‘Mouth of the South’ Takes 1st Step Toward Owning Major Network : Ted Turner Always Does Things the Hard Way

Long before Robert Edward Turner III accused the three networks of “treason” and called for the execution of their executives, or crawled drunk under a table at a televised press conference after winning yachting’s America’s Cup, or revolutionized cable television by seeing the potential of satellites, the man who calls himself “a Southern folk hero” had a penchant for going about difficult things the hardest way.

His way of fitting in when he first entered military school in Georgia, for instance, was to pick out the biggest of his four roommates and knock “the hell out of him.”

“I sensed that if I didn’t come out swinging, they were going to kill me,” Ted Turner once recalled. “And that night, I said to my roommates, ‘Who’s the boss in here?’ ”

On Thursday, Ted Turner took a first step toward his dream of finally being boss of a television network in roughly the same way. After years of trying to negotiate some kind of merger with a network--while at the same time assailing network television as sleazy and immoral--he proposed a hostile takeover of CBS, the biggest network of all, without the support of any major bank or corporate financier.

In an offer some on Wall Street find hard to call credible, Turner, 46, instead is offering debt notes, bonds and stock in Turner Broadcasting System, the Atlanta-based company that owns “super station” WTBS, two cable news networks and two sports franchises--in a sense banking on his own popularity as well as growing public sentiment against CBS management.

Whether Turner will get to be the boss at one of the nation’s Big Three networks seems a long shot this week. His chances, as always, are considered slimmer because his company is leveraged as far as it will stretch to fund all of his risk taking. The company has six times as much debt as stockholders’ equity, compared to CBS, whose debt is less than 0.3% of its equity.

The scheme, as unlikely as it seems, is true to the improbable and meteoric form of Turner’s career. In each case, he has attempted colossal stunts against conventional wisdom--with a fanfare and grace that earned him the name “The Mouth of the South.”

And in each case, his motives for taking the risks have appeared to his closest aides as having much more to do with emotional need than financial. If somehow Turner succeeds again, analysts and former aides said Thursday, CBS is likely to change as much as Turner can financially risk changing it.

“We used to argue at CNN about whether Ted was more interested in power or in glory,” said Reese Schonfeld, former president and co-founder with Turner of Cable News Network. “But we all agreed that money was a distant third, followed by sex.”

A man who says his hero is Rhett Butler of “Gone With the Wind”--one of his sons is named Rhett--and who talks about himself in military and biblical references, Turner was raised to compete and win. His father, Ed Turner, sent him to military schools, handed out heavy doses of corporal punishment and, one summer, charged the boy $25 of his $50-a-week salary in rent to live in the family home.

Turner himself has admitted that his motivation has much to do with his father. After appearing on the cover of Success magazine, for instance, Turner recalls holding the magazine to the heavens and saying to his dead father, “Well, Dad, is this enough?”

Turner’s business career began in 1963 when his father, forced to sell his billboard company due to debts, shot himself to death. Ted, then just 24, astonished his advisers by buying the losing company back, partly through selling the family’s real estate holdings.

By 1970, Turner Communications was a huge success, and Turner, again over advisers’ protests, paid $3 million for a UHF TV station in Atlanta that was losing $50,000 a month. Without any broadcast experience, Turner turned “a jumble of grade-D film, broken-down equipment and a building which vaguely resembled an abandoned supply depot from the Civil War into one of the most successful independent stations in the country in four years,” Television/Radio Age wrote. The recipe included old movies, “Gomer Pyle” reruns and grabbing rights to Atlanta Braves baseball.

Turner gained national prominence in 1976 by being the first to recognize the opportunity afforded by a change in FCC rules and the potential of RCA’s telephone satellite Satcom I for cable television. In December, Turner beamed his Atlanta station across the country, a breakthrough in cable broadcasting. By 1978, WTBS was worth $40 million and gaining in value at an estimated $1 million a month.

Turner was also among the first to realize the potential for media companies of owning the sports teams whose games they broadcast. In 1976, when the struggling Atlanta Braves baseball and Hawks basketball teams were in danger of leaving the city, Turner bought them, a strategy since copied by other, far larger media concerns.

Turner also bought the teams “because the stadium is one great big play pen where I can have 53,000 of my friends over,” he explained. To prove his point, Turner keeps a public address microphone at his seat and uses it liberally to talk to his friends.

