It was a turbulent day at New Line Cinema yesterday as president of production Michael De Luca left the company and president of music Toby Emmerich was named to replace him.

The irrepressible De Luca had spent eight years in the job, turning New Line from a successful genre company into a major hit-maker with movies such as Seven, Rush Hour, the two Austin Powers movies, The Mask, The Wedding Singer and Dumb And Dumber.

However, 2000 was a dismal year for the company with a major flop in Little Nicky and no significant box office hits; De Luca survived a disastrous year in 1996 when New Line cranked out big budget disasters such as The Island Of Dr Moreau, Last Man Standing and The Long Kiss Goodnight but obviously he couldn't survive the last year.

Production costs escalated on the long-delayed Town And Country starring Warren Beatty and Goldie Hawn and Christmas release The Lord Of The Rings, which kicks off a trilogy costing in the region of $300m, is the riskiest investment in New Line's history.

"Mike has been inextricably linked to this company for the better part of the past decade," said New Line chairman and CEO Robert Shaye and president and COO Michael Lynne jointly in a statement. "The successful films under his aegis and his creative energy, leadership and passion for film-making continue to exemplify the best traditions of New Line Cinema. But as we reached this new era in the company's history, we decided together that it was the appropriate time for change. Mike will work closely with Toby to ensure a smooth and seamless transition for the writers, producers and film-makers who have projects underway at New Line."

The statement said that the decision was "mutually decided". It also states that De Luca has an option to segue into a production pact with the studio, although nothing is conclusive.

De Luca's departure from New Line comes in the wake of the successful completion of the merger between New Line parent company Time Warner and AOL, a merger which is creating nerves at the company as to its future and insider reports of a freeze on pay rises or bonuses. New Line co-exists with sister studio Warner Bros within the Time Warner family, but talk of a Warner specialised division to compete with New Line's own Fine Line Features has once again highlighted the reality of the doubled up skillsets within the group. Furthermore, Warner's decision to release its epic wizarding fantasy Harry Potter And The Sorcerer's Stone at Thanksgiving is understood to have ruffled some feathers at New Line which is counting on its own epic wizarding tale Lord Of The Rings a few weeks later on Dec 19.

Emmerich will report to Shaye and Lynne. He joined the company from Atlantic Records in 1992 as a dual development and music executive. As president of music, he oversaw soundtracks to Next Friday, Austin Powers: The Spy Who Shagged Me and Menace II Society. He also wrote the screenplay for Frequency, a minor hit for New Line last year.