Time Warner tonight announced the elevation of Jeff Bewkes to chief executive amid expectations he will radically reshape the company behind the Harry Potter films.

The promotion of Time Warner’s number two — anticipated by The Times ten days ago — is effective at the beginning of next year. The move marks 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 also take that role in due course. Mr Parsons was initially appointed as chief executive in 2002 but after Steve Case was ousted in the wake of shareholder pressure a year later he also took on the chairman's role.

An outline agreement was reached at a board meeting in London a fortnight ago, prompting expectations revealed in The Times that Mr Parsons would leave in the week following. That prospect alone was enough to lift the shares by 3 per cent at the time but reaction yesterday was more muted with the stock up 15 cents to $18.03 immediately after confirmation came through.

In fact, Mr Parson’s move upstairs was held up by contractual negotiations. Formally, Mr Parsons’ contract expires in May 2008 and discussions were focused on how that should be bought out.

Jeff 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, with television networks such as Turner Broadcasting, AOL and US cable networks completing the set. It earned $2.27 billion in the first half on revenues of $22.16 billion.

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