Time Warner, Turner Broadcasting work on deal

September 01, 1995|By New York Times News Service

NEW YORK -- As Ted Turner left New York for his ranch in Montana, lawyers for Turner Broadcasting System Inc. and Time Warner Inc. continued to negotiate a deal yesterday in which Time Warner would acquire Mr. Turner's company.

One executive close to the discussions said the two companies and Tele-Communications Inc., a key shareholder in Turner, had "agreed to the rough outline of a deal." But other executives cautioned that the fine points of an agreement would take several more days to work out.

"Momentum is building," said one executive familiar with the talks. "But we're not quite there yet. The devil is in the details."

One devilish detail, people close to the talks said, is that Time Warner Chairman Gerald Levin has begun to encounter resistance from senior executives, who are worried that Mr. Turner could end up with too much control at Time Warner after a merger.

Under the proposed deal, Mr. Turner would become the vice chairman of Time Warner and would oversee the properties of Turner Broadcasting, which include CNN, TBS, Castle Rock Entertainment and the Atlanta Braves baseball team.

In the last two days, though, Mr. Levin and Mr. Turner have discussed broadening Turner's portfolio to include Home Box Office, two people familiar with the talks said. They have also spoken of appointing a Time Warner executive as Turner's chief operating officer.

That has prompted objections from HBO Chairman Michael J. Fuchs, who recently added the title of chairman of Time Warner's music division. Mr. Fuchs has been regarded as a possible successor to Mr. Levin as chairman. Other pending issues involve Turner and Tele-Communications, the giant cable operator that is the archrival of Time Warner's cable systems, which owns 21 percent of Turner.

Tele-Communications President John C. Malone still seeks several concessions in return for endorsing the deal, according to people involved in the talks.

Among other things, Mr. Malone has been pushing for Turner to award the pay-television rights for films from its New Line Cinema unit to Encore, a premium cable service owned by a Tele-Communications affiliate. New Line, which Turner acquired in 1993, has recently released several box-office successes, including "Dumb and Dumber."

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