One of the major figures in the global media world, Ted Turner is
obsessed with owning a US TV network, Alasdair Reid says
There are two versions of the Ted Turner story. The first is that he’s a
visionary with the ability to ‘see around corners’- the man who
diversified his family billboard business into one of the most
innovative media outfits in the world. The second is that he’s a loose
cannon, a volatile personality obsessed with owning one of the big four
US television networks - and prepared to take outrageous risks to get it
Last year, Turner told TV critics: ‘If I died tomorrow, my tombstone
would say: ‘He never got a major network’.’
What isn’t in doubt is the fact that he’s the most colourful character
in the global media game. Married to the film star, Jane Fonda, he has a
personal fortune estimated at more than pounds 2 billion, owns much of
the state of Montana, is a renowned yachtsman and owns a baseball team.
Last year was momentous for Turner, culminating in the proposed merger
of his Turner Broadcasting System with TimeWarner, creating the world’s
biggest media conglomerate, with combined revenues of dollars 19.8
billion. The cliche normally trotted out in these instances is that
there is no such thing as a merger in big business, and indeed this was
a takeover, with Time Warner, which already owned 18 per cent of TBS,
paying dollars 7.5 billion for the rest.
But this deal was different: Turner has become vice-chairman of Time
Warner, is now its biggest single shareholder, and retains full control
of TBS as an independently operated division. Wall Street analysts say
he holds all the cards.
The merger was the latest twist in what has often been a turbulent
relationship between Turner and the chairman of Time Warner, Gerald
Levin, starting with Turner’s acquisition of MGM in 1986. Having just
failed to buy the CBS network, Turner jumped at the chance to buy the
ailing studio and put together one of the biggest junk bond deals of the
80s. But soon after stumping up dollars 1.5 billion for MGM, he realised
there was no way he could carry that much debt and sold off the studio’s
assets piecemeal for a fraction of their purchase value. Still dollars 1
billion in debt, he was forced to sell 37 per cent of TBS to, among
others, Time Warner and the giant cable network operator, TCI.
They bailed him out on condition that they could veto any future deals
and Levin wasn’t slow to exercise that prerogative. Bids for Financial
News Network, Orion, MGM (again) and NBC were blocked, as was an attempt
to put together an eleventh-hour offer for CBS last year.
But Levin, too, has his problems. He oversees the product of a shotgun
marriage between the straitlaced East coast Time and the sexier Warner
operation in Hollywood. East and West have been at war from day one.
Critics also say Levin paid over the odds for TBS and that Time Warner
carries too much debt. Turner may yet mount a boardroom coup.
Meanwhile, TBS goes from strength to strength both at home and abroad,
generating revenues of more than dollars 3 billion last year. Turner’s
great insight back in 1976 was that cable was going to be big. He took
Channel 17, a local terrestrial station serving Atlanta, renamed it TBS
Superstation, put it on satellite and sold it on to cable networks
across the country. It seems obvious now, but at the time it was the
first national cable channel.
He followed that with Cable News Network in 1980, using the same
distribution method, but this time the innovation was in programming
content. Not only was CNN the first 24-hour news channel but the first
‘thematic’ channel of any sort. The broadcast establishment laughed -
but by the time the Gulf War ended, CNN had proved a point to the whole
Turner was also one of the first to realise the value of material
languishing in film studio vaults. MGM’s library was the only part of
the group he retained and he has gone on to build one of the most
valuable programming libraries in the world, creating thematic channels
to make the most of it.
TBS is also innovative when it comes to advertising sales. It has an
international barter operation that will take advertisers’ product in
exchange for airtime and is willing to seek deals on a global basis.
Brian Jacobs, the media development director of Carat International,
says: ‘It’s not just about flogging airtime - they’ll talk about how the
Hanna-Barbera cartoon characters they own might be used in
merchandising. Time Warner is also putting global multimedia packages
together for clients. It will be interesting to see how they can start
Bedding down the TBS and Time Warner merger so that the two sides work
well together is obviously a priority for Turner, but nothing will
distract him from wanting to own one of the big four TV stations,
although it is increasingly looking a big task. Disney now owns ABC,
having recently paid dollars 19 billion to take over the Capital
Cities/ABC group. The media tycoon, Rupert Murdoch, won’t sell Fox and
Westinghouse bought CBS last year.
That leaves NBC. Owned by the world’s biggest company, General Electric,
there have been rumours that the network could be available. But last
year, other rumours circulated - that General Electric was interested in
buying Time Warner. It would be the media deal to cap all deals. But, if
it happened, it would almost certainly be the end of Turner’s dream.
Turner’s global network
The 24-hour news channel, Cable News Network. Brand extensions include
CNNfn, a financial news service; CNN Airport Network and CNN
International, airing in 210 countries. CNNRadio gives news and features
to mainly US radio stations.
America’s most-watched cable channel, TBS offers a general mix of
movies, sport, comedy and children’s programmes.
TURNER NETWORK TELEVISION
In the US, TNT operates basically as TBS2, offering general
entertainment with more emphasis on classic movies. In Europe, it is a
multi-lingual classic film channel. In the Asia-Pacific, it piggy-backs
with the Cartoon Network.
TURNER ENTERTAINMENT COMPANY
TEC is one of the world’s largest film and television programmes
Includes the entire back catalogue and an active studio.
THE CARTOON NETWORK
Launched in 1982 as the world’s first 24-hour cartoon channel. Now
available in multi-lingually.
NEW LINE CINEMA
New Line is America’s largest independent producer and distributor of
films, and also has home video and television acquisitions plus
production and distribution divisions.
CASTLE ROCK ENTERTAINMENT
Major independent producer for cinema and television.