Media king Time Warner Inc. said Thursday its Warner Bros. Entertainment studio would swallow whole its New Line Cinema unit. The independent studio was the hugh production company responsible for some of the best SF and genre-related movies in the last four decades, most notably Peter Jackson’s “The Lord of the Rings” trilogy.
One time New Line founder Robert Shaye and his co-chief executive, Michael Lynne will leave the studio.
“New Line has been our respective life’s work as well as our second family,” Shaye and Lynne said in a joint statement. “While we’re sad to be leaving, we’re enormously proud to have overseen its extraordinary growth.”
New Line will maintain separate development, production and marketing departments but will integrate those functions with its new parent division to cut costs and improve profitability, Time Warner said.
The biggest reason for the merger decision was to allow New Line to take better advantage of the growing international and digital distribution contracts of Warner Bros., the company said.
A perfect example would be New Line’s “The Golden Compass.” This bloated budget fantasy film only made $70 million in the United States since February 24. However, on the international market it garnered over $261 million. While that looks like a rosey picture, Warner/New Line only saw limited benefits from the huge overseas take because it had to sell those distribution rights to various other companies. With New Line in its new position the studio will be able to reap almost all of those monetary rewards up front; not having to share the wealth with smaller distributors, thereby continuing the ever-growing Time Warner conglomerate in the industry.
Bad Time Warner.
No eating your subsidiary companies!