"Okay, wow!" exclaimed a slightly flustered Ted Turner, as though he could hardly believe the audacity of what he was about to propose. Facing a bright battery of TV lights at a Manhattan press conference, the self-made cable king announced last week that he will try to take over CBS, the country's top-rated TV network. Following more than a month of rumors, Turner had finally raised the curtain on what could become one of the most dramatic takeover dramas yet.
Turner has put forth a novel, no-cash financing plan. His Atlanta-based Turner Broadcasting System will offer a complex package of several types of stocks, bonds and other securities worth $5.4 billion in exchange for all 31 million CBS common shares. The deal could take more than a year to complete, even if it comes offsmoothly, which is unlikely. Despite Turner's reputation for accomplishing the near impossible with such ventures as Cable News Network and SuperStation WTBS, the proposal represents an almost incredible reach. Wall Street financiers are skeptical that Turner Broadcasting, which had 1984 revenues of $282 million, has the muscle to endure a long fight with the giant media conglomerate (revenues: $4.9 billion). Yet some industry experts had predicted that Turner would never even manage to engineer a serious offer.
Sweeping out of last week's press conference like Errol Flynn in a gray suit, the triumphant Turner embarked on a twelve-block march to his law firm's Madison Avenue office. It seemed almost like a nose-thumbing gesture toward doubters in New York City's media and financial communities. "Hey, it's Ted!" cried star-struck pedestrians. Said one admiring businessman to a colleague: "That guy's got a lot of nerve!"
Turner needs more than just a brash concept. The merger he is proposing will be far tougher to arrange than last month's $3.5 billion take-over of ABC by Capital Cities Communications. In that deal, the vulnerable ABC willingly agreed to merge with the smaller firm in order to protect itself from undesirable suitors. But CBS is financially brawny and ready for a fight.
At the CBS annual meeting of stockholders last week in Chicago, Chairman Thomas Wyman affirmed his company's defiance toward the would-be raider. Before a crowd of 300 shareholders and 80 reporters, Wyman lashed out at Fairness in Media, a North Carolina-based conservative group and potential Turner ally that wants to see CBS taken over in order to end what it sees as a liberal bias in the network's news division. Declared Wyman: "Those who seek to gain control of CBS in order to gain control of CBS News threaten its independence, its integrity--and this country."
The North Carolina organization, pet project of Senator Jesse Helms, announced in January that it hopes to take over CBS by persuading conservatives across the U.S. to buy shares in the company. James P. Cain, a Fairness in Media co-founder, pronounced the group "delighted" by the Atlanta tycoon's move and promised its support.
While Turner backed away last week from any formal ties with the group, he pledged "to improve the quality, objectivity and diversity of CBS programming." In the past, Turner has criticized network fare in general for its "sleaze, stupidity and violence." His flagship station, WTBS, currently offers sports broadcasts and family-oriented material, including reruns of The Beverly Hillbillies, a show that CBS dropped in 1971.