Turner, Time Warner complete merger
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NEW YORK Bringing many of the biggest properties and egos in media together under one roof Thursday, Time Warner and Turner Broadcasting System completed their $7.57 billion merger. Time Warner Inc., regaining the title of the world's largest media and entertainment company, now adds such familiar names as Fred Flintstone, CNN and the Atlanta Braves
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The Journal Record
NEW YORK Bringing many of the biggest properties and egos in media together under

one roof Thursday, Time Warner and Turner Broadcasting System completed their $7.57 billion

merger.

Time Warner Inc., regaining the title of the world’s largest media and entertainment company,

now adds such familiar names as Fred Flintstone, CNN and the Atlanta Braves not to mention

Ted Turner to an already formidable stable that includes Bugs Bunny, HBO, Time magazine

and many others.

In separate meetings in New York, shareholders of the two companies voted overwhelmingly to

approve the merger.

“This is the company that I’ve always dreamed of and we are now here, complete, one team and

one family,” Time Warner Chairman Gerald Levin said.

“This is a dream,” said Turner, the founder and chairman of Atlanta-based Turner Broadcasting,

who now becomes vice chairman and the largest single shareholder of the merged company.

“Considering the difficulties we had with this merger… it was quite a job to get it completed,”

Turner said after announcing the vote. Later, as his long-time secretary Dee Woods read a final

motion to adjourn Turner Broadcasting’s final shareholder meeting, a tearful Turner dabbed his

eyes with a handkerchief.

The merger sent Time Warner stock up 25 cents a share to close at $41.37 on the New York

Stock Exchange. The deal was concluded after the close of trading.

It should take about a year to actually combine the numerous, and in some cases overlapping,

divisions of the two companies, analysts said.

“One of the first things is going to be fairly significant layoffs from Turner,” said Larry

Gerbrandt, a senior analyst at Paul Kagan Associates Inc., a media research firm.

“They’ve got to figure out the areas where they have duplicated overhead, and figure out who

gets the responsibilities of the ones who will be leaving,” Gerbrandt said. “A lot of it is going to

be basic blocking and tackling. It’s just a painful transition.”

Time Warner officials have not said how many people would be fired, though estimates have run

as high as 1,200.

Despite the contrasts in corporate culture and personality reflected in the reserved but ambitious

Levin and the loose-lipped, risk-loving Turner, Time Warner and Turner Broadcasting already

share a high degree of understanding of each other’s business that should help smooth the union.

“These are companies that have operated in the same sector, the same industry for almost their

entire existence,” Gerbrandt said.

The company has a host of other matters to grapple with, including a restructuring of its cable

partnership with U S West.

, the telephone company that owns about one-quarter of the Time Warner Entertainment division

and tried unsuccessfully to stop the merger.

Time Warner also must put into effect plans, touted in private to Wall Street analysts, to make

further cuts in the company’s costs and debt if it hopes to continue the recent ascent of its stock

price.

As Time Warner and Turner celebrated their merger, a side dispute over the company’s refusal to

carry News Corp.’s new Fox News channel over its cable television systems was simmering.

On Wednesday, just 18 hours before the Time Warner shareholders vote, News Corp., controlled

by longtime Turner antagonist Rupert Murdoch, filed a $2 billion breach of contract suit against

Time Warner.

The lawsuit names Turner Broadcasting and Ted Turner as well as Time Warner and its

entertainment partnership, Time Warner Entertainment, but did not seek an immediate halt to the

merger.

Turner, asked about the suit Thursday, called it “that frivolous piece of junk.”

As a condition for approving the merger, federal regulators required Time Warner to carry

another news channel, in addition to its own Cable News Network, on some of its cable systems.

But the company opted for MSNBC instead of Fox. Time Warner insists its decision is legal.

Complicating the fight, New York Mayor Rudolph Giuliani announced the city would put the

Murdoch 24-hour news channel on one of its public access cable stations. Time Warner’s earlier

decision not to carry Fox news left that operation with access to only a small portion of New

York, a critical market for advertising.

In a letter to Time Warner Wednesday, the Giuliani Administration asserted that Time Warner

couldn’t block its decision to let Fox and the Bloomberg Television news service use

public-access television, because that would amount to censorship.

A Time Warner spokesman said the company would fight the city’s move.

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