Icahn's Overwrought Time Warner Assault

Not only did Parsons start a buyback, but he just issued the first dividend since the merger. This sends a message to the market: "OK, people, I'm done satisfying the debtholders, now its time for me to focus on the shareholders." Parsons did a great job with the debtholders. Now we should all just relax and let him do his thing with the shareholders.

As to spinning off the cable division completely, I reiterate, one step at a time. He's spinning off 16% to the public shortly. The rest could easily follow. If he tried to spin off the entire thing, he probably wouldn't get as high a price. Then he'd have activists accusing him of selling the cable company at a fire sale price, which brings us to the latest missive. Let me rebut this point by point.

WMG and Comedy Central Sold at Fire Sale?

In retrospect it's easy to say these two were sold on the cheap. But Parsons, probably correctly, saw the long-term writing on the wall of the music industry and decided to bail before it got any worse. Music sales were declining and Time Warner's stock was certainly not being helped by having WMG under its umbrella. So regarding WMG: Good riddance.

Comedy Central is a tougher call. Let's not forget that Comedy Central was created in the courtroom when Viacom(VIA.B Quote) and Time Warner were engaged in a bitter lawsuit involving the Comedy Channel (owned by TW) and the Hah! Channel (owned by Viacom) back in the 1990s. Parsons has been actively trying to simplify the structure of Time Warner's units (getting rid of the other shareholders of Time Warner Entertainment for instance, and cleaning up cable by spinning it out) and this was part of that strategy. I was definitely surprised he sold off Comedy Central, because it's been somewhat of a gem in the cable lineup, particularly in the past few years. However, this was part of his overall strategy of cleaning up Time Warner.

Directors and AOL?

The implicit question here is: Should Parsons be fired, since he voted for the deal.