JAPAN MAR MARKIT/JMMA MANUFACTURING PMI: 53.9 V 55.5 PRIOR (2nd straight decline)- New Export orders 52.3 v 51.5 prior in Feb.- Output index 54.2 v 58.4 prior in Feb.- Markit economist: "Firms attributed this increase in output to last minute demand before the increase in the sales tax from 5% to 8%, which is due to be implemented in April this year... It will be interesting to see whether output in the manufacturing industry will continue to grow as fast after the increase in the sales tax is implemented."
Africa’s digital money heads to Europe
The mobile payment system that has revolutionised business and banking in sub-Saharan Africa is to come to Europe as Vodafone seeks to spread the popular digital currency outside emerging markets. Vodafone has acquired an e-money licence to operate financial services in Europe, with plans to launch M-Pesa (which means mobile money in Swahili) in Romania as a first step to potential expansion in the region. M-Pesa has become so popular in parts of Africa that it is now a virtual currency, offering a secure means of payment for people who do not have easy access to banking services. A mobile phone text message is all that is needed to pay for everything from bills and schools fees to flights and fish, and means that the mobile phone can double as an office for the continent’s smaller entrepreneurs. Vodafone now hopes to win over an estimated 7m Romanians who mainly use cash. Michael Joseph, Vodafone director of mobile money, said that the European e-money license would allow Vodafone to operate M-Pesa in other markets, although he indicated that the focus would be on central and eastern Europe. "There are one or two [countries] we are looking at but [these are] unlikely to be in western Europe in the next year or so," he said, adding that countries with a large migrant population such as Italy were potential markets. There was also the chance to extend the platform into savings, loans and insurance in the same way Vodafone had done in Africa, he added. Within little more than a year of launching its M-Pesa-based loans and savings platform, M-Shwari, at the end of 2012, Vodafone’s Kenyan operator banked more than $270m. Vodafone has also considered expanding M-Pesa to countries where it has partnership arrangements with the local telecoms groups but no mobile telecoms business. In Kenya, where M-Pesa launched in 2007, the platform is so widely used that a third of the country’s $44bn economy washes through the system, sold by 79,000 agents nationwide. It has since been extended to Tanzania, Egypt, Lesotho and Mozambique. More recently, M-Pesa has been introduced in India, where Vodafone is seeing rapid growth given the large numbers of people without bank accounts. More than 1m people have registered in India, although Vodafone expects that will accelerate if revised regulations being considered by the Reserve Bank of India ease restrictions on such money platforms. The launch comes amid controversy over other digital means of payment such as Bitcoin. However, M-Pesa is not a digital currency rather a means of exchanging money already on mobile phone accounts. Romanian M-Pesa customers will be able to transfer as little as one new Romanian leu (0.22 euro cents) up to 30,000 lei (€6,715) per day. "The majority of people in Romania have at least one mobile device, but more than one-third of the population do not have access to conventional banking," Mr Joseph said. M-Pesa had about 16.8m active customers at the end of last year, generating about €900m in transactions per month. While M-Pesa was originally conceived as a means to retain customers in Kenya’s mobile phone market, it is now profitable in its own right with $143m in revenues from the 18.2m M-Pesa customers in Kenya alone, or about 18 per cent of overall country sales.
US Market closed Higher, Biotech remained volatile...Volume were on the light side @ 620mil shares...VIX @14,41 -1,44%...
