SBD/8/Sports Media

CORPORATE REPORT: REAX TO FTC CONCERN OF LATEST MEGADEAL

     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).
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