Word: deale
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Dates: during 1980-1989
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...potential clout in the increasingly fierce international battle for the attention of readers, filmgoers and television viewers. The New York Times proclaimed that the union would "insure Time Warner a place in the 1990s as one of a handful of global media giants." Declared the Chicago Tribune: "The deal creates a corporate dynamo." In Munich the daily newspaper Suddeutsche Zeitung disagreed, predicting that the union would be a "Tower of Babel." And on Wall Street, where there had not been much excitement since the contest for RJR Nabisco, investors and speculators were agog over the proposed $9.5 billion exchange...
Time Chairman Richard Munro and Warner Chairman Steven Ross, who agreed to share power as co-chief executives of the new company, were confident that their deal would withstand any challenges. Said Munro: "We are not for sale." Time President N.J. Nicholas will take Munro's slot as co-chief executive of Time Warner if Munro retires in 18 months as planned. To strengthen their position, the two companies have also agreed to exchange some 10% of each other's stock in advance of the merger...
...Warner spends money on generous executive compensation (for Ross alone in 1987: $4.5 million in salary and bonus) and corporate amenities like the six-bedroom Acapulco villa for entertaining movie stars. Siegel also apparently believes that Warner is being undervalued in the merger agreement. When the proposed deal came up before Warner's board for a vote, Siegel abstained, while all the other members approved. Time and Warner officials, who are trying to convince Siegel of the merger's merits, admit that he could take legal steps to delay the transaction, but they insist he cannot stop...
...with any large merger, the Time-Warner deal will be reviewed by the Government to see if it poses any antitrust or other regulatory problems. The only major overlap between the two companies is that they are both big operators of local cable-TV systems. After the merger, Time Warner will serve 5.6 million customers, or 12% of U.S. households with cable. The new operation will still be smaller than the largest cable company, Tele-Communications, which serves 24% of the industry's customers. Experts say that unless President Bush takes a tougher antitrust stance than the Reagan Administration...
Nonetheless, Ohio Democrat Howard Metzenbaum, chairman of the Senate antitrust subcommittee and a vocal critic of big mergers, immediately objected to the proposed combination. He acknowledged that the deal did not appear to violate the Government's guidelines for "horizontal concentration" within an industry, but asserted that those "guidelines are clearly inadequate for a complete evaluation of this merger." The Senator expressed concern about companies being involved in both the production and distribution of cable-TV programming. Metzenbaum noted that in most communities there is only one cable operator. He fears that such operators might rely too heavily on programs...