AOL Time Warner
Shares of Time Warner (TWX, Fortune 500) are up almost 6% this year, as the advertising market continues to rebound. But the comapny's stock lost 3% Wednesday, as the broader stock market tumbled.
The company bought back 28 million of its shares for $1 billion during the second quarter, bring the year's total to 65 million shares for $2.3 billion so far this year, double the pace of share buybacks in 2010.
Time Warner's report comes a day after rival CBS (CBS, Fortune 500) said that its profit more than doubled from a year ago quarter, topping forecasts, as sales rose nearly 8% and also beat estimates.
Viacom (VIAB, Fortune 500), which reports Friday, is also expected to post higher profit compared to a year earlier. News Corp. (NWSA,Fortune 500), which has been embattled in a hacking scandal, reports next week, as does Walt Disney Co. (DIS, Fortune 500)
Capital Group Gordon Crawford :
Investigation notes: Why is there no wikipedia on gordon crawford?
Gordon Crawford b. 1947
Senior Vice President at Capital Research, Portfolio Adviser for Global Discovery Fund. Also fund manager of the smallcap world fund, Inc, the Growth Fund of America, and the New Economy Fund. He ran Capital Group from approximately 1995 to 2005. At Capital Group he ran the Media Investments for the Americas Fund. In 2002 he fought to have Steve Case fired as CEO of AOL Time Warner.
Education M.B.A. Darden School Bachelors from Wesleyan University
Current Positions: Senior Vice President Capital Research and Management Company Chairman Southern California Public Radio Senior Vice President and Director American Funds Insurance Series - Global Small Capitalization Fund Senior Vice President American Funds - The New Economy Fund 1992-Present Vice Chairman and Principal Executive Officer Smallcap World Fund, Inc 2003-Present Vice-Chair The Nature Conservancy
(Updates stock values in 1st, 2nd, 16th and last paragraphs,
adds naming of Parsons as chairman today in 9th paragraph.)
Los Angeles, Jan. 16 (Bloomberg) -- Money manager Gordon
Crawford's holdings in AOL Time Warner Inc. shed $3.65 billion in
value since mid-2001, securities filings show, and he pinned a lot
of the blame on Chairman Stephen Case.
So it wasn't a huge surprise that Case resigned this week
after a four-month campaign by Crawford, senior vice president of
Capital Research & Management Co., the New York media company's
biggest investor with a stake worth about $4.59 billion. AOL
shares rose 6 cents today to $15.30.
Los Angeles-based Crawford has used his financial clout
before to make a point. In 2001, he dumped all his 66 million Walt
Disney Co. shares in displeasure over Chief Executive Michael
``He's not afraid to flex his muscle,'' said William Harding,
a Morningstar Inc. analyst who covers American Funds. ``He's been
around the media block for more than 30 years.''
Crawford, 55, heads media investing at publicity-shy Capital
Research's American Funds, the third-largest fund company behind
Fidelity Investments and Vanguard Group with assets of more than
``Capital Research and Management is a sea of anonymity,''
said Burton Greenwald, an independent fund consultant in
Philadelphia. ``They try very hard to submerge the individual.
He's the only one I could point to with a high profile.''
Crawford, who doesn't give interviews, has a proven record as
an investor. Growth Fund of America, his biggest fund at $34
billion, has beaten more than 97 percent of other growth funds for
the past three, five and 10 years, according to Morningstar. It
fell 22 percent last year, faring better than 87 percent of such
funds Morningstar tracks.
`Personal' or Business?
Though AOL weighed down Crawford's fund, Steve Case suggested
the fund manager also had a ``personal'' reason for pushing him to
``I think he was more emotional about it because his son
works at one of our divisions,'' Case said in an interview. AOL
Time Warner's board today named CEO Dick Parsons to succeed Case
as chairman when he steps down in May.
Few believe parental concern over son Jeffrey, 35, a Warner
Bros. sales executive, swayed Crawford, who declined to comment.
``I don't think this was over me,'' said Jeffrey, who has worked
at Warner Bros. since 1996.
Crawford joined Capital in 1971 after graduating from the
University of Virginia's business school, focusing early on media
stocks and the cable-television industry in its infancy.
``He knows the business incredibly well,'' said Michael
Burns, vice chairman of Lions Gate Entertainment Corp., a
Vancouver-based film studio. ``He's one of the great media
investors of all time.''
Like other managers at American Funds, Crawford has shown
he's a long-term investor. ``When he takes a position, he takes a
real position,'' said Burns, whose company is now 7.7 percent
owned by Crawford's funds. ``He doesn't just buy a few hundred
thousand shares, he really gets involved.''
His actions at AOL Time Warner demonstrate as much. Crawford
advocated the AOL Time Warner merger in January 2001, according to
people familiar with the situation, and promoted Ted Turner's
earlier sale of his Cable News Network to Time Warner.
Crawford first asked Case to resign last August, a person
familiar with the situation said. AOL Time Warner stock hit a four-
year low of $8.70 on July 25 after the company said regulators
were investigating America Online's accounting for some
advertising. He and Turner, AOL Time Warner's vice chairman,
indicated they'd vote against Case as chairman at the next
shareholder meeting in May, the person said.
In June 2001, when AOL traded at $53, Capital Research held
96.8 million shares worth $5.13 billion. Those shares are now
worth $1.48 billion, a $3.65 billion drop. Crawford continued
buying as the shares fell: he more than doubled his stake to 300
million shares in the six months ended Sept. 30, according to
Securities and Exchange Commission filings.
``AOL's clearly been a dent in the performance of their
funds,'' said Harding, noting that Crawford and his company like
to buy out-of-favor shares. ``At American Funds, they'd hold them
forever if they could.''
Crawford had iron-willed determination even as a youth, said
older brother Duncan, a former Wall Street trader. As a prep
school freshman and would-be hockey goalie, Gordy Crawford fielded
his brother's best shots for hours in their parents' garage in
``He could barely see the puck as it came in,'' said Duncan.
``He got pretty beat up, but hung in. He wanted to learn. He was
like a human backstop.''
Taking a Bow
It might have provided training for life as a fund manager.
``The last couple of years, he's gotten whacked just like
everybody else,'' said Lions Gate's Burns, who meets Crawford once
a quarter to go over long-term plans. ``Gordy's view is, you stick
to your knitting and you pound away.''
In addition to Turner and John Malone, chairman of Liberty
Media Corp., Crawford's associates over three decades of financing
media businesses now range from USA Interactive Chairman Barry
Diller to Viacom Inc.'s CEO Sumner Redstone and President Mel
For his part, Case accepts some blame for AOL Time Warner's
woes. ``At the end of the day, I was the architect of the
merger,'' he said. ``The stock price went down -- I take credit
By that yardstick, Crawford can also take a bow. After Case
announced Sunday that he was resigning, AOL shares rose 42 cents
this week -- giving the company's biggest investor a paper gain of
about $126 million.