Turner and GE Fail to Agree on a Merger Deal : Media: Executives say talks broke down over who would control the combined company.

Talks between Turner Broadcasting System and General Electric regarding a possible merger have ended because the two sides couldn’t agree on who would control the proposed company, according to executives at both companies.

The talks ended after top-level meetings on Friday in Atlanta, where Turner is headquartered. The meetings involved GE chairman Jack Welch, NBC President Robert Wright and Ted Turner, chairman of TBS.

“The issue all along was who would control the merged company,” one source said. “In essence, NBC wanted to buy TBS, and Ted Turner wanted to buy NBC.”

Executives of the two companies had been meeting to discuss ways that the two companies might combine. Under discussion, sources said, was a possible alliance of GE and Turner Broadcasting in which GE would become a significant shareholder in the combined company.

NBC is said to have wanted a majority stake in any combined company. Turner also wanted majority control and is said to have regarded a minority stake as effectively selling the company he has built. Also unresolved was whether Time Warner, one of Turner’s two biggest shareholders, would support any such deal.

The idea of a proposed alliance between GE and Turner was discussed at the GE board meeting in December, although no action was taken at that time.

A merger or other combination, executives said, provided opportunities for synergy and cost savings between NBC’s entertainment division and Turner’s networks and between Turner’s Cable News Network and NBC News.

In addition to CNN, Turner Broadcasting includes the TNT cable network, the Cartoon Network and the TBS superstation.

But, while both companies were interested in a possible merger, the issue of control remained unresolved. At a recent management meeting, GE chairman Jack Welch reiterated his position that he wants to maintain majority control.

Turner himself disclosed the end of the talks during an entertainment industry dinner in Los Angeles on Saturday. On Sunday, Turner Broadcasting issued a statement saying, “TBS has discontinued discussions regarding possible business combinations with NBC due to issues of ownership and control.

“As in the past, the company will continue to pursue strategic opportunities as they arise, in order to maximize shareholder value.”

NBC on Sunday issued a similar statement, confirming that the talks had ended.

Turner has made no secret of his desire to own a network, but he faces regulatory hurdles and must win support from his two biggest shareholders, Time Warner and Telecommunications Inc. Earlier talks with NBC and CBS failed.