Turner To Leave Time Warner
Saturday, February 25, 2006
Ted Turner, the innovative, outspoken founder of Cable News Network, severed his relationship with Time Warner Inc. yesterday, leaving him on the sidelines of a media industry he revolutionized with the launch of the first 24-hour news network in 1980.
Time Warner announced that Turner had decided not to stand for reelection to its board of directors at the annual shareholders meeting in May.
Always unpredictable, Turner leaves many wondering what he will do next. Some observers predict that -- freed of entanglement with Time Warner -- he will seek to reenter the media business. A Turner spokesman sought to quash such speculation, saying philanthropy will occupy Turner's time.
"His reason for not seeking reelection is to refocus his energies on some of his interests outside of Time Warner and those include his big three philanthropies," said Phillip Evans, spokesman of Turner Enterprises, which manages Turner's landholdings.
But Reese Schonfeld, the first president and chief executive of CNN, notes that Turner derived his greatest satisfaction from creating the cable network. "He's been somewhat frustrated by not doing anything," Schonfeld said. "This frees him up to do lots of things. One would be to go back into the media business."
That business, however, is much trickier -- and faster moving -- than it was 25 years ago. Mark Fratrik, a media analyst at Chantilly-based BIA Financial Network Inc., said that if Turner wanted to start a media company, the venture would be fraught with risk -- even for a man of his stature.
"The business is so dynamic now with so many different companies having so many assets and using them in different ways," he said.
Just why Turner left the board at this time remains a question. His departure follows a Time Warner settlement last week with activist shareholder Carl C. Icahn, who was seeking to split the company into four parts and take control of the board.
"It may be that he saw with Icahn's failure, the stock price wasn't going to go anywhere for a while," Schonfeld said. "His departure shows a lack of faith in where Time Warner's stock price will be."
Turner was Time Warner's largest shareholder after the merger with AOL in 2001 -- a marriage he later criticized. He sold more than half of his holdings after the company reported a $98.2 billion loss in 2003. Turner told CBS News correspondent Mike Wallace that year that the company's tumbling stock cost him between $7 billion and $8 billion.
Schonfeld finds another smaller reason Turner may have decided to step away now. One of Turner's strongest interests is in promoting world peace and the United Nations. In 1997, he pledged to commit $1 billion to the United Nations. Last month, CNN cancelled a talk show about the United Nations called "Diplomatic License," which had aired for 12 years. Schonfeld believes Turner found the move particularly galling.
"This may have emphasized to Ted just how little of his dream was left," said Schonfeld, author of a memoir called "Me and Ted Against the World."
"It made him feel somewhat that his position on the board was futile -- he still couldn't stop this kind of stuff."
Also announcing plans to leave the board yesterday was Carla A. Hills, a former U.S. trade representative, who will step down in accordance with Time Warner's rules on retirement. In January, another board member, Miles R. Gilburne, a former director of America Online, decided not to stand for reelection at the May shareholders meeting.
The vacancies will give Time Warner the opportunity to recommend the election or appointment of two new independent directors, as agreed under its settlement with Icahn, who will be consulted in the process. Time Warner will announce its full slate of board candidates in late March or early April, spokeswoman Susan Duffy said yesterday.
Time Warner's chairman and chief executive Richard D. Parsons yesterday praised Turner as a visionary who made extraordinary contributions to the company and the world. "Ted Turner's legendary record as a media pioneer and executive at Turner Broadcasting and Time Warner speaks for itself," he said in a statement.
For a man who often shoots from the hip, Turner was uncharacteristically subdued in his own comments. He noted in a statement that his decision came after much deliberation then added, in a tone one wouldn't expect from a man who once called Fidel Castro a hell of a guy: "I have enjoyed working with Dick Parsons as well as the other board members and the management team. I wish Dick Parsons and my fellow directors the very best."