After recent events affecting Time Warner, New Line’s parent company, the film’s theme is not without irony. For Time Warner chairman and chief executive Dick Parsons, the appearance of the activist investor Carl Icahn on the company’s shareholder register must feel like a case of life imitating art.

Billionaire Icahn, who this year has forced his way onto the board of the film-rental firm Blockbuster and acquired a small stake in the Wall Street bank Morgan Stanley, is demanding change at Time Warner — and fast.

Earlier this month Icahn disclosed that he was assembling a sizeable minority stake in Time Warner.

In conjunction with a group of US hedge funds — Franklin Mutual, Jana Partners and SAC Capital — Icahn is calling for Parsons to quadruple the $5 billion (£2.8 billion) earmarked for return to investors through a share buyback. He also wants Time Warner’s cable arm spun off and its publishing division to go the same way.

The early signs are that Icahn has the support of some of Time Warner’s institutional shareholders.

But at a meeting with Parsons in New York last week, Icahn apparently failed to secure the guarantees he was seeking.

‘The meeting was not unfriendly, but Time Warner is an $85 billion company with a respected chief executive,’ said one observer. ‘They are not simply going to lie down and accede to the demands of a short-term investor.’

Parsons is hardly a lame-duck boss. He has won plaudits for the way he restructured Time Warner in the wake of the merger with AOL, often dubbed the most disastrous corporate deal in history.

And he has also steered the company through the minefield of class-action litigation filed against AOL, announcing this month a $3 billion settlement with the Department of Justice.

But calls for media conglomerates such as Time Warner to break themselves up have become louder in recent times as investors grow impatient with stagnant share prices.

Time Warner’s stock, for example, has fallen 6.4% this year, compared with a 0.59% rise in the S&P 500 index. Time Warner declined to comment on measures it was considering to bolster the share price beyond pointing to the stock repurchase and organic investment across its portfolio.

Rival Viacom recently bowed to pressure to get its share price moving up by announcing plans to break itself up into two companies, Viacom and CBS Corporation. The first will house the music- television business MTV Networks and other assets, while the latter will consist of other television operations, the outdoor advertising- sales arm, the theme-parks business and book-publishing division.

The pressure on media companies to reinvent themselves is also manifesting itself at News Corporation, ultimate owner of The Sunday Times, where a series of acquisitions of new-media firms in recent weeks has underlined reflections by the company’s chairman and chief executive, Rupert Murdoch, that newspaper publishers have been slow to adapt to the challenges presented by the internet.

‘The media world is changing more rapidly than many of the companies assembled in the 1980s and 1990s can keep up with,’ said one analyst. ‘It’s little wonder that investors like Icahn see the opportunity to put pressure on.’

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