Telco (+1,81%), Utilities(+1,69%), Oil&GAs(+1,59%) were best performers this week Technology(-2,66%) Consumers Services(-2,52%), Healthcare(-2,32%) & Financials (-1,50%)were worst
Macro :
- Putin Calls Obama to Discuss Diplomatic Resolution to Ukraine
- Merkel Pressed by Industry-Labor on German Energy Tax, WiWo Says
- ECB's Weidmann: ECB should only react to low inflation in the event of 2nd round effects; ECB should not overreact to a fall off in inflation which is largely due to cyclical factors
- ECB Rate Increase Seen by German Finance Ministry, Spiegel Says {NSN N38TO36S972C <go>}
Keep an eye on :
- ARL GY : Aareal Bank CFO: Improvement in bank's capital ratios may result in payment of a special dividend - G. press
- AGFB BB : Agfa CEO Reinaudo Says Company’s Prospects Improving: De Tijd
- ALO FP : Alstom Signs EU55m Turnkey Contract With Petkim for Wind Project
- AAPL US : Apple seeks $2bn from Samsung in fresh patent battle - FT
- EN FP : Bouygues Seeks Funds From Qatar to Raise Offer for SFR, JDD Says {NSN N38R4C6TTDS0 <go>}
- CNA LN : Belgium’s Ardo and Dujardin Foods Agree to Merge, Companies Say
- DAI GY : Daimler’s Mercedes-Benz Idles Brazil Truck Unit: Estado Link
- DELB BB : Delhaize to Prioritize Four Countries(US, Belgium, Greece, Serbia), discount retail in belgium was a mistake, CEO Muller Says: L’Echo
- DRI GY : Drillisch Mulls Special Dividend or Share Buyback, Welt Says
- ENI IM : Knight Vinke sells Eni stake (1%) due to uncertainty over next CEO
-GSK LN : Glaxo Plans to Build as Many as 5 Factories in Africa: Telegraph
- HOF LN : Sanpower in advanced discussions regarding takeover bid for House of Fraser - Sunday Mail
- LHA GY : Lufthansa Insists Pilot Benefits Must Be Cut, Der Spiegel Says
- LKOD LI : Lukoil Begins commercial production in Iraq's West Qurna-2 site, Sees the site as the world's second-largest untapped oil deposit - Report noting West Qurna-2 is eventually expected to reach 1.2M bpd from initial 120K bpd.
- MAB LN : Mitchells & Butlers and Greene King (GNK LN) the subject of merger rumour
- MS IM : Mediaset May Get Partner for Pay-TV After Creating New Co.: Sole {NSN N38W8X6K50Y2 <go>}
- MRK GY : Amgen Drug Cuts More Cholesterol Than Merck’s Zetia in 2 Studies {NSN N35PI66TTE0B <go>}
- MC FP : Taramax (switch swatch maker) acquired by Fendi -amount not disclosed
- MONC IM : Moncler Sees ‘Growth Scenario’ in 2014, Proposes EU0.10/Shr Div.
- NEO FP : Neopost Sees 15-20% Margins on Communication, Shipping: Investir
- NOVN VX : Novartis may spin-off company unit (poorly performing one - no details), animal health, vaccines and over-the-counter medicines mentionned by CEO Jimenez in the press earlier - Tagesanzeiger
- RCS IM : RCS to Convert Savings Shrs, Reserve Board Seats for Minority
- RDSA NA : Talevera and Aiteo, two Nigerian oil companies, have tabled the highest bid, worth USD 2.85bn, for assets owned by Shell in Nigeria
- RSA LN : RSA Insurance break-up talk follows Cevian Capital's disclosure of 7.3% stake - FT
- RWE GY : RWE, LetterOne Sign Purchase Agreement for DEA Unit, entreprise value E5.1b, Germany Won’t Halt RWE Oil-Unit Sale to LetterOne, Spiegel Says
- SAN SM : Santander CEO Marin Gets 94.5% Backing at AGM For Board Post
- SIE GY : Siemens CEO’s Russia Trip Criticized by Merkel Deputy, ARD Says
- SN/ LN : Break-up talk pushes S&N higher, according to investec, Co would be worth around 15 per cent more if it were split into three.
- TRN IM : Terna May Consider Acquisitions, Interested in Greek Asset: Sole
- UCG IM : UniCredit May Raise More Than EU1b From Selling Unit: Messaggero
- UCG IM : ICBC mulling bid for Pioneer Investment Management
- UHR VX : Swatch CEO Hayek Seeks to Expand to 1,700 Stores, NZZ Reports
Glencore closer to iron ore ambition
Glencore has cleared a key hurdle in its ambition to become an iron ore miner, reaching a preliminary deal with the west African country of Mauritania for a $1bn contract for access to railway and port facilities.
