Turner welcomes $7.5bn Time Warner embrace


New York

Media giant Time Warner bought Turner Broadcasting System, the owner of CNN, last night in a $7.2 billion (pounds 4.7 bn) deal which will confirm the combined group as the world's largest entertainment empire. Time lost the trophy just weeks ago when Walt Disney bid for the US television broadcaster Capital Cities-ABC.

Yesterday's deal is the latest in a series of mega takeovers and mergers which is dramatically changing the face of the US entertainment industry and its influence worldwide.

But the agreement - a month in negotiations - ran into immediate trouble with US West, the telecoms company which holds a 25 per cent stake in Time Warner's cable business. US West said it would sue to block the merger, claiming that it breached a partnership agreement. The Time-Turner deal will fuse Time Warner's portfolio of music, cable television, publishing and film-making activities with Turner Broadcasting's own range of interests including the Cable News Network (CNN), the Cartoon Channel, two Hollywood studios and the Atlanta Braves football team.

Combined, the two companies are expected to generate revenues that in 1994 would have reached $19.8 billion, compared with $16.5bn for Disney- and Capital Cities-ABC.

For Gerald Levin, Time Warner chairman, the merger is a significant coup, even if its promised benefits are still unproven. Mr Levin has been under heavy pressure to act to lift the fortunes of Time Warner, which has seen its own share value languish recently and has a fearful $16bn in debt.

Most eyes yesterday, however, were on Ted Turner, the flamboyant founder and driving spirit of Turner Broadcasting once known as Captain Outrageous. He is to become a vice-chairman of Time Warner, with rights to designate two board directors, one of whom will be himself. He will also be in charge of all the businesses that are now in his company, CNN, and will oversee Time Warner's Home Box Office cable movie channel.

Asked at an analysts' meeting how he felt about going from being founder and boss to the position of vice-chairman, Mr Turner, whose wife is the actress Jane Fonda, said: "As long as I'm involved in vice, I'm happy."

He added: "I'm tired of being little all the time, I'm nearing the end of my career. I want to see what it's like being big for a while - a chance to see the world from a different place, instead of from the basement, from the penthouse."

Under the deal, Time Warner will buy all of the 82 per cent of Turner Broadcasting that it does not already own in a stock-purchase operation that will be tax-free to the share owners. The company will issue up to 178 million new shares to finance the acquisition. Most Turner shareholders will receive three Time Warner shares for each four Turner share.

The market barely reacted to the news that the marriage was official. But Wall Street media-watchers seemed impressed. "It's a real positive", said William LeFevre, a media analyst at Ehrenkrantz King Nussbaum. "It may take a while for this to gel but it makes Time Warner a much more interesting participant."

The Justice Department is expected to scrutinise the deal for anti-trust implications.

The main obstacle in the negotiations was the fate of the 21 per cent of Turner held by Liberty Media, a subsidiary of the cable giant, Tele- Communications Inc. TCI will hold a 9 per cent stake in Time Warner, but only a 5 per-cent vote, to reduce the risk of triggering anti-competitive objections from the government. The deal was structured to ensure that it would win the support of John Malone, the TCI chairman, and fit with his business plans.

Turner will sell to Liberty its SportSouth interest, a regional sports cable channel, and TCI will have guaranteed access to the programming made by the Turner divisions once folded into Time Warner.

In recent months, Mr Levin, as a major Turner Broadcasting shareholder, repeatedly stymied efforts by Mr Turner to buy one of the three US networks.

Suggested Topics

Actress sees off speculation about her appearance in an amazing way

Arts and Entertainment
Serge Pizzorno of Kasabian and Noel Fielding backstage at the Teenage Cancer Trust concerts
musicKasabian and Noel Fielding attack 'boring' musicians
peopleLynda Bellingham's tragic final Loose Women appearance moves audience to tears
Arts and Entertainment
'Right Here' singer Jess Glynne is nominated for Best Newcomer at the MOBO Awards 2014
musicExclusive: Jess Glynne hits out at 'ridiculous' criticism of white artists nominated for Mobo Awards
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Separated at birth? Frank Sivero (left) claims The Simpsons based Mafia character Louie on his Goodfellas character
arts + entsFrank Sivero sues Simpsons studio over allegedly basing mobster character on Frank Carbone
Carl Bernstein (left) and Bob Woodward (right) with former 'Washington Post' executive editor Ben Bradlee

The Washington Post editor helped Bob Woodward and Carl Bernstein bring down President Nixon


Stephanie first after her public appearance as a woman at Rad Fest 2014

Arts and Entertainment
Laura Wood, winner of the Montegrappa Scholastic Prize for New Children’s Writing

Children's bookseller wins The Independent's new author search

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London