NEWS ANALYSIS : Time Warner Meeting May Mark an Era : Entertainment: The legendary Steven J. Ross will be unable to preside at the shareholders gathering. Insiders express confidence in hard-working Gerald Levin.

The notion of a Time Warner annual meeting without Chairman Steven J. Ross sends a shiver down the spine of some shareholders.

But with the charismatic chief sidelined by prostate cancer, Time Warner executives may be privately relieved that a sideshow has materialized to distract those attending the annual gathering Thursday in Beverly Hills. Far easier to grapple with the First Amendment issues raised by the company’s distribution of the controversial “Cop Killer” song than Ross’ mortality.

Stepping to the lectern will be Gerald M. Levin, who was named Time Inc.’s co-chief executive in February after Ross orchestrated the ouster of Nicholas J. Nicholas Jr., the successor that Time Inc. designated in the 1990 merger. Will his first annual meeting be Levin’s crucible?

Insiders think not. Levin--who attended a Quaker college and has a courteous manner--is expected to handle the anticipated “Cop Killer” protesters with diplomacy. Some groundwork has already been laid. Martin Payson, Time Warner’s vice chairman, traveled to Texas last week to meet with the police association leading the protest. And representatives of various police organizations are being invited to speak at the annual meeting.

Police organizations opposed to Time Warner’s release of the controversial rap song will hold their first march today, a day in advance of the annual meeting. The Beverly Hills rally is being organized by the Law Enforcement Alliance of America, a Falls Church, Va., organization affiliated with two California groups: The California Correctional Peace Officers Assn. and Crime Victims United.

Levin declined to be interviewed before the meeting. But associates and friends say he is fully in control of company operations, and has been working 15- to 20-hour days, made longer by the brouhaha over “Cop Killer.”

“Jerry’s running the business day-to-day. He’s not a surrogate for anybody,” said a fellow executive.

There’s been plenty of work to do. In the last month alone, Time Warner took complete control of an 82%-owned cable TV company, American Television & Communications Corp., by issuing notes worth $1.3 billion.

On June 30, the company completed the $1-billion sale of a 12.5% stake in its film, cable system and pay-TV businesses to Japan’s Toshiba Corp. and C. Itoh & Co. The deal, which took eight months to close, enabled Time Warner to shift all but $2.4 billion of its $9.4-billion debt to Time Warner Entertainment, the new entity that is still 87.5%-owned by Time Warner.

Internally, Levin also must cope with strong-willed executives at divisions with old rivalries and conflicting agendas. For example, Warner Bros. and Home Box Office have not agreed on new terms for the licensing of Warner movies on HBO’s pay-TV networks.

And some Warner studio executives were dismayed when HBO recently committed $300 million over a four-year period to help finance movies to be distributed by Savoy Pictures Entertainment Inc., a new rival. It will fall to Levin to arbitrate such intra-company conflicts--a task one Wall Street analyst likens to taking “King Solomon to the 12th power.”

At the same time, Levin is counted on to strike strategic alliances in Europe, or with technology giants such as IBM, while maintaining good relations with Ross’ trusted adviser, Oded Aboodi, and Ross himself.

If he could give Levin advice, a second analyst said: “I would stick like a limpet to Aboodi; schmooze (Warner Bros. Chairman) Bob Daly and work like hell to get a deal done in Europe.”

Levin reportedly spent one evening last week visiting Ross at the Time Warner chairman’s home in Long Island. There has been little news about Ross’ condition, other than the fact that he was hospitalized briefly for chemotherapy in mid-June, when the company made a weekend announcement that the 64-year-old chairman would take a leave of absence.

But because Ross’ remission lasted just two months, and because word has seeped out that he apparently had prostate cancer in the 1980s, longtime Warner employees and shareholders don’t know whether he will be back. For those who stuck with Warner in the tumultuous 1980s, the uncertainty is sorrowful.

“It’s really like a member of the family has taken ill, for me,” said a Time Warner executive.

Ross, after all, is the larger-than-life character from Brooklyn who, in 20 years, transformed a limousine and office-cleaning business into the world’s largest entertainment and media dynasty. With his big smile, generosity and business acumen, he has beguiled movie stars, institutional investors and his own executives alike.

Warner shareholders believed that they had a storybook ending when Time paid cash to complete the 1990 merger. But the debt of the merged entity depressed the price of Time Warner’s stock in the more conservative ‘90s--along with Ross’ popularity.

Only last year, Ross fielded hostile questions about his compensation and layoffs in the magazine division in a shareholder meeting that lasted three hours. But the masterful restructuring of the company’s debt, and the cancer diagnosis, have taken the wind from most critics’ sails.

So, as the week began, Levin sent Time Warner employees an update on company news and Ross’ health: “Steve is responding to treatment and is eager to come back as soon as his doctors permit.”

Levin, 53, then prepared to fly west for his first solo performance before Time Warner shareholders and protesters. “Jerry will be fine at this,” said an executive from the Warner side. As good as Ross? “Probably not,” the executive said, almost wistfully. “Steve has a warmer smile.”

Climbing Amid Controversy Despite the illness of Time Warner Chairman Steven J. Ross and a brouhaha over the “CopKiller” rap song, the price of Time Warner stock has climbed to a 52-week high. Other eventshave been driving the stock: the investment of $1 billion by Toshiba Corp. and C. Itoh & Co., and the shift of $6.7 billion in debt to a new partnership called Time Warner Entertainment. Like other cable TV stocks, Time Warner is also benefiting from a much-softened congressional bill to re-regulate the cable industry.

Tuesday stock close: $113.75 Source: Dow Jones