Time Negotiates to Join Bailout of Turner Empire

Time Inc. is negotiating to become a late entrant among the cable systems buying 35% of Atlanta-based Turner Broadcasting System, the parties confirmed Tuesday.

The group’s $550-million bailout will permit cable entrepreneur Ted Turner’s debt-heavy empire to retire an expensive load of special preferred Turner Broadcasting stock. The preferred had a provision for stock dividends that threatened the maverick broadcaster with eventual loss of control of his firm to MGM/UA Communications’ controlling shareholder, Kirk Kerkorian.

Time’s cable subsidiary, American Television & Communications Corp., is the nation’s second-largest cable operator and the largest one not in the original lineup when the deal with Turner was announced Jan. 22. Three other cable systems have since joined the group.

Neither Time nor Turner Broadcasting would elaborate on the status of their talks. A Turner representative estimated that, by June 1, the company would redeem the special preferred stock that was part of its $1.2-billion purchase of the 3,650-film MGM library, which also includes distribution rights to many old Warner and RKO movies.

Ted Turner recently indicated that, after the deal with the cable operators is completed, he is considering launching a 24-hour entertainment channel for cable as his next enterprise. Some such exploitation of the MGM library is expected, since only part of it can be used by Turner Broadcasting’s WTBS Atlanta superstation.

The outside cable group is to obtain five seats on the Turner Broadcasting board. There have been industry reports that it may have some sort of veto rights on unusual company expenditures or new ventures.