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It's shake-up time again in a Hollywood executive suite.

Venerable Warner Bros. cohonchos Robert Daly and Terry Semel have decided to leave the studio at year's end, company Time Warner announced today. The two will stay on through the run of their current contracts, which expire December 31.

"For some months now, we have been giving careful thought to the possibility of pursuing new professional challenges and opportunities," Semel and Daly said in a joint statement. "...Having started our unique partnership together here two decades ago, we have decided it is appropriate for us to leave together as well."

News of the Daly/Semel exit was first leaked this morning on the Hollywood Reporter's Website. Their decision, revealed to Time Warner chair Gerald Levin Wednesday night, left executives "stunned," the trade paper said.

The departure announcement comes on the eve of the release of one of Warners' brightest hopes for commercial (and critical) success, Eyes Wide Shut.

While the old "pursue new opportunities" line is usually a cover for "pushed out the door," that doesn't appear to be the case with Daly and Semel. Revenues for Warners' film, TV and music divisions hit $10 billion last year--the movie studio, in particular, was on an upswing.

"I am deeply saddened by Bob and Terry's decision to leave Time Warner," Levin said, denying there was any friction between Semel, Daly and him.

Daly and Semel are Hollywood's longest-tenured studio chiefs. Their sturdy, 20-year reign even survived the dark, dark days of 1997-98 when Warners released one big-budget dud after another: The Postman, Midnight in the Garden of Good and Evil, Mad City and The Avengers, among others.

While 1999 brought still more stiffs (chiefly, Clint Eastwood's True Crime), it also brought a welcome hit: The Matrix, the sci-fi thriller with Keanu Reeves. Wild Wild West has been another money-maker, if a big-time money-spender, as well.

And anticipation is clearly strong for Stanley Kubrick's Eyes Wide Shut, starring Tom Cruise, Nicole Kidman and a digitally altered orgy scene.

For the last four years, Daly and Semel also have been in charge of Warners' music division.

Daly joined Warners in 1980; Semel in 1975.

(ORIGINALLY POSTED at 6:10 a.m. on 7/15/99)