The commodities giant is keen to expand into iron ore, a key ingredient of steel and a vital source of profits from rivals Rio Tinto, BHP Billiton and Vale of Brazil. The trader is seeking to develop three big projects in Mauritania, two in partnership with state-controlled miner Société Nationale Industrielle et Minière, which has exclusively exported the mineral from the country since the 1960s.
The railway contract is one of the three key obstacles to build the remote Askaf mine. Although Mauritania, which relies on iron ore for half its exports and a quarter of its tiny $4bn economy, wants to boost iron ore production, the two parties have spent two years negotiating access to railway.
Initially, SNIM asked Glencore far too high a price for access to its railway for the next 20-25 years, according to people familiar with the negotiations. But recently both sides reached a preliminary deal, pending some final discussions.
“They have now agreed with SNIM the price to use the railway per tonne [according to] international practice,” Mohamed Ould Khouna, Mauritania’s minister of oil, energy and mines, told the Financial Times in an interview in Nouakchott.
Glencore is also close to reaching a deal for a construction contractor, clearing the second barrier. But the company is still in negotiations with the Mauritanian government about the tax terms of the operation, the final third obstacle. The tax discussions could take months, according to people familiar with the talks.
Even if Glencore solves all the obstacles in the next few months, the mine is unlikely to start shipping iron ore before the end of the decade. But Abdellahi Ould Mohamed Oudaâ, chief executive of SNIM, hailed the deal with Glencore as an important step. “It’s very rare to find a mining opportunity like this with such exceptional advantages – a rail and port that are already functioning well – that exists nowhere else in Africa,” said Mr Oudaâ.
Rio Tinto and Vale, which are building a massive rival iron ore project in Guinea, have faced multiple obstacles and delays because of the need to build a multibillion-dollar heavy-haul railway across under-developed west Africa.
The outlook for iron ore prices is clouded by the slowdown in China, the largest importer of the commodity. Iron ore prices have fallen to $110 a tonne, down from a peak of $190 a tonne reached during a shortage in 2011. But iron ore prices are still nearly 10-fold higher than a decade ago, when it traded at $12 a tonne.
Copper miner First Quantum and gold company Kinross are already producing metals in Mauritania. The country rates poorly in the World Bank’s Doing Business rankings, but the government, headed by president Mohamed Ould Abdel Aziz, has undertaken efforts to reform its economy in the past five years. SNIM remains a national treasure off limits to privatisation, however.
Glencore also has plans for two other large-scale iron ore Mauritania sites, at Guleb El Aouj near Askaf in the northeastern desert, and at Lebtheinia further west. Both are joint ventures with SNIM, while its Askaf project is a standalone development. All are held via Glencore’s subsidiary Sphere Minerals, which is listed in Sydney.
Unlike other top miners that are seeking to expand in Australia, Mongolia and Latin America, Glencore has put Africa at the core of its development.
China’s big banks double bad-loan write-offs
Signage for Industrial and Commercial Bank of China Ltd. (ICBC) stands illuminated at night in Shanghai, China, on Sunday, June 30, 2013. Chinese banks' valuations are close to their lowest on record as the nation's interbank funding crisis exacerbated investors' concern that earnings growth will stall and defaults may surge as the economy slows©Bloomberg
China’s biggest banks more than doubled the level of bad loans they wrote off last year, in a sign that financial strains are mounting as growth in the world’s second-largest economy slows.
The five biggest Chinese banks, which account for more than half of all loans in the country, removed Rmb59bn ($9.5bn) from their books in debts that could not be collected, according to their 2013 results. That was up 127 per cent from 2012, and the highest since the banks were rescued from insolvency, recapitalised and publicly listed over the past decade.
The sharp acceleration in write-offs is the latest indication of the turbulence now buffeting China’s financial system. The bond market suffered its first true default in March, two high-profile shadow bank investment products were spared from collapse by last-minute bailouts earlier this year, and a small rural lender suffered a brief bank run last week.
Data also point to a deeper economic downturn in the first quarter than expected, putting China on track this year for its slowest growth since 1990.
The deterioration has fuelled expectations that Beijing will act soon to shore up the economy. “Increasing downward pressure on the economy should not be neglected,” Li Keqiang, China’s premier, said last week. “We have policies in store to counter economic volatility.”
