CEO: Time Warner Is Committed to AOL

With no pickets, no boos and no blistering tirades, Time Warner Inc.’s annual meeting Friday was a love fest compared with the stormy gatherings that followed the entertainment giant’s ill-fated merger with America Online three years ago.

This time around, Chairman and Chief Executive Richard Parsons told shareholders that the company remained committed to the Internet operation.

Declaring that a turnaround of AOL was taking hold, he said the media conglomerate would for now “stay on the path” with the unit, which has lost subscribers in six consecutive quarters.

“If we can get it turned, it has great potential uplift,” said Parsons in an interview with reporters after the meeting at the company’s Warner Bros. Studios in Burbank.

Parsons said the board of directors had held its annual strategic review of all the company’s businesses during an all-day meeting Thursday.

As a result of last year’s strategic review, Time Warner sold its music business to reduce debt. On Friday, however, Parsons said “nothing significant” would be sold this year.

The statement doused any remaining speculation that Time Warner might unload AOL, which ended the first quarter with 24 million subscribers, down from 26.2 million a year earlier.

Speaking with reporters, the Time Warner chief said he wanted three to five consecutive quarters of growth before calling the AOL turnaround complete.

America Online remains the focus of a federal accounting probe that added to the post-merger turmoil at Time Warner, which dropped “AOL” from its name last year.

At last year’s annual meeting, AOL co-founder Steve Case stepped down as chairman of Time Warner and was reelected to the board of directors with only 78% of the shareholders’ approval. Three other directors associated with AOL also received less than 85% approval in the shareholder vote last year.

Friday’s meeting, however, was a different story. According to a preliminary count, all 13 directors, including Case, were reelected by a wide margin, with more than 90% approval.

Although Time Warner’s focus has been on reducing its debt -- down to $19 billion from $30 billion last year -- Parsons said the company was ready to build again. He reiterated Time Warner’s interest in expanding its cable TV footprint, possibly by bidding for Adelphia Communications Corp., the largest pay TV provider in Los Angeles.

Parsons predicted that Adelphia, which put itself up for sale as it emerges from bankruptcy protection, would be sold by the end of the year.

Time Warner’s stock, down 7.5% this year, closed up 34 cents Friday to $16.64 on the New York Stock Exchange.

Parsons said “Troy,” a Warner Bros. drama about the Trojan War starring Brad Pitt, would be profitable despite news reports about its high cost and a less-than-spectacular opening last weekend. He predicted that the film, which cost Warner Bros. well over $200 million to make and market, would generate “north of $100 million” in U.S. ticket sales and “two to three times that” overseas.

Parsons also said he expected the movie studio’s third “Harry Potter” offering, which will open June 4, to be one of the top 10 films of all time, as are the previous two installments.

Before the meeting, shareholders mugged for the camera with Warner Bros. cartoon characters Scooby-Doo and Tweety Bird outside the Steven J. Ross theater, where the group assembled.

At the meeting, shareholders confirmed Ernst & Young as its accountants and defeated two shareholder proposals, one relating to working conditions in China and the other on the gap between the compensation of executives and the company’s lowest-paid workers.

The lack of fireworks was just fine with Parsons, who was pummeled by angry questions from shareholders when he first became chief executive at the company’s annual meeting in New York two years ago.

“Calm is good,” Parsons told reporters.