Word: warners
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Dates: during 1990-1999
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Last week, after an intimidating barrage of corporate complaints, Financial World magazine abruptly dropped the regular column written by the University of California, Berkeley, business professor. Eight months earlier, Crystal -- weary of sideline debates with executives on Time Warner's business side about the theoretical value of chairman Steve Ross's stock options -- had terminated a four-year relationship with FORTUNE...
Specific disagreements finally brought matters to a head. Nicholas last year opposed the rights offering that raised $2.6 billion for Time Warner from stockholders who subscribed to buy additional shares; he had been shaken by the bad publicity that greeted an earlier version of the plan. Some sources say that at one point he proposed selling Time Warner's highly profitable music division to raise cash, an idea that horrified (and no doubt further alienated) Warner executives...
Henry Luce III, son of Time co-founder Henry R. Luce and a Time Warner director, corroborates a widespread report that the "one solid issue" triggering Nicholas' downfall was his attempt to block one of Ross's major deals: Time Warner's sale of a 12 1/2% share in its movie, cable-TV and Home Box Office operations to two Japanese companies, electronics maker Toshiba and C. Itoh, a trading company, for $1 billion. Luce says that while Ross wanted to bring foreign investors into operations that Time Warner would continue to control, Nicholas favored selling off assets outright...
Benjamin Holloway, an outside director of Time Warner, gives a different reason: Nicholas, he says, "was concerned about the Japanese influence in America's communications industry. He thought that we were opening the door to something that might not be too good." By some accounts, Nicholas' opposition not only delayed the deal but forced it to be renegotiated -- on terms less favorable to Time Warner than those originally planned; an executive says the company might have got an extra $100 million to $200 million out of the Japanese if the deal had closed quickly. Ross, says a company adviser...
...Time Warner breaks a paralyzing stalemate...