China’s banks built up strong defensive walls over the past decade of their turbocharged growth that are now being tested. Since they had already set aside large reserves against possible losses, they were able to double their loan-write offs without undercutting their profitability or their capital cushions.
Profits for the five biggest banks, including Industrial and Commercial Bank of China, rose 7 to 15 per cent in 2013, slower than 2012 but still healthy. Thanks to the write-offs, the banking sector’s bad loan ratio edged up just slightly last year, to 1 per cent from 0.95 per cent. However, the market valuation of Chinese bank shares shows that investors believe their bad loans might be as much as five times higher than officially reported.
Liao Qiang, China banks analyst with rating agency Standard & Poor’s, said lenders appeared to have adequate provisions for a downturn. But he expressed concern that banks were using write-offs to keep their non-performing loan (NPL) ratios artificially low.
“Some banks fear that if the NPL ratio is undesirably high, there may be some negative publicity, and so they are more active in write-offs,” he said.
This has been particularly the case with midsized lenders, which bore the brunt of a cash crunch last June when interbank borrowing rates spiked to double digit levels. Minsheng Bank, which reported its 2013 results on Sunday, said its bad-loan ratio rose to a mere 0.85 per cent last year from 0.76 per cent in 2012. But had it not been for aggressive write-offs and transfers of bad debt to third parties, Minsheng’s underlying NPL formation rate would have been 135 per cent higher, according to analysts at Citi.
Regulators have recently relaxed write-off rules to make it easier for banks to strip out bad debts, allowing them to free up space on their balance sheets to absorb a fresh wave of defaults.
Mr Liao said he expected the pace of write-offs would accelerate this year.
Hochtief seeks to increase Leighton stake
Hochtief’s A$1.2bn (US$1.1bn) bid to tighten its grip on Leighton Holdings, Australia’s biggest construction company, formally opens this week amid concerns among shareholders, analysts and trade unions about the impact of greater foreign control.
The German building group’s dramatic ousting of Leighton’s chief executive and chief financial officer this month, and its bid to raise its 58 per cent stake to 74 per cent sent shockwaves through Australia’s tight-knit business community.
ACS, the Spanish construction giant that won control over Hochtief in a hostile takeover in 2011, masterminded the coup.
The bid represents a change in strategy at Hochtief, which until recently was a passive investor prepared to let local managers run Leighton.
“The Madrid group has ridden roughshod over the rights of minority shareholders and has not got a good record on corporate governance,” said the Australian Shareholders’ Association.
Formal bid documents, due to arrive in shareholders’ postboxes on Monday, offer A$22.50 a share to acquire three out of every eight shares that Hochtief does not own.
The German group rebuffed a request from Leighton’s board to make a full takeover offer.
A partial offer for shares, rather than a full offer, would leave minority shareholders stranded holding 26 per cent of the group, said the ASA.
“They have shown disregard for a long line of independent directors in Leighton by disposing of some of the best in Australia. This is culturally insensitive when the Australian market is where the company makes most of its money.”
Between 1987 and 2010, under chief executive Wal King, Leighton expanded rapidly, becoming a conglomerate with interests spanning mining, construction, telecoms and utilities.
Last year the company generated revenues of A$22.6bn. Leighton is by far the most profitable unit of Hochtief, generating 62 per cent of pre-tax profit and 57 per cent of revenues in 2010.
But since 2010 Leighton has hit turbulence. Marcelino Fernandez Verdes, Hochtief chief executive, who formally assumed the position of Leighton chief executive last week, is the fourth person to hold the company’s reins in as many years.
“After a difficult few years for Leighton Holdings, ACS have decided to take control,” said Simon Fitzgerald, analyst at Moelis.
“Shareholders can expect to see some swift changes, as opposed to changes over time.”
Analysts said a big restructuring and asset sales were likely.
The Construction, Forestry, Mining and Energy Union has sought a meeting with Leighton’s new management on its plans for the company.
Citigroup said the change in control was likely to lead to a rapid shake-up of Leighton’s organisation, from a divisional model towards a more centralised model similar to ACS’s.
This could produce cost savings but would come with risks.
