Time Warner, the media giant, announced the elevation of Jeff Bewkes to the chief executive’s job, amid expectations that the new leader will radically reshape the company behind the Harry Potter films and the CNN news network.

The promotion of Time Warner’s number two — anticipated by The Times ten days ago — takes effect at the beginning of next year, marking the end of the five and a half year tenure of Dick Parsons, who had battled to keep the group intact in the wake of the disastrous AOL merger.

Mr Parsons is staying on as chairman for an unspecified period, although it is likely that Mr Bewkes will succeed to that role in due course. Mr Parsons began as chief executive only in 2002, taking the chairman’s job in addition after Steve Case was ousted a year later.

His departure was agreed in outline at a board meeting in London a fortnight ago, prompting expectations that Mr Parsons would leave in the week following.

At the time, that prospect was enough to lift Time Warner’s shares by 3 per cent. Yesterday the shares gained as much as 3.2 per cent early in the day after the appointment was confirmed but ended slightly lower at $17.81.

Mr Parsons’ move upstairs was held up by contractual negotiations. Formally, his contract expires in May 2008, and discussions focused on how that should be bought out, although the exact agreement is yet to be made public.

Mr Bewkes gave a hint that he would look critically at Time Warner’s mix of businesses. Careful to praise Mr Parsons as a man who “accomplished much to restore Time Warner’s stature as the world’s leading media and entertainment company”, he added: “We have a lot to do, and I’m intensely focused on building shareholder value.”

Time Warner’s businesses are grouped in five divisions, ranging from the Warner Brothers and New Line film studios, to the Time Inc magazine division. CNN and other television channels comprise the third division, with AOL and US cable networks completing the set. Time Warner earned $2.27 billion in the first half, on revenues of $22.16 billion.

Dick Parsons took over the company from Gerry Levin as it became apparent that the “deal of the century” tie-up with AOL had failed because the online company’s revenues were wilting as consumers deserted its dial-up system in favour of broadband always open access to the internet. He sold off the poorly performing music business, but otherwise held the group intact, although the stock still trades at about $18, its level when he took over.

Mr Parsons, who was the first African-American to run a major media company, began his career working for Nelson Rockefeller, the liberal Republican. There is speculation that he may consider running to be Mayor of New York when the tenure of the incumbent, another former media boss, Mike Bloomberg, expires in 2009.

Mr Bewkes has been the anointed successor for several years, although his promotion is controversial to those hoping for a radical departure from before. He made his name running HBO, the paid-for cable service, at a time when it made The Sopranos and Sex and the City, but he was most recently chief operating officer and a board member.

Thomas Egan, an analyst at Oppenheimer & Company, said: “I don’t think there will be immediate impact to operations, although I do think that Jeff is less sentimental about the current structure of the company. I think he will be more driven by the results than by strategy.”

What Time Warner owns

AOL (internet services provider)

Time Warner Cable (second-largest cable operator in the US)

Home Box Office (subscription-only television network)

Turner Broadcasting System (operator of CNN, Cartoon Network and others)

New Line Cinema (film company, maker of The Lord of the Rings trilogy)

Warner Bros. Entertainment (film and TV giant)

Time Inc. (publisher of 130 magazines)

Time Warner Investments (takes stake in media start-ups)

Source: timewarner.com

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