Time for a Change : Turner Entertainment Chief Sassa to Call It Quits

The first management fallout resulting from the merger of Turner Broadcasting System Inc. and Time Warner Inc. is expected to come as early as today, according to sources close to the company, with the resignation of Scott Sassa, a Turner board member and president of the company’s entertainment division.

In the first major defection since the merger was announced last September, Sassa is expected to leave after the merger closes in mid-October. Neither Turner nor Sassa would comment. Sources close to Sassa say he does not have another job lined up, but they speculated that he would leave with a severance package worth about $7 million.

Sources say the post-merger structure of Time Warner would leave Sassa with a smaller portfolio than he now has, which includes four cable channels and the Turner Pictures movie studio. “Sassa was the odd man out in the merger,” said Christopher Dixon, an analyst at PaineWebber Inc. “Management shake-ups are an inevitable outcome of mergers. At Turner, this is just the beginning.”

Although the management structure of the integrated company is still being worked out, Ted Turner, the new vice chairman of Time Warner, is designated to head a video division that will include both companies’ cable networks, according to the proxy statement filed by Time Warner with the Securities and Exchange Commission. The video group will consist of Time Warner’s Home Box Office, headed by Jeffrey Bewkes; Turner’s Cable News Network, which is run by W. Thomas Johnson; and a third arm, Turner Broadcasting Systems, which will include four entertainment channels--TNT, TBS, Cartoon Network and Turner Classic Movies--as well as the Turner Pictures movie studio.

Robert Shaye, the chairman of New Line Cinema, will also report to Turner, although the studio could be spun off to the public, with Time Warner retaining distribution rights to its films and television shows. Time Warner has retained investment banker Furman Selz to evaluate the asset, which is estimated to be worth $750 million. Castle Rock Entertainment, the other studio owned by Turner, is expected to be sold.

Sassa, at 37, is considered a rising star in the entertainment industry. A close advisor to Ted Turner, he represented the cable maverick at such power gatherings as Herbert Allen’s annual retreat for media moguls in Sun Valley, Idaho. The Cartoon Network, one of four channels Sassa supervises, is one of the most successful cable launches of the 1990s, when a shortage of channel space retarded new network offerings. Sassa was the first executive hired when Barry Diller put together the Fox television network for Rupert Murdoch.

In the reorganization, Sassa lost out to Terence F. McGuirk, 45, executive vice president of Turner. Sassa would have had to report to McGuirk, who would assume responsibility for all four networks now reporting to Sassa, according to sources. For the last six years, McGuirk has overseen sales and marketing of all Turner cable networks, including CNN, putting him in charge of huge revenue streams from cable subscriptions and advertising. Sassa has overseen the programming of the networks and also Hanna-Barbera Cartoons, home video, merchandising, licensing, publishing and interactive operations.

Most of Sassa’s operations outside of the four networks and Turner Pictures are expected to be integrated into similar divisions at Warner Bros. studio, resulting in cost savings and job cuts, including many in Turner’s Los Angeles offices.

Although sources say Ted Turner has been agonizing for weeks over how to structure the video division to keep both McGuirk and Sassa happy, in the end, they say, he based his decision on seniority and loyalty. McGuirk has been with the company 24 years and Sassa has worked for Turner only eight.

Some Hollywood and Wall Street sources are surprised that McGuirk will have an operating role in the reorganized company. McGuirk is not known in the creative community, having developed most of his relationships among cable operators.

Sources say Turner was irritated with Sassa last year when he asked to be let out of his four-year contract after only a year and a half to pursue other job opportunities. “What Scott is good at is executing someone else’s vision,” said a Hollywood executive. “He realized he had played his string out with Ted.”

Turner refused to release Sassa, who apparently held preliminary discussions with Edgar Bronfman Jr., whose Seagram Co. had just purchased MCA Inc. Talks fell apart because Sassa is said to have wanted to oversee both film and television and Bronfman was interested in giving him only the top television job.

Sassa has spent the bulk of his career in cable, although he oversees the fledgling Turner Pictures, whose first picture is due out this Christmas.

As a cable executive, Sassa is well regarded. Turner Network Television and TBS are both top-rated cable networks, with TNT this year outranking reigning USA Network for the No. 1 position in the prime-time ratings.

He is viewed as a sharp strategic thinker and inspirational leader, although sources say his acerbic sense of humor and youthful arrogance can be off-putting. Several former employees say Sassa could cut employees to the quick in open meetings or could bury people with his political maneuvers.

In recent months, in what many saw as attempts to amass power before the merger, Sassa pulled the Hanna-Barbera cartoon library out from under the studio and placed it under the Cartoon Network’s control. The company says it makes sense for the Cartoon Network to control the entity from which it draws much of its programming. But many at the animation studio saw the move as a way to protect the network’s interest before Warner Bros. assumed control of the library along with Hanna-Barbera.

Hollywood sources say Sassa’s departure could set off a flurry of departures from the tightly knit team he put together over the last four years. Although Betty Cohen is expected to stay on as head of the Cartoon Network, Bradley Siegel and Bill Burke, the presidents of TNT and TBS, respectively, may leave, sources say.

Sassa is expected to be heavily courted, and his name quickly began circulating Monday in connection with Sony, which erupted in management turmoil last week. In fact, Sassa was offered the position at the top of the studio that had been held by Peter Guber, sources say.

He could even wind up at Warner Bros. Studio chiefs Robert Daly and Terry Semel are said to be interested in talking to Sassa about a job in corporate management, although it is unclear what role he would play. With the addition of music and new Turner assets to the group’s portfolio, Semel and Daly are said to be stretched more thinly.

Sassa joined Turner in 1988 as executive vice president of TNT and was promoted to president of the networks in 1990. Two years later, he was given responsibility over licensing, merchandising, home video and the company’s movie library, which it bought from MGM. Before joining Turner, Sassa spent a year as vice president for new business development at Ohlmeyer Communications Co.

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Emerging Picture

Time Warner Inc. is still figuring out how the company will be structured after its merger with Turner Broadcasting System Inc. but here are some likely winners and losers:

WINNERS

* Terence F. McGuirk: The executive vice president of Turner Broadcasting System will retain responsibility over sales and distribution of Turner’s cable networks and assume authority over TNT, TBS, Turner Movie Classics and the Cartoon Network.

* Robert Daly and Terry Semel: The Warner Bros. chiefs are likely to take over Turner’s Hanna-Barbera Cartoons, the film library Turner bought from MGM and Turner’s home video, consumer products, international distribution and interactive operations.

* Jeffrey Bewkes: The head of Home Box Office will report to Turner when the company is restructured, but sources say that will allow him to win favor with the company’s biggest shareholder.

LOSERS

* Scott Sassa: The president of Turner Entertainment Group, unwilling to report to McGuirk, is expected to resign.

* Fred Seibert: The president of Hanna-Barbera Cartoons will probably see his animation studio merged into Warner Bros.