Warner Bros. Absorbs New Line

Despite a catalog of films that includes the blockbuster Lord of the Rings franchise and the recent CG-laden fantasy flick The Golden Compass, New Line Cinema has been operating as an independent film studio for the past 40 years. That will change with Time Warner Inc.’s announcement that it will consolidate its filmed entertainment businesses. The company will fold New Line into Warner Bros., making it an offshoot that will handle genre fare.

New Line will maintain separate development, production, marketing, distribution and business affairs operations, but will closely integrate and coordinate those functions with Warner Bros. to maximize film performance and operating efficiencies, achieve significant cost savings, and improve margins. New Line co-chairmen and co-CEOs Robert Shaye and Michael Lynne are leaving the studio, but are leaving the door open for possible future business relationships. It’s been reported the nearly 600 New Line employees will be let go.

Time Warner president and CEO Jeff Bewkes comments, ‘We are moving quickly to improve our business performance and financial returns. New Line has built a strong franchise of cutting-edge entertainment. We can enhance its value by combining it with Warner Bros. Given the trend toward fewer movie releases, New Line and Warner Bros. will now have more complementary release slates, with New Line focusing on genres that have been its strength.’

New Line got a big boost in the 1980s from the popular Nightmare on Elm Street horror franchise, and went on to release the hits The Mask, Austin Powers: International Man of Mystery, Blade, Rush Hour, Elf, Wedding Crashers and Hairspray, among ohers. The unit is currently concerned with releasing the Sex and the City movie and a big-screen adaptation of J.R.R. Tolkien’s The Hobbit, with Peter Jackson producing and Pan’s Labyrinth helmer Guillermo del Toro attached to direct.