Will Time Warner shareholders buy this deal?

Could there conceivably be room within one organisation - even a giant one - for the likes of Time Warner's Gerald Levin and the famously eccentric Ted Turner? One would think not, to judge by their respective characters. But in the virtual reality that rules in the world's entertainment sector, virtually anything now appears to be possible.

Let's imagine that Mr Turner agrees to fold his empire, so hard won, into the juggernaut of Time Warner. He would give up the hands-on control he enjoyed when building CNN, the Cartoon Network, and a slew of Hollywood production companies and gain second-in-command status at lumbering old Time Warner, famous for the horrendous problems it incurred trying to marry the publishing company Time with the Hollywood studio and music publishing group Warner.

What would the merged companies gain? Certainly there are some obvious matches. Both have movie departments (Mr Turner's Castle Rock, New Line Cinema and Turner Pictures, coupled with Time Warner's Hollywood leader Warner Bros). Warner has cable operations throughout the US, while Mr Turner has his satellite and cable broadcasting operations. And certainly there are some neat strategic fits: for example, Mr Turner has no music publishing interests; Warner has them in spades.

Wall Street is on the whole less sceptical about synergy claims of this sort than London, but even so Time Warner might have some difficulty selling this deal to its shareholders. Whether you think this a visionary merger which will position Time Warner at the forefront of the multimedia revolution, or merely a grand piece of corporate empire building, there is little doubt that bringing together these culturally very different companies will be a massive management task. Time Warner's record in this department hardly gives cause for believing it is up to it.

What, in any case, is the advantage of combining the companies under a single roof? Belief in the wonders of vertical integration has soured many a corporate dream; look at Matsushita, which earlier this year gave up its claim to Hollywood studio MCA. The media market is moving so quickly that even the most fleet-footed find it hard to keep up. Managements would be better employed keeping their eyes on the ball. The only sure winners are the investment bankers and lawyers paid to put these deals together - and to take them apart again later when they fail to gel.

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