Turner Rejects NBC’s Offer for Half of CNN

Cable-television entrepreneur Ted Turner on Thursday turned down an offer of about $250 million from National Broadcasting Co. for a one-half interest in his Cable News Network, complaining that NBC’s insistence on taking over editorial control of the 24-hour service was unacceptable.

“We felt we could not give them editorial control,” said Arthur Sando, a spokesman for Turner Broadcasting System, minutes after the expiration of a 5 p.m. EST deadline that NBC had set for Turner’s response. “Negotiations with NBC have ended.”

Turner’s decision leaves NBC with the task of trying to establish its own cable news operation, a goal of NBC News President Lawrence K. Grossman. The unit of RCA has said it would start a 24-hour cable news system if it obtains by Dec. 16 commitments to carry the service from cable operators reaching 13.5 million households.

NBC says it would expect to provide $50 million over five years--with the cable operators putting up $20 million--to make the system profitable.

Acquiring a share of Turner’s system would have given NBC access to the 32 million subscribers that CNN says it reaches.

NBC confirmed through a spokesman that negotiations with Turner had ended and that “NBC News will continue to explore its own cable news initiatives.”

Turner’s decision leaves open the question of how the cash-strapped television entrepreneur will finance his biggest deal--the $1.5-billion purchase of MGM/UA Entertainment. To raise money, Turner has been shopping interests in CNN to several interested buyers, including Time Inc., Viacom International and Gannett Co.

A Time spokesman said Thursday that the company “continues to be interested.” Viacom and Gannett declined comment.

A fourth potential buyer mentioned by Turner--TV broadcaster and newspaper publisher Rupert Murdoch--had no comment, a spokesman said.

Turner had indicated at a luncheon here Thursday that he was leaning toward rejecting NBC’s offer, which sources placed at about $250 million for a one-half interest in CNN, because of NBC’s demand for full editorial control.

“I won’t do that to the people who work at CNN,” he said at the session, which was sponsored by the New York chapter of the Academy of Television Arts and Sciences. He said he might have accepted NBC’s offer if the network had been willing to share editorial control.

But he also expressed frustration at CNN’s precarious financial condition. Referring to NBC News President Grossman, he said: “I told Larry, we are the little guy. I’m sick of having people throw sand in my face.”

Although it is expected to become profitable next year, which would be its sixth year in operation, Cable News Network might face oblivion if met with a serious challenge from a competing cable news operation, Turner said.

“I put on a bold face, but I’ve been scared to death and very worried about it.” He also said that he expected an NBC-owned cable news network to undercut CNN’s prices to cable operators.

Venture Abandoned

If American Broadcasting Cos. and the Group W unit of Westinghouse Electric had continued running their Satellite News Channel, he added, “they would have broke me.” The two companies abandoned the venture earlier this year.

NBC officials confirmed during the day that they had given Turner a 5 p.m. EST deadline and were insisting that full editorial control over the cable network be part of any deal.

Turner Broadcasting’s financial health appears to have been damaged by the entrepreneur’s unsuccessful campaign to take over CBS Inc. this year. In the first nine months of this year, the company recorded a net loss of $5 million, although its operating profit rose to $8.1 million from $3.9 million a year earlier. The difference was accounted for by the $13.1-million cost of the CBS campaign.

Yet CNN--which lost $15 million last year, according to analysts’ estimates--may turn its first pretax profit in 1985, a projected $12.7 million.

Separately, Turner told the luncheon that he plans to put his personal mark on ailing MGM/UA.

“I have a long-range plan for MGM that I can’t talk about today,” Turner said. “But I can say that I don’t plan to put any money into slasher-type films, or films like ‘Year of the Dragon.’ ”

He said he prefers the kind of films that make up the largest part of the more than 2,000 titles that he will inherit from the MGM library, such as the “Wizard of Oz” and “Singin’ in the Rain.”

Times staff writer John Goldman and free-lance writer Clarke Taylor in New York contributed to this story.