Murdoch joins Turner talks
Media: alliances and challenges in satellite and cable TV
Saturday 26 August 1995
Rupert Murdoch has become the latest potential partner for media mogul Ted Turner in the looming battle to control US network CBS.
According to sources close to Mr Murdoch, his News Corporation has held talks with Mr Turner and with TCI, part owner of Turner Broadcasting System, aimed at supporting a $6bn-plus bid by TBS for CBS, topping an existing offer of $5.4bn from Westinghouse.
The news follows confirmation earlier this week that Bill Gates, chief executive of Microsoft, is discussing an equity investment worth up to $2bn in TBS, in exchange for a multimedia alliance between the Microsoft on-line network and Mr Turner's news and entertainment operations, notably Cable News Network (CNN) and the MGM film library.
The investments would help Mr Turner fund his long-standing ambition to own a US TV network. Other potential partners for Mr Turner include Havas, the French media conglomerate, which is considering a $1bn investment in TBS to support a counter bid for CBS.
Mr Turner first took a run at CBS in 1985, but was foiled by Larry Tisch, the investor who now chairs the network. Mr Turner went on to buy the MGM studios, selling all but the extensive film library. The acquisition, which coincided with the large start-up costs associated with the launch of CNN in 1985, created crippling debts that almost swamped the media tycoon's empire.
Several US cable companies agreed to bail TBS out, in order to safeguard supply of Mr Turner's popular TV programming. In light of that near-failure, Mr Turner has had difficulty convincing Time Warner, which has an 18 per cent stake in TBS and strong board representation that opposition has softened in recent days.
Analysts now think TBS is clearing the decks for an all-out attack on CBS. It decided last week to abandon a long-planned $1.7bn acquisition of King World, the TV syndication company, and shelved an offer for the rump of the old MGM studio. The $5.4bn bid for CBS from Westinghouse, which has the support of Mr Tisch and the CBS board, is considered low, especially in the light of the $19bn paid by Disney for ABC.
Owning a US network would allow Mr Turner to distribute his growing library of programming with greater ease. It is also assumed a link with Mr Murdoch's News Corporation could lead to a merger of some of the two companies' news operations, CNN and Sky News.
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