ACS’s debt pile, which stood at €5.3bn at the end of September, prompted Standard & Poor’s to place Leighton’s triple B minus credit rating on negative watch following Hochtief’s bid to tighten control.
US drive on LNG exports hit by delays
New plants for exporting liquefied natural gas from the US have been held up by regulatory delays as government agencies have failed to assess issues such as environmental impact as quickly as the projects’ backers had hoped.
European countries’ interest in importing US LNG has been sharpened by the rise in tensions with Russia, but there is still only one export project that has begun construction.
The plans are also coming under growing pressure from environmental groups.
LNG export plants need two sets of approvals: from the Department of Energy to sell gas overseas and from the Federal Energy Regulatory Commission to show that they will meet environmental, safety and other regulations.
President Barack Obama’s administration has stepped up the pace of approvals for export permits over the past 12 months, awarding six more across five sites, but approvals from Ferc have not shown a similar pick-up.
Two projects, Cameron LNG in Louisiana and Freeport LNG in Texas, had hoped to secure approval last year, but both have received their first draft environmental impact statements only this year, and face months of consultation before a decision is expected.
Another, Cove Point in Maryland, has been told it will receive its environmental assessment in May, and face further consultations after that.
None of these projects has yet finalised its financing, but analysts say that should not be a problem for plants with reliable buyers for the gas.
Cameron LNG has signed up GDF Suez of France and Mitsui, Mitsubishi and Nippon Yusen on Japan as customers and equity investors, while Freeport LNG has deals with Osaka Gas and Chubu Electric of Japan, and BP.
Frank Harris, an analyst at Wood Mackenzie, said: “For the latest wave of US LNG plants . . . the real constraint on their progress is the Ferc process.”
Lawyers who have been following the approvals process said one reason for the delays was that Ferc has to incorporate the work of several other government agencies. For example, it had to wait for the Pipeline and Hazardous Materials Safety Administration to model what would happen in the event of an LNG spill.
Giving evidence to the House of Representatives energy committee last December, Tony Clark, a Ferc commissioner, also highlighted the “significant workload increase” the regulator faced because of the LNG plants.
Bill Cooper, president of the Center for Liquefied Natural Gas, which represents exporters, said: “We’re certainly not rushing to hit the panic button. It’s a complicated process with many moving parts.”
Ferc is expected to approve the projects it is reviewing. However, campaigners against gas exports, including the Sierra Club environmental group, are likely to mount legal challenges.
Nathan Matthews of the Sierra Club said the National Environmental Policy Act compelled regulators to consider the indirect effects of the LNG projects, including the additional US gas production that would be induced by exports, which Ferc has so far failed to do.
350.org, the group behind the high-profile campaign against the Keystone XL oil pipeline, has also joined the effort to block LNG exports.
Germany would be prepared to step up its military routine operations in defense of the Baltic states - German press citing Foreign Ministry official
- German Defence Ministry may send "up to six air force planes for air policing operations to the Baltic" region.
RSA Insurance break-up talk follows Cevian Capital's disclosure of 7.3% stake
Cevian Capital, an activist investment fund, has disclosed that it now holds a 7.3% stake in the listed UK-based insurer RSA Insurance, the Financial Times reported.
The newspaper’s market report section added Cevian’s stock exchange announcement prompted talk that RSA might come under pressure to think about splitting its Canadian, Scandinavian and UK businesses.
A market report in The Daily Telegraph cited a Canaccord Genuity analyst who argued that Cevian seems likely to press for a break-up of RSA.
RSA Insurance’s share price closed 0.90p up at 89.55p in London yesterday, 28 March, giving the company a market capitalisation of GBP 3.76bn (EUR 4.54bn).
Source Financial Times, Daily Telegraph
Warner’s C.E.O. Is Bullish on the Big Screen
When a quiet and courteous DVD executive named Kevin Tsujihara ascended to the Warner Bros. throne last year, Hollywood did not know quite what to make of him.
Lacking the usual show-business personality traits — screaming, scheming, showboating — and entering from the musty world of home entertainment, Mr. Tsujihara seemed awfully corporate for a business built around creativity. He had almost no experience managing movie or television show production. And yet this low-profile son of egg distributors was given the job of steering the motion picture industry’s biggest and most storied studio.
