Negotiating With Ted Turner : Knapp Discusses Purchase of MGM Lot

Financier Charles W. Knapp has been negotiating with cable entrepreneur Ted Turner to purchase the historic MGM Studios in Culver City, one of Knapp’s attorneys confirmed Friday.

Veteran entertainment industry lawyer Greg Bautzer said: “I arranged a meeting with Mr. Knapp and Mr. Turner about a month ago. We have been in discussions and negotiations ever since.” However, Bautzer added, “nothing has been concluded.”

Bautzer, a Hollywood deal maker whose expertise in the buying and selling of studios goes back to the RKO sale by Howard Hughes in the late 1950s, declined to answer any specific questions about the negotiations, possible purchase price or terms.

Sources close to the negotiations, however, disclosed two key elements:

- Turner wants to retain the library of classic films now owned by MGM/UA Entertainment, which he is buying for $2.18 billion. It has been known for some time that Turner might sell the studio facility to help pay back the enormous debt that he is taking on to buy the movie company. Industry observers have said the film library--and its potential for his cable-TV empire--was the principal attraction for him in purchasing MGM/UA.

- Trafalgar Holdings, Knapp’s private company, has expressed a continuing interest in buying entertainment properties, and the facilities of the MGM lot would fill that bill. Knapp was chairman of Financial Corp. of America, the Irvine firm that owns American Savings & Loan, until he was forced out last year after FCA suffered financial difficulties.

Reached late Friday, Art Sando, Turner Broadcasting vice president of corporate communications, denied that there are any current discussions with Knapp concerning the sale of MGM assets.

“There will be no such discussions until after the acquisition is completed,” he added. He declined to comment further.

Sources said Turner’s acquisition of MGM/UA must be completed between March 17 and March 23.

Any sale of the studio by Turner is contingent on successful completion of his acquisition of the entire company. One source commented: “Turner doesn’t yet own one thing to sell anybody. He doesn’t own the studio, a film library, the real estate, a picture--nothing.”

Industry observers said Turner may be seeking to sell the studio facility in order to reassure his financial backers that he has the wherewithal to complete the purchase of the entire company.

As part of the original purchase agreement, Turner agreed to sell MGM’s United Artists unit back to financier Kirk Kerkorian, MGM’s majority shareholder. Kerkorian has named producer Jerry Weintraub as chairman of the new UA.

They have already assembled a staff that includes former ABC programming chief Tony Thomopoulos and, as chairman of the executive committee, Stephen D. Silbert, who was hired by Kerkorian in 1985 and is a former named partner in Bautzer’s Beverly Hills law firm. Another partner, Frank Rothman, was chairman of MGM/UA until Turner reached agreement to buy it.

Although no studio facilities are being transferred to the new UA--even executive offices have to be bought or leased--it will retain rights to a string of highly successful UA productions, including the high-grossing “Rocky” films. There is little movie-making experience among the executives at the new UA with the exception of Weintraub, who produced “The Karate Kid” and “Diner.”

Times staff writer Kathryn Harris contributed to this story.