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CORPORATE REPORT: REAX TO FTC CONCERN OF LATEST MEGADEAL
Published May 8, 1996
The FTC refused to respond to a report in yesterday's WASHINGTON POST that the agency's staff has recommended blocking or modifying the proposed merger of Time Warner with Turner Broadcasting (AD AGE ONLINE, 5/8). TBS Chair Ted Turner told the ATLANTA CONSTITUTION, "The deal goes through. We haven't done anything wrong." But privately, execs from both companies "said they expected a bumpy ride to approval." The so-called "sweetheart deal" to TCI Chair John Malone appears to have federal officials "most concerned." The CONSTITUTION also notes if the merger falls through, Turner is still expected to sell the company, with NBC, News Corp., MCA and Viacom likely bidders (Haddad & Unger, ATLANTA CONSTITUTION, 5/8). The N.Y. TIMES foresees two sets of talks: between the government and Time Warner, and between Time Warner and its partners, notably TCI (Mark Landler, N.Y. TIMES, 5/8). Gene Kimmelman of the Consumers Union says the Turner-Time Warner deal is "totally different" from Cap Cities/ABC and Disney because of the cable element. Kimmelman: "We are serving almost half the country with these two cable systems [Time Warner and TCI] and you have them owning four of the top 10 cable networks, plus HBO" ("Business Insiders," CNBC, 5/7). NEWS CORP. REPORT: Rupert Murdoch's News Corp.'s fiscal third-quarter net income dropped 69% due to a charge of $155M related to the sale of its educational book publishing business. Without the charge, net income would have dropped 3% to $211M, reflecting TV programming costs and losses at Asia's Star TV (WALL STREET JOURNAL, 5/8). OTHER NEWS: A federal judge tossed out a lawsuit that had accused Comcast of overcharging customers in franchise fees (PHILADELPHIA DAILY NEWS, 5/8)....Prodigy's management team, led by CEO Edward Bennett, will acquire the company from IBM and Sears for about $100M. Still, one analyst calls the online service "a lost cause" (Kara Swisher, WASHINGTON POST, 5/8). The WALL STREET JOURNAL puts the price at less than $200M and calls the deal a "fire sale transaction" (Bart Ziegler, WALL STREET JOURNAL, 5/8).