“In the beginning,” said Robert A. Daly, a former Warner chairman, “there were a lot of people who asked themselves, ‘Kevin who?’ ”
Nobody is asking that now. Since last March, when he won a bitter succession battle to become C.E.O., Mr. Tsujihara, 49, has surprised Hollywood with bold moves that belie his nice-guy demeanor. He persuaded J.K. Rowling to expand the Harry Potter movie universe, something most people thought was a nonstarter. By hiring the flashy Fox executive responsible for “American Idol” and paying $273 million for part of Eyeworks, a Dutch entertainment company, Mr. Tsujihara moved to fix one of Warner’s most glaring weaknesses: overseas reality-TV production.
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Scenes from “Gravity,” a Warner Bros. release that won seven Oscars this year. Credit Warner Brothers Pictures
He parted ways with one film financier and instantly teamed with another, securing $450 million to make 75 movies. Earlier this month, he risked a fight with theater owners by experimenting with the simultaneous release of “Veronica Mars” in theaters and through on-demand services. And he has already duked it out — twice — with no less a force than Harvey Weinstein, who started a naming-rights battle with Warner over “The Butler” and is suing the studio over its “Hobbit” series.
The signals seem easy to read: Despite what many agents, producers and directors may have thought, Mr. Tsujihara’s reign will be anything but dull.
On one recent morning, just after breakfast with another new Hollywood kingpin, Jeff Shell, chairman of Universal Filmed Entertainment, Mr. Tsujihara sat in a stylish armchair inside his sparsely decorated executive suite in Burbank, Calif. “This was Jack Warner’s office,” he said with a grin, referring to the mogul who founded Warner in 1923. “I’m building a desk that is a replica of his desk. It’s really cool.”
During an hour-and-a-half interview, Mr. Tsujihara came across as a relaxed father (of two young children) with a passion for sports. He loves the San Francisco Giants, owns a racehorse and likes to play basketball during lunchtime at the Warner gym. He seemed to be enjoying his new rank — he recently attended a Los Angeles Lakers game with Will Ferrell — while also finding it a bit confining; he now reads so many scripts that he has less time for books. “That’s a bummer,” he said.
But mostly he wanted to talk about the future. “Warner Bros. should be setting the course, making the hard decisions,” Mr. Tsujihara said, speaking in a careful, measured cadence. “In a very difficult operating environment there are clearly opportunities.”
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“Godzilla,” a planned summer offering with Bryan Cranston and Aaron Taylor-Johnson. Credit Kimberley French/Warner Bros. Pictures Continue reading the main story
For instance, as film companies either sputter (DreamWorks Studios), cut back on production (Paramount Pictures) or lean harder on television departments (Sony Pictures), Mr. Tsujihara is betting big on cinema. There is, he said, “a real opportunity to lean into theatrical using our scale and using our distribution power.” Despite problems ranging from sky-high marketing costs to competition from video games and 50-inch flat-screen TVs, “we think theatrical can be a growth engine,” he said.
This summer, Warner will release eight movies, compared with five in the same period last year — the most of any studio. It’s an aggressive gamble that has some analysts worried; only one of the films, “Godzilla,” is a lower-risk remake or sequel. “If we were in charge of Warner’s studio, we would HIGHLY consider moving one or two of these films to later in the year or early 2015,” Doug Creutz, an analyst at Cowen & Company, wrote in a research note.
While acknowledging the risk, Mr. Tsujihara sees an opportunity to start new franchises and to send a message to Hollywood’s top writers and directors: Bring your projects to Warner, because we are not pulling back. A steadily pumping pipeline of movies also suggests an optimism about the future of home entertainment. He sees evidence that studios are starting to train consumers to buy movies digitally (big profit) rather than renting them (small profit) or watching pirated copies (no profit).
Warner also see movies as an international play — the Chinese box office grew 30 percent last year, to $3.6 billion.
