NEW YORK, Sept. 29 -- Former junk-bond king Michael Milken will get $50 million for advising Ted Turner in the $7.5 billion sale of Turner Broadcasting System Inc. to Time Warner Inc., a published report said Friday. The Wall Street Journal reported Turner will pay about $10 million out of his own pocket to Milken, who was imprisoned for two years for bond swindling and banned permanently from securities and investment advising, with the balance coming from TBS. TBS had no immediate comment on the report. The newspaper said Turner initially proposed paying Milken $100 million, but the idea was squelched by John Malone, chairman of Tele- Communications Inc., who has veto power over any TBS expenditure of more than $5 million by right of TCI's 21 percent stake in TBS. The Securities and Exchange Commission's 1991 order bars Milken from 'association with any broker, dealer, investment adviser, investment company, or municipal securities dealer.' However, there is nothing in the order that requires him to receive SEC approval for any business arrangements and Milken has been emerging as a major player in the telecommunications industry. Milken, who has prostate cancer that is in remission, acted as a go- between for the recently announced $1 billion investment MCI Communications is making in News Corp. He introduced MCI Chairman Bert Roberts Jr. to News Corp.'s Rupert Murdoch at a Milken-sponsored conference on education. Turner, who is believed to be due to receive a five-year compensation package valued at between $125 million and $150 million if the Time Warner deal goes through, has ties going back many years with Milken, dating back to the days when Milken was the king of the junk-bond empire at Drexel Burnham Lambert.
Drexel raised $1.4 billion in high-yield bonds in 1986 for TBS to finance the $1.5 billion purchase of MGM/UA Entertainment Co. and another $550 million in bonds in 1989. Milken pleaded guilty to six felonies, including conspiracy and securities fraud, in 1990. The plea bargain allowed him to avoid the toughest charges in a 98-count indictment that included accusations of insider trading. Milken served 22 months of a 10-year sentence at the Federal Prison Work Camp in Pleasanton, Calif., before winning early release in early 1993 for cooperating with authorities in their investigations into other Wall Street traders. Milken has paid $1.1 billion in fines and civil settlements. However, observers believe he still controls a fortune conservatively estimated at more than $500 million -- mostly held in investment partnerships set up during his tenure at Drexel. Additionally, vast profits from those partnerships may have gone into accounts controled by Milken's immediate family members.