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TURNER-TIME WARNER EXCHANGE "I DO'S" -- NOW WHAT?
Published September 25, 1995
Time Warner Chair Gerald Levin and Turner Broadcasting Chair Ted Turner made official Friday Time Warner's $7.5B purchase of TBS, although their announcement was met with protest from Time Warner shareholder US West and the threat of a lawsuit from Comcast and Continental Cablevision, both on the Turner board. The two cable companies disagreed with the package given TCI Chair John Malone, whose Liberty Media held a 21% stake in TBS. Under the deal, TCI's cable systems will receive Turner programming at discounted prices, and TCI gets the option to buy Turner's SportSouth for $60M and Time Warner's Sunshine Network for $14M. In addition, Time Warner has agreed to issue 5 million common shares to TCI in exchange for the option to buy Southern Satellite, which distributes Turner's WTBS to cable operators (Shapiro & Robichaux, WALL STREET JOURNAL, 9/25). POSSIBLE TIE-INS: The possible "synergies" between TBS and Time Warner are examined at length by several media outlets, although representatives of the two companies were reluctant to get into specifics. USA TODAY notes that a cable channel based on Sports Illustrated is on the "drawing board" (Alan Bash, USA TODAY, 9/25). Also noted, possible book or magazine tie-ins with Turner's teams -- the MLB Braves and the NBA Hawks (AP/BOSTON GLOBE, 9/23). "SMARTER THAN A TREE FULL OF OWLS": That's Ted Turner's description of John Malone, who appears ready to assume a larger role in the cable sports world in the wake of the merger. The N.Y. POST notes that Liberty Media plans to build its string of RSNs into a "competitor for ESPN worldwide" (John Durie, N.Y. POST, 9/23). BLOOMBERG BUSINESS NEWS also notes the SportSouth and Sunshine deals were aimed at "furthering TCI's goal to piece together a national cable sports network to rival ESPN (NEWSDAY, 9/24). USA TODAY's Kevin Maney notes that Malone has two "major pushes planned": developing programming through Barry Diller and his Silver King acquisition, and building a "cable sports empire." Maney reports, "Malone says TCI might do more to add clout in sports programming but did not mention specifics" (USA TODAY, 9/25). BRAVES OFF TBS? WTBS, Turner's superstation, will likely be transformed to a basic cable network under Time Warner. Under the current set-up, TBS is offered to cable operators for nothing by Southern Satellite. Switching to basic means TBS can add subscriber revenue to its ad revenue bases, but it could also mean that Braves coverage would have to be dropped (Chuck Ross, INSIDE MEDIA ONLINE, 9/25).