 600 longer-term employees.
Turner is Time Warner’s most profitable business unit, though its revenue growth has lagged behind that of HBO. Since he took over in January, Turner Chief Executive Officer John Martin has been shuffling programming ranks, with two programming executives leaving their roles over the past seven months. In the spring, meanwhile, Time Warner CEO Jeff Bewkes specifically criticized TNT’s programming as less compelling for younger TV viewers because it had not taken sufficient creative risks, compared to programs such as AMC’s (AMCX)Breaking Bad and FX’s The Bridge.
Turner is working to alter the programming mix at TNT and TBS, shifting from today’s 30 percent original programming to about half in the coming years. This is seen as key to attracting younger viewers, who have drifted from the channels. The company is also doubling down on professional basketball, having signed a nine-year deal extension Monday with the National Basketball Association. The agreement will add a dozen regular season games to TNT’s schedule and give Turner fresh NBA content for its sports website, Bleacher Report. Even CNN boss Jeff Zucker has been turning to additional non-news programming to help revive ratings at the news channel, whose executives are increasingly talking up their online prospects as compared to those of Fox News, which trounces cable-news rivals in broadcast ratings.
The goal is to boost Time Warner’s financial performance for investors, avoiding the type of unwanted overtures the company received over the summer from Murdoch’s 21st Century Fox (FOXA). Given HBO’s potential and the consistent TV and film programming pumped out by Warner Brothers—not to mention the value of its catalog—Time Warner could easily draw further suitors.
Last month, Time Warner’s chief financial officer, Howard Averill, highlighted Turner as the company’s largest potential financial opportunity during his remarks at a Bank of America Merrill Lynch investor conference. “I think when a lot of folks look at the company, they look at Turner; I think they often underestimate or miss the fact that there’s opportunities,” Averill said. “For example, in terms of just reinvigorating our networks, I think there’s real upside there—or in capitalizing and pursuing on some under-monetized opportunities like our kids business.”