Credit: Shutterstock photoTime Warner TWX has been one of the best performing stocks in what has been a tumultuous New Year so far. The world's fifth-largest media conglomerate has gained over 8% in 2016, led by a variety of news and rumors.
The main factor that seems to be driving this movement is renewed speculation that Time Warner might be up for sale. Last year, Comcast CMCSA dropped a $45 billion takeover bid, and since then investors have been hungry for a buyout.
Earlier this month, rumors swirled that Apple AAPL was interested in purchasing Time Warner , and now it appears that AT&T is eyeing the company as a potential way to increase its media holdings.
On top of these acquisition rumors, Time Warner investors have speculated that the company might be gearing up to spin off some of its wholly-owned entities. But what are these entities? How do they operate?
In an effort to prepare investors for what appears to be an important period in the history of Time Warner, we've compiled a complete guide to everything owned by the media giant.
First, we need to understand a bit about the history and structure of Time Warner. The company as we know it now was created after the merger of Time Inc. and Warner Communications in 1990. It would further expand with the purchase of Turner Broadcasting in 1996.
The company is split into three main divisions. These divisions operate basically independently and focus on different things. By looking at what goes into each division, we get the entire scope of Time Warner. These divisions are:
Home Box Office Inc.
Home Box Office, or HBO as it's more commonly known, is a subscription-based premium television service that broadcasts TV shows and movies. HBO rose to prominence by being one of the first premium channels to air uncensored, full-length movies.
These days, HBO is more notable for its original programming. Among these programs are Game of Thrones, Boardwalk Empire, True Blood, and Veep. By creating its own TV shows, movies, and documentaries, HBO paved the way for companies like Netflix NFLX and Amazon AMZN to make their original programming today.
Home Box Office Inc. also operates HBO Documentary Films, HBO Sports (best known for its pay-per-view boxing events), the on-demand service HBO Go, its over-the-top streaming option HBO Now, and premium TV channel Cinemax.
Turner Broadcasting
As mentioned before, Turner Broadcasting was purchased by Time Warner in 1996. As its name implies, Turner handles most of Time Warner's cable broadcasting work. Tuner operates channels such as CNN, HLN, TNT, TBS, and Cartoon Network.
Turner is probably most notable for its Turner Sports broadcasting coverage. Turner Sports, which covers games in the National Basketball Association, Major League Baseball, and NCAA tournament, holds broadcasts on a wide range of Turner's stations.
One of the most interesting things about Turner is its partnerships with the NBA and MLB. Turner has teamed up with the NBA to run the league's own NBA TV channel, and Turner also partners with the MLB to run the MLB Network.
Warner Bros.
Possibly the most recognizable of the three divisions, Warner Bros. has been one the biggest names in movie production for decades. Through its own studio, as well as its subsidiaries like New Line Cinemas and Castle Rock, Warner Bros. is always pushing out some of the biggest films in the world.
Examples of Warner Bros. movies include the Harry Potter franchise, The Dark Knight (and all DC Comics films), and American Sniper . Warner Bros. also has its hand in interactive entertainment, TV, animation, and home video. The company also owns half of the CW Television Network.
Bottom Line
It seems like all three of these divisions have been the subject of spin-off rumors recently, but Turner Broadcasting is probably the most plausible option at this point.
The possible takeover bids are also just rumors, but they are helping drive this stock upward. If a buyer is on the horizon, it's important for consumers to know exactly what will be impacted.
Currently, Time Warner has a Zacks Rank #2 (Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
