Parsons parses prospects for TW

Time Warner topper hits back at Icahn, Redstone

By BEN FRITZ

Parsons

Icahn

In a busy appearance in downtown L.A. on Tuesday, Time Warner's Dick Parsons dissed Carl Icahn and Sumner Redstone, while stating he sees theatrical windows completely collapsing one day and that he doesn't want to sell AOL.

Comments came just a week after Icahn, the corporate raider and major TW shareholder, hired Lazard Ltd. to formulate a new strategy for the conglom and field a slate of directors to implement it at the next annual meeting. Parsons said he's waiting to hear a positive idea from Icahn for the company.

"Carl and I agree that the stock is undervalued," Parsons said to reporters before a speech to civic group Town Hall Los Angeles. "I don't think he has any great ideas and I'm not even sure he thinks he does. That seems to be why he's hiring (Lazard topper) Bruce Wasserstein to come up with some."

It was the first swipe the TW topper has taken publicly since Icahn made his aggressive moves last week.

In a related event Tuesday, Time Warner board member Robert C. Clark resigned from the board of Lazard, eliminating an obvious conflict of interest and making clear that his loyalties lie with Parsons.

Icahn has been on a months-long campaign to try to pump up the share price of Time Warner, which, like other media congloms, has been stagnant for the past few years.

Strategies to reverse that trend were on the mind of many at Tuesday's event, where Parsons made clear he doesn't favor Redstone's approach of splitting up a media conglom's assets. In fact, Parsons said he still believes big is better.

"My prediction is that in time, you're going to see those who tried to disaggregate to be nimble and efficient re-aggregating," he said in an obvious swipe at the split-up of Viacom into two companies. "No sooner will the ink be dry than each will try to build itself in its former image."

Parsons seemed more in tune with recent statements from Disney topper Bob Iger, signaling a similar but less aggressive stance on collapsing distribution windows. Iger told the Wall Street Journal that he wants to compress the window between theatrical and DVD releases and that it may include taking on theater owners "by force."

"Windows are inevitably going to collapse over time," Parsons told reporters. "I don't know if everything will be day and date. But managing that transition in a way that is respectful of our distribution partners is the challenge."

Parsons added that while he does see digital technology transforming the distribution of film, he thinks it's still a long way off. "When we owned Warner Music, people were predicting the Internet was going to imminently replace CDs," he noted. "That day is still three to five years away."

For now, however, Time Warner's digital strategy is focused on AOL, which is widely reported to be in talks with competitors MSN and Google about a strategic partnership.

While denying speculation the conglom might sell AOL, Parsons did acknowledge ongoing talks with major Net players and said the focus was the booming online advertising biz.

"(AOL) came a little late to the advertising side of the party," he explained. "We're talking to people about how we can kickstart that business."

Parsons seemed pleased at the amount of heat on a division many once considered responsible for the near undoing of Time Warner.

"The (acquisition) deal with AOL was mainly a case of terrible timing," he admitted. "But people are seeing now what I have always believed: that AOL is not an albatross around our neck but a valuable part of our business."