Time Warner and Turner Broadcasting System (TBS) were in deep negotiations over the possibility that the CEO of Time Warner, Gerald Levin, could purchase TBS for about $8.5 billion. However, there are many details to work out, which means that this deal is still far from being made. In the forming of a deal, Time Warner and TBS could merge, which would require Ted Turner to be second in command, and would possibly create volatile relationships between the top moguls.
Gerald Levin, representing Time Warner, and Ted Turner or “entrepreneur for life” with TBS, both have their reasons for wanting to merge their companies in a deal (Streisand 48).
The first indications were that Levin would pay off TBS shareholders with a pile of stock values at about $8.5 billion. Levin wants to merge because it would make his stock more valuable, allowing him to pay off some of Time Warner’s debt. Ted Turner wants to merge is because his holdings would be apart of the world’s largest entertainment company, vaulting over Disney, which has been on top for a month after buying out Capital Cities and ABC. TBS owns CNN, the cartoon network and three other channels, plus two movie companies, and sports that include the Atlanta Braves, all which would be added to the list of Time Warner’s properties.
If the two entertainment companies do indeed merge, then it is very likely that Ted Turner would be vice-chairman. This would definitely be different for him after being first in command all these years. Some believe, however, that he would enjoy this because he is getting older and would like to lessen his responsibilities. Turner is vice chairman, as opposed to chairman, because his company is the company being bought, and it would make sense that the buyer should have the upper hand. Another reason is that Time Warner is the larger company, which makes them dominate. It will be interesting to see if Turner plots anything to try and be the chairman.
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The last argument is that there could be a struggle between all of the greedy moguls who are involved or would like to be involved in the deal. One mogul, John Malone, who owns Tele-Communications and 21% of TBS, is a “notoriously hard bargainer”, and is in a very good bargaining position (Kane etal, 60).
Malone could become one of the largest shareholders of Time Warner by virtue of his stake in TBS. Another man involved is Edgar Bronfman, the Seagram CEO, who owns 10 % stake of Time Warner. These men, along with Turner and Levin, and many others, can cause a very difficult situation where every man has his own ideas and desires, which can lead to the failing of a deal.
In the developing of a deal between Time Warner and TBS, there may be a merge between the two entertainment companies. At the same time there could be a problem with becoming the second man in charge, as well as the controversy between the many moguls who have their own motives. It will be very difficult for the deal to be completed with every man happy with the outcome.
