NEW YORK, Oct. 10 -- Shareholders of Turner Broadcasting System Inc. voted Thursday to approve Time Warner Inc.'s $6.7 billion buyout of TBS, the final step needed to create the world's largest media company. Shareholders of Time Warner had approved the deal, first announced 13 months ago, earlier Thursday. The Federal Communications Commission had issued its final approval Wednesday when it endorsed the transfer of TBS's WTBS-TV in Atlanta to Time Warner. With the merger, Ted Turner, once ridiculed as 'The Mouth of the South,' becomes Time Warner's largest stockholder with close to 10 percent. In the management ranks as vice chairman, he will be second-in- command to Chairman Gerald Levin. 'I am very pleased that Time Warner and Turner Broadcasting are now one company,' Levin said. 'We have created the world's foremost media and entertainment company with the strongest and best-known brands in our industry and one that investors will find compelling as a superior long-term investment.' Levin has been under considerable pressure from Wall Street to boost Time Warner's stock price, but has been hampered by its massive $18 billion debt load. He indicated this week that there will be about $600 million in cost cuts coming and is reportedly reluctantly considering spinning off Time Warner's cable operations. Turner said, 'Our new company will deploy an unmatched array of content businesses to drive the growth, development and value of the world's leading cable programming networks. We are very confident that the new Time Warner will be extremely well positioned in an increasingly competitive global marketplace.'
The merger creates an entertainment-publishing-broadcasting conglomerate with nearly $20 billion in annual revenues, eclipsing Disney's $19 billion in yearly sales. Disney achieved that distinction earlier this year when it spent $19 billion to buy Capital Cities/ABC Inc. TBS assets include the TBS, CNN, Cartoon, Turner Movie Classics and TNT cable networks, movie producers Castle Rock, Turner Pictures and New Line Cinema and the Altanta Braves and Atlanta Hawks sports franchises. It also owns a vast library of Hanna-Barbera cartoons and old MGM, RKO and Warner Bros. movies. The combined TBS and Time Warner libraries will have more than 6,000 feature films, 28,500 television titles, 6,500 episodes of animation and 600 animated shorts. The TBS movie production assets were put up for sale last month. The key hurdle to the deal was cleared in mid-July when the Federal Trade Commission signed off on the deal over objections that the merged company would dominate the cable industry, controlling access, programming and price, and restricting smaller operators. Time Warner is currently the No. 2 U.S. cable operator after Tele-Communications Inc. But analysts have said that the businesses of Time Warner and TBS do not overlap significantly. Under the FTC settlement, Tele-Communications Inc.'s 9 percent stake in the merged company became non-voting except for major transactions and a provision extending a discount for 20 years on Time Warner programs to TCI was eliminated.
