| AOL Time Warner Inc. (AOL) executives, at a retreat to discuss turnaround strategies, hotly debated whether to drop "AOL" from the corporate name, as the world's largest media group tries to rebuild its business, sources familiar with the matter said on Friday.
AOL Time Warner Chief Executive Richard Parsons has said the company has no plans to change the name.
Investors and some executives have been advocating for months to drop "AOL" from the group's name as the America Online division, once viewed as the crown jewel, has dragged down overall growth.
The meeting of 150 executives held over the last two days, which also touched on strategies to meet the company's 2003 financial targets and included questions about asset sales and other issues at hand, is the first time all these executives have met together.
For months, the online unit has endured slowing subscriber growth and federal probes into its accounting, leading some to question the whole concept of the original $106.2 billion merger that married AOL with the traditional media businesses of Time Warner.
Since then, AOL Time Warner has grappled with a record net loss of nearly $100 billion in 2002, a share price that has fallen about 70 percent in two years, and a forecast for little overall earnings growth this year.
The company, which has contended with clashing corporate cultures since the merger, has had a series of key resignations in recent months. In January, AOL Time Warner Chairman Steve Case -- the last key architect of the merger -- succumbed to investor pressure and said he would leave, followed by the decision by outspoken media mogul Ted Turner to resign as vice chairman.
The management retreat, which had been planned for some time, was something Parsons had wanted to address those "at the frontlines" and to bring together executives who often do not spend much time in the same room together, sources said.
Executives, gathered at a hotel in Manhattan, participated in panels about innovation, for example, discussed strategies to meet its financial targets and to cut debt and listened to leadership advice from former U.S. Gulf War commander Norman Schwarzkopf, one source familiar with the meeting said.
The meeting comes as AOL Time Warner's management tries to regain credibility on Wall Street, repair relations among its ranks, cut its $26 billion debt load, and find ways to build momentum for a turnaround.
One decision reached at the retreat was to rule out a combination of its CNN news channel with Walt Disney Co.'s ABC News, saying that a combination would be too problematic to pursue.
Questions about possible asset sales also emerged on Thursday, said one of the sources, who had close knowledge of the discussions.
Jeff Bewkes, chairman of AOL Time Warner's entertainment and networks group, told executives at the retreat that CNN was not for sale but if a high-priced offer surfaced, as with anything else, it would have to be considered, the source said.
Parsons has said a top priority is cutting the company's $26 billion debt and has said AOL Time Warner would consider sales of non-core businesses, from its books publishing group, to stakes in Comedy Central and Court TV and its sports teams.
Bankers and consultants have speculated the company could eventually consider selling other assets if it still needs cash -- from Warner Music to CNN, but those options have been characterized as highly unlikely.
But the pressure has been on for AOL Time Warner to do something about its music arm given the sickly state of the industry. One source close to the companies told Reuters last month Warner Music has held informal talks with rival EMI Group Plc about renewing negotiations over a range of possible links.
Shares of AOL Time Warner rose 11 cents to $10.26. | |
