Time Warner-Turner Talks : Not a Done Deal

Several complications in the corporate structure of Time Warner Inc. and Turner Broadcasting System Inc. mean that whether the companies complete the biggest entertainment merger of the summer is not merely up to Gerald Levin and Ted Turner.

Ted Turner

* He turned his father’s billboard company into a cable powerhouse that includes CNN, TNT, TBS and the Cartoon Network. Turner also owns movie companies New Line Cinema and Castle Rock Entertainment.

* After Turner purchased the MGM film library in 1987, Tele-Communications Inc., Time Warner and other cable companies bought into Turner Broadcasting System to help pay down debt. TCI has a 21% stake in the Atlanta company and Time Warner owns another 18%. As a condition of those investments, both companies have veto power over major decisions by Turner.

* Ted Turner has expressed repeated interest in owning a broadcast network, and in recent weeks has met with potential partners who could challenge Westinghouse Electric Corp. for control of CBS Inc.

* On Wednesday, Turner confirmed that he is considering selling his company to Time Warner.

Gerald Levin

* Chairman of Time Warner, an entertainment conglomerate with interests in movies, television programs, cable, music and publishing.

* To bring cash and international partners into the company in 1991, Levin created the Time Warner Entertainment subsidiary, which includes the Warner Bros. studio, Time Warner’s cable operations and the Home Box Office premium cable channel. Time Warner owns a controlling 63% stake, US West has a 26% stake, and the Japanese firms Toshiba and Itochu each hold 5.5%.

* MCA parent Seagram Co. owns a 14.9% stake in Levin’s company, but Seagram Chairman Edgar M. Bronfman may sell it.

* Levin has used Time Warner’s 18% stake in Turner Broadcasting System to oppose Turner’s moves to buy a broadcast network. He has also tried to sell his stake in Turner but hasn’t gotten a high enough price.

* He has made a bid this week to purchase Turner Broadcasting and make Ted Turner his vice chairman.

John Malone

* Chief executive of Tele-Communications Inc., the largest cable system operator in the United States. Although not a majority shareholder, Malone controls TCI and its subsidiary Liberty Media.

* In 1987, Malone invested in Turner Broadcasting System and now has a 21% stake in the company, which gives him veto power over Turner over transactions worth more than $2 million.

* He could veto Time Warner’s proposal to purchase Turner Broadcasting. Even if he does not oppose the merger, he may seek concessions from Turner and Levin.

* He declined Wednesday to state his views on a possible Time Warner-Turner combination.

* Malone has actively encouraged Turner’s discussions with Microsoft Corp.’s Bill Gates and others that might have led to a bid for a television network.

The Stock Prices

Turner (class A) Quarterly highs, except latest:

Wednesday: $30.50, up $6.875

Timer Warner Quarterly highs, except latest:

Wednesday: $41.375, down 87.5 cents