THE TIME -- WARNER DEAL : Time, Warner Start Ironing Out Details of $14-Billion Deal : Top Concerns Include Debt Plan, Combining Operations

Today is the first day of the rest of Time Warner’s life, and there’s work to do.

Now that Time Inc. and Warner Communications have repelled Paramount Communications and begun to combine, they must think about melding their organizations, paying off debt and working out the final terms of the $14-billion deal. And that’s before they start considering their much-bruited battle against such global competitors as Bertelsmann, Sony and Rupert Murdoch’s News Corp.

“They had to struggle to start this company, and they’ll have to struggle some more to get it going,” said an adviser to Time and Warner.

‘Pretty Heavy Burden’

The two companies began to realize their ambition of combining on Monday, when the Delaware Supreme Court rebuffed Paramount’s legal effort to break up the deal, clearing the way for Time to take control of 58% of Warner’s common stock. Time Warner will be the world’s largest media and entertainment company, with about $10 billion in annual revenue. It will own such properties as Time’s magazines, its Home Box Office pay-TV service and cable systems properties, and Warner’s movie studio, TV programming and records operations.

Time will make this happen by borrowing $10.35 billion in the first phase of the deal, and perhaps $4 billion in the second phase, to give Time Warner a debt load of about $14 billion. Many major U.S. companies carry more debt, “but that’s still a pretty heavy burden,” said Dennis McAlpine, analyst with the Oppenheimer & Co. investment firm.

By McAlpine’s calculations, if the company uses stock to pay for half of the second phase of its acquisition program, in 1990, its cash flow to cover payments on the debt will be “just about break-even.”

One of the first challenges for the Time Warner brass, then, will be in looking for ways to reduce debt. Wall Street believes that they probably will be forced to sell some pieces of the company, betting they will look for a buyer for Time’s Scott, Foresman & Co. publishing unit and Warner’s stakes in such companies as toy maker Hasbro Inc. But will that be enough?

McAlpine calculates that Time Warner could probably raise about $300 million selling the equity stakes and perhaps more than $600 million selling the publishing unit. But that $1 billion “doesn’t look too big compared to your pile of debt,” McAlpine says.

He and some other analysts believe that Time Warner would then be forced to sell portions of its coveted cable systems, either by offering a stake in the operations or selling some pieces outright.

Time Warner’s management also has the challenge of fusing its organizations and cultures, a subject that has been much discussed since the companies unveiled their first merger proposal last March. Some observers believe that the seven-week takeover battle has fostered a common feeling that will make the transition easier.

“This is such a friendly deal, I wouldn’t expect a great clash,” said Paul Napper, analyst with Crowell, Weedon & Co. in Los Angeles.

But some analysts still wonder about the differences between Time, the more buttoned-down organization, and Warner, which has been more free-wheeling in spirit.

Others wonder, too, about how well Warner Chairman Steven J. Ross and Time Chairman J. Richard Munro will get along as “co-chief executives.” Each is supposed to take charge of the properties their company brought to the marriage.

But some believe that such arrangements are unstable and predict Ross may try to dominate.

The executives’ ability to work together may soon become evident in their efforts to formulate the second phase of takeover financing, in which they must put together a $7-billion package of cash, debt or stock. The package will be used to buy the remainder of Warner’s shares.

Crowell, Weedon’s Napper said Warner is understood to favor including more stock in the package, and Time more debt.