Time Warner cuts costs, absorbs New Line Cinema

Time Warner Inc announced that it is consolidating its two film studios, Warner Brothers and New Line Cinema, putting an end to the latter's 40-year run as an independent film studio. New Line Co-Chairmen and Co-Chief Executives Robert Shaye and Michael Lynne decided to leave the company, Warner says.

The absorption of the legendary movie studio, behind successful movie franchises such as "The Lord of the Rings," "Austin Powers" and "A Nightmare on Elm Street," will lead to a massive lay-off of a large portion of the 600 staff at its Los Angeles and New York facilities. Interestingly enough, the studio is to release today the basketball spoof "Semi-Pro" starring Will Ferrell.

This is just the last of a series of similar moves in the movie industry. The legendary Metro-Goldwyn-Mayer was grabbed by a group led by Sony Pictures and Comcast Corp. DreamWorks SKG, founded by Steven Spielberg, Jeffrey Katzenberg and David Geffen (thus SKG), was sold to Viacom Inc. and absorbed as a part of Paramount Pictures. Harvey and Bob Weinstein's Miramax Films nearly disappeared when swallowed by Walt Disney Co.