Turner Plans New Channel

Turner Broadcasting System plans to launch its first new cable channel since 1994, a general entertainment network for the southern region that will feature country music, lifestyle programming, classic wrestling matches, movies and sports.

The new channel, Turner South, will roll out this fall and could serve as a model for other regional networks from Turner, which is owned by Time Warner Inc., according to Bill Burke, president of TBS Superstation, who will supervise the new network.

Time Warner controls the largest concentration of cable channels, including CNN, Home Box Office, the Cartoon Network, TBS and TNT.

The new channel is designed to capitalize on Turner’s Atlanta base, targeting 6 million cable subscribers in Alabama, Georgia, Mississippi, South Carolina, Tennessee and North Carolina.

But even before the launch, News Corp. is challenging Turner’s plans in a bid that could reignite a bitter rivalry between the company’s respective heads, Rupert Murdoch and Ted Turner, the vice chairman of Time Warner. News Corp. contends that as part of the sale of Turner Broadcasting to Time Warner in 1995, Ted Turner sold his company’s 44% share in a regional sports network called SportsSouth to Liberty Media Corp. and signed a non-compete agreement prohibiting him from launching a channel that airs sports programming.

Liberty contributed the interest in SportsSouth to a partnership with News Corp. that owns a national patchwork of regional sports networks under the banner Fox/Liberty Networks.

“They entered into an agreement with us under which they would not do this for many years to come,” said Vince Wladika, a spokesman for Fox Sports, a division of News Corp. Sources say the non-compete agreement runs well beyond 2000.

In a news conference, Burke would not specify how reliant the new channel will be on sports, other than to say that Turner South will carry the games of the TBS-owned teams, baseball’s Atlanta Braves, basketball’s Hawks, and hockey’s Thrashers, not being carried on other networks. Fox/Liberty’s regional sports network airs some Braves and Hawks games.

John Mansell, a sports analyst at Paul Kagan Associates, said Fox/Liberty’s non-compete agreement might not stand up to a court test. “The courts tend to frown on non-compete covenants if they are too broad or the time frame is unreasonable,” he said.

Turner and Murdoch have been rivals in news and sports, with Turner the sole vote among baseball owners last year against News Corp.’s purchase of the Los Angeles Dodgers. This squabble could pit Turner against one of Time Warner’s largest shareholders, Liberty Media, which helped save Turner Broadcasting from bankruptcy in the early 1990s and turned its huge stake in the company into a roughly 8% share in Time Warner after the merger.

Industry executives say specialty regional channels are becoming more popular as cable operators search for ways to distinguish their TV packages from the national satellite services that in five years have captured 10% of all pay TV subscribers.

Sources say that will be Turner’s pitch to get cable operators to free up capacity on their overcrowded systems for its new channel. In addition to the Fox/Liberty sports networks, a smattering of local cable news channels have cropped up.