At Warner Bros., new CEO's first task is to bring peace to studio

At Warner Bros., new CEO’s first task is to bring peace to studio

By Ben Fritz and Meg James, Los Angeles Times

Jan. 28, 2013 12 AM PT

In taking the reins of Warner Bros., one of Kevin Tsujihara’s first tasks will be returning calm to a studio that has been racked by divisions and infighting.

Although Warner was Hollywood’s No. 1 supplier of television shows, No. 1 in the home video market and No. 2 at the box office last year, the rivalry between Tsujihara and two other executives for the top job created tensions on the studio’s Burbank lot and uncertainty among its partners throughout the entertainment industry.

On Monday, as word spread that Tsujihara had been named chief executive, many in Hollywood immediately began asking what his appointment would mean for the two rivals: Television Group President Bruce Rosenblum and Pictures Group President Jeff Robinov.

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Experts said that lingering resentments are an unavoidable outcome of the public two-year competition that Jeff Bewkes, CEO of parent company Time Warner Inc., held for the studio’s top spot.

“One of the reasons a lot of people don’t recommend this process is you end up winning with one executive and losing with the others,” said Edward Lawler, a professor at USC’s Marshall School of Business. “You can try to keep the people who lose out by changing their titles or giving them more money, but it’s not easy to retain them.”

Tsujihara said in an interview that he hoped both Rosenblum and Robinov would stay with Warner and expressed an openness to reshaping the studio in a way that could give both more responsibility.

“I think that over the coming weeks we’re going to continue conversations about defining their roles and defining the organization in a way that makes sense for the company,” he said. “They’re both talented executives and both are my friends.”

One of the reasons that Tsujihara was selected, according to company insiders, was that Bewkes and Warner Chairman Barry Meyer, who is retiring at year’s end after 14 years at the helm, decided that a power-sharing arrangement would be untenable.

“There always has to be a boss,” said Bob Daly, former Warner chairman who left the studio in 1999 after nearly two decades on the job.

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With his lack of experience in TV and film production, and relatively few relationships with creators in both fields, Tsujihara will need to rely on Robinov and Rosenblum to succeed in his new job.

Although Tsujihara gets along well with Robinov, he has developed a contentious relationship with Rosenblum in recent years, according to numerous people who know both but were not authorized to speak publicly. Tsujihara said such accusations were “overblown.”

The TV group produces just over half of Warner’s profits, which had led many inside and outside the studio to believe Rosenblum had the inside line for the top job. In a statement, he conceded he was disappointed but said, “Warner Bros. is a unique and special place and I know it will be in good hands with Kevin at the helm.”

Some have speculated that when Rosenblum’s contract expires in August, he might seek a new position within Time Warner or, more likely, outside the company.

Robinov did not address his own feelings in a statement, saying only that he and Tsujihara “are both good friends and colleagues and I think he’s an excellent choice for the job.”

But Robinov previously has made no secret of his desire to run a studio and could bolt if he were able to secure such a position elsewhere.

Among the three, Robinov and Rosenblum have clashed the most. If Robinov or Rosenblum would have landed the top job, the other would have been likely to leave.

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“By the first of the year, everyone will be rowing in the right direction,” Daly predicted. But “any time you take a company that has been so stable and make a major change, there could be other effects.”

Executives at Warner learned of the decision Monday. Some allies of the two losing candidates were disappointed after being told the results by Meyer. But the prevailing feeling appeared to be relief that the new CEO has the professional background and personal skills to rise above the long-running fray.

“I think Kevin is a stabilizing choice,” said a senior executive who requested anonymity because the person was not authorized to speak publicly. “It gets us away from worrying about the film division vs. the TV division. It allows us to focus on moving forward instead of treading water and stagnating.”

Added another: “Kevin is perhaps the most likely to extend olive branches and collaborate.”

Tsujihara will also face a number of strategic challenges that the studio has been unable to resolve in part because of the uncertainty over who would be its leader. They include signing new contracts of key executives who report to Robinov and Rosenblum and trying to renew a deal with financing and production partner Legendary Pictures, which expires at the end of this year.

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