Looking out a window toward Warner’s 35 sound stages, Mr. Tsujihara spoke solemnly about the pressure he feels to keep the studio’s engines firing. Home to enterprises as diverse as Batman, Bugs Bunny, “The Big Bang Theory” and TMZ.com, Warner had operating income of $1.33 billion last year, up 7.3 percent from a year earlier. Global box-office receipts for 2013 totaled $5.04 billion, the most of any studio. With 63 programs in production, Warner is the No. 1 supplier of television shows.
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“Man of Steel,” for which Warner plans a 2016 Batman-Superman movie as a follow-up. Credit Warner Brothers Pictures
“This is not a turnaround,” he said. “But I do want to run the company differently as a way to improve and grow.”
Only 14 months ago, Mr. Tsujihara was still caught up in a two-year, three-way race to succeed Barry M. Meyer, who retired as Warner’s chief executive last March. Bruce Rosenblum, the studio’s highly polished television president, was seen as the likely winner. Mr. Meyer, who led the studio for 14 years, had himself risen through the television division. Warner’s movie chief, Jeff Robinov, was a dark-horse candidate.
Mr. Tsujihara was selected over his rivals (both of whom have since left the company) in part because he had experience with the disruptive technologies that are unraveling the entertainment industry’s traditional business models. As president of home entertainment, Mr. Tsujihara labored to prop up slumping DVD and Blu-ray sales while also prodding consumers to begin buying movies digitally. He also ran the studio’s video game division and led its antipiracy efforts.
But his diplomatic skills were also crucial. In 2010, it was Mr. Tsujihara who flew to New Zealand to lead a tense negotiation that allowed Warner, Metro-Goldwyn-Mayer and Peter Jackson to proceed with the “Hobbit” trilogy. Mr. Tsujihara and his team convinced New Zealand’s prime minister to agree to a deal where the government contributed financing and agreed to introduce new labor legislation to keep production going. (A suit brought by Mr. Weinstein seeking a greater share of the “Hobbit” profits, however, continues.)
Jeffrey L. Bewkes, the chief executive of Time Warner, which owns the studio, said he saw in Mr. Tsujihara a leader who could not only force Warner’s famously siloed divisions to work more cooperatively, but could also get along with newly installed chiefs at the conglomerate’s HBO and Turner Broadcasting units.
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A scenes from “The Big Bang Theory,” the hit sitcom. Credit Michael Yarish/Warner Bros. Entertainment
Continue reading the main story
“I don’t want people sitting with their egos in their fiefdoms,” Mr. Bewkes said. “Collaboration will only make us stronger.” In a lengthy telephone interview, Mr. Bewkes went on and on about Mr. Tsujihara’s talents. “Kevin is exceeding my already very high expectations,” he said.
Mr. Tsujihara said his ambassadorial style — “behaving like a human being” is how he put it — reflected his unpretentious upbringing in Petaluma, Calif., north of San Francisco. His parents, second-generation Japanese immigrants who were forced into California internment camps during World War II, owned the modest Empire Egg Company there. The youngest of five children, Mr. Tsujihara grew up making egg deliveries. Summer jobs included sorting eggs on a conveyor belt and mucking chicken coops.
After earning an accounting degree from the University of Southern California and an M.B.A. from Stanford, he founded a business called QuickTax that went belly-up. In 1994, through contacts at Ernst & Young, he got a job at Warner managing character licensing for Six Flags theme parks, among other duties. Soon, he was climbing the rungs.
Wherever he learned the skill, his deft touch became clear to Hollywood’s creative community last September. That is when Warner announced that Ms. Rowling had agreed to adapt for the big screen her “Fantastic Beasts and Where to Find Them,” a 2001 book billed as one of Harry Potter’s Hogwarts textbooks. Three megamovies are planned. The main character will be a “magizoologist” named Newt Scamander. The stories, neither prequels or sequels, will start in New York about seven decades before the arrival of Mr. Potter and his pals.
Convincing the famously independent Ms. Rowling to dive back into film was a coup. “When I say he made ‘Fantastic Beasts’ happen, it isn’t P.R.-speak but the literal truth,” Ms. Rowling said in response to emailed questions. “We had one dinner, a follow-up telephone call, and then I got out the rough draft that I’d thought was going to be an interesting bit of memorabilia for my kids and started rewriting!”
