The FTC negotiated an agreement to allow Time Warner and
Turner Broadcasting to merge and create the world's largest
entertainment conglomerate. The $6.5B merger still requires
shareholder approval and the FTC is expected to vote on final
approval in the next few weeks (Mult., 7/18).
NO TO MALONE? A key sticking point had been the role of TCI
Chair John Malone. Under the original structure, TCI, the
nation's top cable operator, was to get 9% of Time Warner with
"shares placed in a trust to be voted by Time Warner Chair Gerald
Levin." TCI has now agreed its Time Warner shares will be non-
voting. Time Warner also agreed "not to discriminate against
other programming when buying programs" for Time Warner Cable,
and they are "reportedly on the verge of a major deal" to carry
Fox's all news channel (AD AGE, 7/18). The settlement also
cancels a previous deal to give TCI a 15% discount on Turner
programming for 20 years. It also bars Time Warner from tying
the sale of HBO to sales of Turner programming, such as CNN.
Time Warner insiders expect Malone to press for additional
compensation for "elements he surrendered" (Gruley & Shapiro,
WALL STREET JOURNAL, 7/18). Turner Chair Ted Turner will end up
owning 10% of Time Warner. Bradley Stillman, of the Consumer
Federation of America: "When the deal closes Ted Turner has
taken over Time Warner. He will be the vice chairman and the
heir apparent. ... He may be a maniac but so far all the bets
have fallen his way" (NEWSDAY, 7/18).
HOW ABOUT THE TEAMS? The transaction will leave Time Warner
with many decisions, with the fate of the Braves and Hawks "up in
the air" (WALL STREET JOURNAL, 7/18).
