Time Warner deserves the top spot in one of its glossy weeklies as the unsexiest media company alive. In five years under chief executive officer Jeff Bewkes, the owner of Warner Brothers, HBO and People magazine has delivered investors a 70-per-cent return, keeping pace with its wheeling and dealing media rivals. The longer-term question is whether Mr. Bewkes can continue to make boring beautiful.
His 20th set of quarterly results, released on Wednesday, exemplifies Time Warner's approach. Revenue was flat, but adjusted operating income still grew 16 per cent. The company expects earnings per share to increase at least 10 per cent in 2013, suggesting improved film box office, TV advertising and carriage fees for its networks.
Mr. Bewkes lived through the empire-building era that culminated in Time Warner's epically destructive merger with AOL. That might explain why early in his tenure as CEO he hived off the company's cable operations and AOL to refocus on movies, magazines and TV shows.
As a result, the buzz surrounding content like HBO's Girls and Oscar-nominated Argo is louder than for the company itself. Yet the total return for Time Warner's stock with Mr. Bewkes at the helm dwarfs the 16 per cent investors could have achieved with the S&P 500 index, according to Datastream. The shares have performed in the middle of the media pack, beating News Corp. and Viacom but lagging Disney and CBS.
Time Warner isn't exactly standing still by shopping its shiny New York headquarters, slashing publishing jobs and installing a new studio boss. Competitors, however, are making more radical changes. News Corp. is carving out newspapers and CBS is separating billboards. Mr. Bewkes has done smaller deals like Flixster that add up to some $3-billion, but Disney splashed out more than that on each of Marvel and Lucasfilm alone.
For now, Time Warner sees the best value in its own shares. A new $4-billion buyback plan follows last year's $3.3-billion program. Slow advertising growth and pressure on TV margins could eventually force Mr. Bewkes to make bolder moves. Spinning off the magazine division or buying full control of Central European Media, for example, could titillate shareholders without being so provocative as to compromise Time Warner's unsexy appeal.