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“Arrow,” a series shown on CW. Credit Cate Cameron/CW
She added, “When Kevin got the top job, he brought a new energy, which rubbed off. He’s a very engaging person, thoughtful and funny.”
Not everyone is such a fan. A few Hollywood players have suggested, for instance, that Mr. Tsujihara has had a successful early run largely because Mr. Robinov left behind hit movies, including “Gravity,” which took in $715 million worldwide and won seven Academy Awards. Asked about the sniping “Gravity” chatter in particular, Mr. Tsujihara said: “I don’t think it’s catty. Quite frankly, Jeff deserves the praise.”
Mr. Tsujihara faces the same daunting challenges as any Hollywood studio chief: scraping for material to make into hit television shows and movies, pushing into restrictive but booming international markets and finding ways to meaningfully cut marketing expenses, something that he called “our next big opportunity.”
But Warner also has unique puzzles. Efforts to resuscitate its Looney Tunes animation franchise have repeatedly failed to gain traction. The studio has been painfully slow to establish a slate of films based on DC Comics characters like Wonder Woman and the Flash, watching as Disney’s Marvel Entertainment churns out one superhero hit after another.
Mr. Tsujihara noted recent progress on both of those fronts. Dan Lin, a Warner-based producer, is working on multiple sequels to “The Lego Movie,” which became a surprise blockbuster last month. (Mr. Tsujihara was directly responsible, having bought a company that makes Lego-themed video games in 2007. That led to the film, which has taken in more than $390 million worldwide.)
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“The Looney Toons Show,” from Warner Bros. Animation. Credit Warner Bros. Entertainment Continue reading the main story
Four Square Blocks: Miami
Drinks are on them
An American makeover for a classic chair
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As for DC Entertainment, cross-studio collaboration to make better use of its comic book characters appears to have accelerated considerably since Mr. Tsujihara took over, in part because he eliminated some management layers. (He has not named a chief operating officer and did not replace Mr. Rosenblum and Mr. Robinov, choosing instead to divide up their duties and assume some himself.) Two new television shows are coming to the CW and Fox, including one based on the Flash and another on a young Batman, and a film series will be announced in the near future, Mr. Tsujihara said. It is expected to include a “Justice League” movie.
Underscoring his aggressive approach to the DC Comics universe, Mr. Tsujihara and Dan Fellman, Warner’s domestic film distribution chief, recently moved the studio’s untitled Batman-Superman movie — a hotly anticipated follow-up to last year’s “Man of Steel” — to a release date in May 2016 previously claimed by Marvel for one of its own films. It created an industry dust-up, and Marvel retaliated with a date change of its own. But the move sent a blunt message: Warner takes a back seat to no one.
Warner is equally determined to become more of a player in reality television, a potentially huge profit center, particularly overseas, that will require the studio to move out of its comfort zone. To lead this charge, Warner is relying on Mike Darnell, a former Fox executive who favors oddball Western wear and is known for boundary-pushing concepts like “Temptation Island.” Mr. Tsujihara said: “I want Mike to question everything and bring an entirely different sensibility.”
Mr. Tsujihara faces some succession issues of his own. Peter Roth, chief content officer for Warner Bros. Television, will turn 64 this year, according to public records. (The studio declined to provide his age.) Mr. Roth, who has deep relationships with TV producers like J.J. Abrams and stars like Ellen DeGeneres, is viewed by the industry as nearly irreplaceable. On the movie side, it is lost on no one that Sue Kroll, 53, president of worldwide marketing and international distribution, would like greater responsibilities.
“If the company is going to grow he’s eventually going to need a chief operating officer,” said Mr. Daly, the former chairman.
Mr. Tsujihara’s early track record suggests that he will figure these things out. So far, his decisiveness and evenhanded approach have earned him far more devotees than detractors.
“I don’t need to blow smoke,” said Chuck Lorre, the Warner-based creator of “Two and a Half Men” and “The Big Bang Theory.” “I trust Kevin not to make shortsighted decisions based on ego. He’s a very mature, sophisticated executive.”
The no-nonsense Mr. Lorre had one more compliment: “And he’s a nice fella.”