• by Wayne Friedman , Staff Writer, September 14, 2005

Time Warner doesn't really believe the industry's current refrain--that media consolidation is dead. It wants to stay together for the long road trip. Time Warner Entertainment Chairman Jeff Bewkes told financial analysts that there was health in its cable and content businesses--no doubt sending a message to rogue financier Carl Icahn, who wants the company to spin off its cable operating units, and to buy back stockholders' shares.

Not that the company doesn't see value in selling off the company--somewhat. It wants to spin off about 20 percent of the cable unit after it completes the Adelphia systems transaction with Comcast. Time Warner will then dominate in New York and Los Angeles. That has been the cable division's strength for years--getting bigger in big markets. Thus, the rumor that Time Warner has been eyeing Cablevision Systems' Long Island, New York and other Tri-state operations.

Time Warner wants to keep it together, perhaps because it has little else in its TV pocket. Bewkes touted HBO and Turner Networks as strong components. But the company doesn't have a full-fledged broadcast network to use as leverage.

According to Daily Variety, Bewkes said: "There's some benefit, if you're in the network business, of having cable distribution when you go to other integrated companies for distribution."

The honest assertion comes down to this: Time Warner is no Viacom. It can't split itself into two neat companies. Therefore, it cannot participate in the new media unconsolidated world. It needs every advantage for its balance sheet and shareholder wealth.

The problem for Time Warner still stems from that division which brought down the house: AOL. If there is spinning to do, there's been the suggestion that AOL might be the way to go. Of course, AOL would never be the kind of value that other Internet companies--Yahoo! or Google--receive. One financial analyst said the best that could be done with AOL is something one does with hitchhikers that were inadvertently picked up for that extra-long car ride down the highway: Leave them by the side of the road.