Friday, January 31, 2003
New York Ted Turner's departure as vice chairman of AOL Time Warner Inc. renewed talk about merger negotiations between CNN and ABC or the possibility that Turner would consider buying back the cable network he founded.
Business analysts were mulling both possibilities Thursday, despite the tremendous obstacles that stand in front of both.
Turner, who founded CNN in 1980 but, through AOL Time Warner corporate infighting, lost control over the network in recent years, was reportedly opposed to CNN merging operations with the Walt Disney Co.-owned ABC News.
Merger talks were put on hold last month by AOL Time Warner chief executive Richard Parsons. He said negotiating control proved very complex. The same problems scuttled merger talks between CNN and Viacom Inc.-owned CBS News.
Those concerns aren't likely to change with Turner out of the picture. There are also worries that the deal won't save both companies the kind of money that was predicted -- up to $200 million in some reports, said Ken Auletta, media writer for The New Yorker magazine who is writing a book about Turner.
"CNN and ABC is a very difficult deal to put together," said Christopher Dixon, an analyst for UBS Warburg. "Although it makes sense on paper, there are some significant cultural differences. We still live in a world where it is difficult for farmers and cowboys to be friends."
Turner is "apoplectic" about what has happened to CNN, said Porter Bibb, an analyst for Technology Partners and another Turner biographer. Turner built a network with an unglamorous focus on news and, in the past few years, CNN has tried jazzy promotions of personalities like Connie Chung, Aaron Brown and Paula Zahn.
But CNN has lost its ratings pre-eminence to Fox News Channel, and the gap between the two is widening.
In an interview for "60 Minutes II" to be broadcast next week on CBS, Turner conceded it was difficult not to have a role in CNN but was diplomatic when asked what he thought of the network's direction.
"I think basically that CNN is doing a pretty good job," Turner told CBS newsman Mike Wallace. "I mean, there are some things, obviously, that I don't like, but I'm the old fuddy-duddy that it reported to for 22 or 23 years, so, I mean, obviously any changes are going to give me trouble."
Auletta said his immediate thought after Wednesday's announcement was that Turner might try to reacquire CNN. But he concluded it was unlikely.
Turner, who told Wallace he has lost between $7 billion and $8 billion because of tumbling AOL Time Warner stock, may no longer have the resources to buy back his creation, he said.