Creating an Entertainment Giant : Winners, Losers and Those in Limbo

The deal between Time Warner and Turner Broadcasting to create the largest entertainment company in the world would boost some and bruise others. A look at who has gained ground, who has lost and whose future is in doubt.

WINNERS

Ted Turner

The TBS chief executive would parlay his cable and movie company into a 10% stake in the world’s largest entertainment and media conglomerate, enriching himself--on paper--by more than half a billion dollars. Turner would become vice chairman of Time Warner and the company’s largest shareholder, control two board seats and be a likely candidate to succeed Gerald Levin.

John Malone

The Tele-Communications Inc. chief executive extracted major concessions for his support, including extended agreements to broadcast the Turner networks on its cable systems. When the deal was first announced, Malone found himself in a no-lose situation because he had the power to veto any terms that didn’t suit TCI. Like Turner, Malone reportedly will make $500 million, on paper, on the deal.

Gerald Levin

With the acquisition of Turner Broadcasting, the Time Warner chairman would execute one of the biggest media deals ever. He has strong support from his board, but there are risks. He now must bring two companies full of egos and differing cultures into the same company.

LOSERS

Edgar Bronfman Jr.

The Seagram chief executive and MCA owner will see his 15% stake in Time Warner diluted by the merger, moving from the largest shareholder to No. 3 behind Turner and TCI. Time Warner executives have ignored Bronfman throughout the merger talks with Turner, and “I don’t think he’s too happy about that,” one analyst said.

Michael Fuchs

The HBO chief was given the additional responsibility for Time Warner’s music group earlier this year. Now HBO is to be moved under Turner’s wing. Fuchs was considered Time Warner’s most flamboyant executive and possibly a successor to Levin. Now Turner can make both those claims. “If he thought he was No. 2 at Time Warner, he’s lost ground,” said an analyst.

Brian Roberts and Timothy Neher

The president of Comcast and vice chairman of Continental Cablevision, respectively, opposed the deal behind the scenes but had little say in the outcome. The two Turner Broadcasting board members reportedly believe the deals made to get the support of Malone will be disadvantageous to smaller cable operators.

UP IN THE AIR

Robert Daly and Terry Semel

The co-chief executives of Warner Bros. have long argued to make Time Warner more of a content company, and this deal pushes it in that direction. They also benefit in that longtime rival Michael Fuchs fares less well under the merger.

Scott Sassa and Terry McGuirk

The fate of these two top Turner executives has yet to be decided. Sassa, president of Turner Entertainment Group, has wanted to produce more star-driven features, and marrying into the Warner Bros. family could make that easier.

US West

The Baby Bell filed a lawsuit Friday to block the deal, arguing that its investment in Time Warner Entertainment forbids either company from forming new partnerships that compete with each other. US West owns more than a quarter of the Time Warner division that includes the cable operations, the Warner Bros. studio and Home Box Office. Analysts say the suit could be a bargaining chip to help the phone company convert its shares in Time Warner Entertainment into a stake in Time Warner itself.

Microsoft

The software giant had been negotiating an alliance with Turner to bring content--ranging from CNN’s news to MGM’s film library--its new on-line service. Time Warner’s acquisition of Turner doesn’t rule out a future deal with Microsoft, analysts say.