Time Warner to Acquire Another Cable Operation : Communications: The media giant will sell its 21% stake in Turner Broadcasting System to help ease the added debt load. O.C. cable subscribers will not be affected by Time Warner’s latest deals.

As it unveiled its second $2-billion-plus cable acquisition in two weeks, Time Warner Inc.--seeking to ease investor fears that it is taking on too much debt--told analysts Tuesday that it aims to sell up to $3 billion in assets, including its 21% stake in Turner Broadcasting System Inc.

A divestiture by the media giant of its Turner holdings would be an important step in helping Turner Chairman Ted Turner free himself to make a significant deal, such as buying a major television network.

Turner has been openly frustrated in the past at having his hands tied by investors, including Time Warner and cable giant Tele-Communications Inc., which have the right to veto major Turner deals. Turner recently held talks about buying NBC from General Electric Co., but the discussions ended because GE wanted to maintain a majority interest.

On Tuesday, Time Warner announced a long-awaited agreement to buy Cablevision Industries in Liberty, N.Y., for about $2.7 billion in stock and assumed debt. The deal--along with a $2.2-billion deal disclosed last week involving the cable operations of Houston Industries--will add about $3 billion to the firm’s already-steep, $15-billion debt load.

Time Warner’s subscriber base in Orange County will not grow as a result of these two acquisitions. Cablevision Industries has no subscribers in the county.

Orange County’s second-largest cable operator, Huntington Beach-based Paragon Cable, with 100,000 customers, is wholly owned by Houston Industries’ Kblcom division. However, the local Paragon unit was not part of last week’s deal between Houston Industries and Time Warner.

Don Weddle, a spokesman for Paragon, said that his operation, which covers six cities and an unincorporated part of the county, is likely at some point to be combined with Time Warner-owned Cablevision of Orange, which has 25,000 subscribers.

Time Warner also disclosed a reorganization that sets up a stand-alone, self-financing unit to house and manage its cable and telecommunications assets. Some Time Warner executives and analysts believe the company’s stock price has been hurt because investors have difficulty understanding the structure of the company, which, in addition to cable systems, owns the Warner Bros. studio, Home Box Office, Time magazine and Warner Music Group.

According to several of those who attended Time Warner Chief Executive Gerald M. Levin’s meeting with analysts, he cited the Turner investment as the kind of asset the company wants to sell because it does not generate cash.

Time Warner for two years has talked about possibly swapping its Turner shares for a cash-producing asset, such as one of Turner’s cable channels. But in a new wrinkle, it disclosed Tuesday that it would be willing--even eager--to take cash.

The firm values its Turner stake--once worth about $2 billion--at just above $1 billion, although, based on current stock prices, it is worth about $970 million. The logical buyer for the shares would be Turner itself or TCI, which owns a slightly bigger stake in Turner than Time Warner does.

A Turner spokesman declined to comment.

In addition to the Turner stake, Time Warner said other assets that might be sold include some of its smaller cable systems that are not clustered around other Time Warner cable operations.

Analysts were hopeful that Tuesday’s announcements mean Time Warner is trying harder to simplify its structure. Investors pushed the stock up $1.25 to close at $39 a share in New York Stock Exchange trading.

“This is going to help investors better understand Time Warner. The webs Time Warner weaved in the past were so intricate and often done as tax-sheltering moves,” said Jill Krutick, a Smith Barney analyst and vice president.

Time Warner’s acquisition of Cablevision Industries--no relation to industry giant Cablevision Systems of Woodbury, N.Y.--gives the company another 1.3 million subscribers, putting Time Warner, at 11.5 million subscribers, just a shade behind industry leader TCI. The bulk of the cable systems being acquired are in New York, Florida and North Carolina. Locally, they include 97,000 subscribers in the San Fernando Valley and CVI’s minority stake in the Long Beach cable system.

The acquisition is part of Time Warner’s strategy of building cable “clusters” that allow it to operate systems more efficiently, sell more regional advertising and lay the groundwork for the day when it may supply cable customers with phone service and interactive programming.

“The impression I get is that they are really interested in becoming the largest cable operator in terms of number of subscribers and really interested in providing the phone business as an increment to the cable side,” said Cowen & Co. analyst Harold Vogel.

Separately, Time Warner said its net income before interest, taxes, depreciation and amortization came to $827 million in the fourth quarter of 1994 on revenue of $4.6 billion, compared to $760 million on revenue of $4.1 billion a year earlier.

For the year, Time Warner said its profit before taxes and interest came to nearly $3 billion on revenue of $15.9 billion, compared to $2.8 billion on revenue of $14.5 billion in 1993.

Time Warner said earnings of its “content” businesses--publishing, music, filmed entertainment and HBO--grew 12% in the fourth quarter and 10% for the year, but that profit for its cable operations declined because of government rate regulations.

Times correspondent Hope Hamashige in Costa Mesa contributed to this report.