COMPANY TOWN : Turner Deal May Mean Time Warner Exec Reshuffling

Time Warner Inc., working during the weekend to complete its proposed buyout package for Turner Broadcasting System Inc., is considering reshuffling top executives if the $8.5-billion stock deal goes through.

Chairman Gerald M. Levin is said to be mulling one scenario in which Time Warner’s music and Home Box Office chief Michael J. Fuchs would give up both positions to become chief operating officer of Turner Broadcasting. Fuchs would report to Ted Turner, who is expected to remain with the merged entity as Time Warner vice chairman heading TBS, a wholly-owned subsidiary based in Atlanta.

The scenario would also have Warner Bros. film and television division Chairman Robert A. Daly taking over the music group from Fuchs. A Time Warner spokesman refused to comment Monday on either possible move.

A knowledgeable source called the reshuffling “speculative. . . . A lot of things that get discussed don’t merit headlines.” The possible reshuffling of Fuchs and Daly, first reported Monday in the New York Times, would contradict reports by sources who say Turner wants his longtime assistant and fellow Turner Broadcasting board member Terry McGuirk in the chief operating officer slot.

Sources said Fuchs and Levin are expected to meet early this week to discuss the future of the cable division should an agreement be reached. A Fuchs spokesman has denied Fuchs would ever report to Turner.

Time Warner confirmed Wednesday that it is making a bid for the 81% of Turner Broadcasting shares that it does not already own. The marriage, which has Turner’s blessing, would create a powerhouse with $18.7 billion in revenue and far-flung broadcast, movie studio, publishing, music and other entertainment assets.

The company would be the largest entertainment conglomerate, bigger than a combined Walt Disney Co. and Capital Cities/ABC Inc., which have announced plans to merge. Sources close to the talks said Monday that there is hope that a merger agreement could be presented to the boards of both companies as soon as Thursday.