Once he was a national figure, Turner began speaking out about network television in a way that did little to endear him to his industry. Television news and programming, Turner claimed, was anti-American and ruining the country. The network executives, he said, “were guilty of treason and all should be lined up and shot after a court martial.”

“Under the three networks, we’ve gone from the greatest nation to a morally, spiritually and economically bankrupt nation,” Turner said on the eve of launching his own news network. “And we’re running out of time.”

In June, 1980, Turner defied advisers and surprised skeptics again by launching CNN, television’s first 24-hour news network, a project that he said Time Inc. had just abandoned. Although by his own admission he had little interest in news--”I’d rather watch ‘Gilligan’s Island,’ ” he told Playboy in 1978--he saw a market that cable television had not yet filled.

After initial problems--it had to fight for White House press access--CNN has gained journalistic respectability in most circles and earned Turner grudging respect.

“The man is a genius,” said Lee D. Wilder, an analyst with the securities of Robinson Humphrey/Amexco in Atlanta. “When he came up with the super station idea or CNN, people thought he had lost his mind.”

After starting CNN, Turner’s behavior also raised speculation that he is something of a megalomaniac. Some of those who have worked closest to him are strongest on the subject.

“Ted uses CNN to reward his friends and punish his enemies,” said Schonfeld, who resigned as founder and president of CNN in 1982 over “differences” with Turner. “He told me several times he wants to be a press lord like William Randolph Hearst, and he has come very close to acting like Hearst.”

By his own admission, Turner has become more political in recent years. He has allied himself with such figures on the right as Jerry Falwell, Jesse Helms and Donald Wildmon, founder of a conservative group called the Coalition for Better Television.

He also has discussed openly the possibility of becoming President.

And his moralizing about television has raised charges of hypocrisy.

WTBS’ programming, for instance, does not live up to the pro-family, anti-violence standards that Turner espouses. TV wrestling remains one of WTBS’ most profitable programs, for instance, and war films are a long-time staple.

Now Turner wants a network, Schonfeld believes, in part because CNN’s audience share has shrunk by roughly 40% in two years. A network, Schonfeld said, “makes you much more powerful.”

In a Playboy interview in 1983, Turner said he was interested in owning a network because of the profitability of the owned-and-operated stations that the networks have, because of his outrage over the networks’ programming and because it would allow him power:

“If I was part of CBS, with billions of dollars behind me, then I would have size. . . . The networks need a truly competitive force that is being run by someone who cares more about the country than the profits.”

Whether Turner will get to be the boss at one of the nation’s Big Three networks seems a long shot this week. His chances, as always, are considered slimmer because his company is leveraged as far as it will stretch to fund all of his risk taking.

His offer, indeed, impressed few analysts and even amused some. Yet even Schonfeld cautioned against dismissing Turner without looking closely. “It never pays to laugh at Ted too soon.” CBS AND TURNER BROADCASTING AT A GLANCE CBS Broadcasting Television Network: 202 affliated stations Radio Networks Entertainment: Produces programs for TV network CBS Sports CBS News Radio and TV Stations Los Angeles: KCBS-TV, KNX-AM, KKHR-FM New York: WCBS-TV, WCBS-AM and FM Chicago: WBBM-TV, WBBM-AM and FM Philadelphia: WCAU-TV, WCAU-AM and FM St. Louis: KMOX-TV, KMOX-AM, KHTR-FM Boston: WHTT-FM San Francisco: KCBS-FM, KRQR-FM CBS Operations and Engineering CBS Productions: Theatrical Films and Worldwide Enterprises Records Operates Columbia Records, world’s largest producer, manufacturer and marketer of recorded music; also publishes sheet music. Publishing Publishes and distributes textbooks, computer software and magazines including Field & Stream, Road & Track, Woman’s Day and Family Weekly CBS Financial review In millions of dollars

Revenue Net Income 1984 4,924.9 212.5 1983 4,396.2 187.2

1984 revenue breakdown (by division) 6% Other 13% Publishing 26% Records 55% Broadcast Turner Broadcasting

Company formed in 1970 and 86%-owned by Ted Turner, derives 60% of its revenues from WTBS-TV, its Atlanta “superstation,” which reaches 66% of nation’s home with cable television. Another 30% comes from its Cable News Network and Cable Headline News services, and 10% comes from sports franchises, including its wholly owned Atlanta Braves baseball team and 69%-owned Atlanta Hawks basketball team. Turner Broadcasting Financial Review In millions of dollars

Revenues Net Income 1984 281.7 10.06 1983 224.5 7.06