Judge Dread on Nostr: Gerald Levin, Architect of Disastrous AOL-Time Warner Merger, Dies at 84 Levin was an ...
Gerald Levin, Architect of Disastrous AOL-Time Warner Merger, Dies at 84
Levin was an attorney who worked for a year in Iran before joining HBO at its inception in 1972 as a programming executive. He was promoted to CEO a year later, and a year after that he convinced parent company Time Inc. to take HBO to cable companies nationwide via satellite technology, earning him the nickname of “resident genius.”
The Philadelphia native and University of Pennsylvania Law School graduate was elected a Time board member in 1988 and quickly helped arrange the company’s $14 billion acquisition of Warner Communications, bringing Warner Bros. and Warner Music into the fold.
Levin was named co-CEO of Time Warner along with Steven J. Ross in early 1992, then had the title for himself when Ross died 10 months later from prostate cancer.
Time Warner meandered under Levin’s early tenure, but he impressed Wall Street in 1996 by acquiring Turner Broadcasting System, thus adding CNN, TNT, TCM and Cartoon Network to the conglomerate’s growing list of assets. The merger also returned to Warner Bros. rights to its pre-1950 movies, which Turner had purchased years earlier, and it made media mogul Ted Turner a board member and primary Time Warner shareholder...
In the late 1990s, Levin figured, correctly, that the Internet would forever alter the way media was delivered and sought a dramatic way in for Time Warner, which had stumbled with its own lackluster digital initiatives like Entertaindom and Full Service Network.
After months of negotiations between Levin and AOL CEO Steve Case, they agreed to merge the two companies, with 55 percent going to AOL’s shareholders and 45 percent going to Time Warner’s. The latter company was far bigger in every metric (annual revenue, for example, was $27 billion vs. $5 billion) except for one: market capitalization, which is the value Wall Street put on each of the company’s shares.
By the time the merger was announced in early 2000, AOL’s 17 million subscribers already were growing impatient with slow, dial-up internet providers, and soon they’d be fleeing in droves for high-speed cable providers like Time Warner Cable, owned then, of course, by Time Warner.
After the merger, Levin pledged that synergies and the internet’s rapid growth would quickly lead to $40 billion in revenue and $11 billion in cash flow for the newly minted AOL Time Warner. However, a bursting stock bubble, falling ad rates and the terrorist attacks of Sept. 11, 2001, devastated the company.
Levin stepped down as CEO of AOL Time Warner in May 2002, replaced by Richard Parsons, and that year the company reported a $100 billion loss, the largest in the history of corporate America. A year later, Parsons removed AOL from the company name.
hollywoodreporter.com/business/business-news/gerald-levin-dead-architect-aol-time-warner-merger-1235852261/
Levin was an attorney who worked for a year in Iran before joining HBO at its inception in 1972 as a programming executive. He was promoted to CEO a year later, and a year after that he convinced parent company Time Inc. to take HBO to cable companies nationwide via satellite technology, earning him the nickname of “resident genius.”
The Philadelphia native and University of Pennsylvania Law School graduate was elected a Time board member in 1988 and quickly helped arrange the company’s $14 billion acquisition of Warner Communications, bringing Warner Bros. and Warner Music into the fold.
Levin was named co-CEO of Time Warner along with Steven J. Ross in early 1992, then had the title for himself when Ross died 10 months later from prostate cancer.
Time Warner meandered under Levin’s early tenure, but he impressed Wall Street in 1996 by acquiring Turner Broadcasting System, thus adding CNN, TNT, TCM and Cartoon Network to the conglomerate’s growing list of assets. The merger also returned to Warner Bros. rights to its pre-1950 movies, which Turner had purchased years earlier, and it made media mogul Ted Turner a board member and primary Time Warner shareholder...
In the late 1990s, Levin figured, correctly, that the Internet would forever alter the way media was delivered and sought a dramatic way in for Time Warner, which had stumbled with its own lackluster digital initiatives like Entertaindom and Full Service Network.
After months of negotiations between Levin and AOL CEO Steve Case, they agreed to merge the two companies, with 55 percent going to AOL’s shareholders and 45 percent going to Time Warner’s. The latter company was far bigger in every metric (annual revenue, for example, was $27 billion vs. $5 billion) except for one: market capitalization, which is the value Wall Street put on each of the company’s shares.
By the time the merger was announced in early 2000, AOL’s 17 million subscribers already were growing impatient with slow, dial-up internet providers, and soon they’d be fleeing in droves for high-speed cable providers like Time Warner Cable, owned then, of course, by Time Warner.
After the merger, Levin pledged that synergies and the internet’s rapid growth would quickly lead to $40 billion in revenue and $11 billion in cash flow for the newly minted AOL Time Warner. However, a bursting stock bubble, falling ad rates and the terrorist attacks of Sept. 11, 2001, devastated the company.
Levin stepped down as CEO of AOL Time Warner in May 2002, replaced by Richard Parsons, and that year the company reported a $100 billion loss, the largest in the history of corporate America. A year later, Parsons removed AOL from the company name.
hollywoodreporter.com/business/business-news/gerald-levin-dead-architect-aol-time-warner-merger-1235852261/