Time Warner mum on Perelman rumors

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After a contentious Time Warner shareholders meeting in New York this afternoon, CEO Gerald Levin was asked about rumors that Ron Perelman, boss of Revlon and New World Communications, is trying to buy the 14.9% of the company stock currently held by Seagram's. "I'd prefer not to comment on that," said Mr. Levin. Asked by a reporter if that suggested there was some kind of contact between Mr. Perelman and Time Warner, Mr. Levin appeared to nod his head yes. But he did not utter another word about it and reporters were left to ponder the significance of the nod. The company earlier announced it was selling 15 of its smaller cable systems for $260 million as part of a previously announced effort to pare its debt by $2 billion to $3 billion this year. Since announcing the drive in February, the company has raised $1.3 billion through divestments. Time Warner also said Time Warner Cable and Time Inc. are developing new online and Internet services that will deliver data to personal computers via high-speed cable lines rather than over the traditional but slower telephone lines used by most services. Customers will have access to new services created by Time Inc., as well as the existing Pathfinder and other services on the World Wide Web.

sees internal growth
Capital Cities/ABC has not "ruled out the possibility of a major corporate acquisition," but will continue to focus its growth through expansion of its own TV production and international operations," Chairman-CEO Thomas Murphy told shareholders at the company's annual meeting today. Mr. Murphy noted that "fully valued market prices for media properties in recent years have encouraged us to employ our cash in" directions other than outside acquisitions, including a $350 million pre-tax investment in domestic start-ups and international joint ventures, $100 million of which was made in 1994 alone. Mr. Murphy, however, implied that Cap Cities/ABC would look for more acquisitions in TV station ownership should regulations be lifted beyond the current 25% U.S. household coverage cap. With new acquisitions pending, Cap Cities/ABC will be at 24.5% of U.S. TV homes. "Should the 25% ceiling on ownership be lifted, we would enthusiastically pursue television station acquisition opportunities," he said. But the near-term focus for the company continues to be on expansion of its own TV productions--including those of a recent joint-venture deal with DreamWorks SKG--international operations and cable and new media. Cap Cities/ABC President Robert Iger noted that the company's majority-owned ESPN cable network had "excellent" performance and that its fledgling ESPN2 channel "should be in the black late in 1995, somewhat ahead of projections."

Two weeks into the critical May sweeps ratings period, the four broadcast networks appear to be sweeping up little more than dust from the basic cable networks. The four-network gross rating for the week ended May 14--the second week of Nielsen's May sweeps--is down 12.5% to a 39.1 rating from a 44.7 rating for the same week a year ago. Basic cable is up 22.3% to a 15.9 rating. All other viewing sources appear stable, suggesting that the broadcast network erosion is coming from major basic cable networks, several of which are up significantly: A&E, The Discovery Channel, Lifetime Television, The Nashville Network, Nickelodeon, CNN, Court TV and E! Entertainment. The last three are all benefiting strongly from their coverage of the O.J. Simpson trial. For the week, only NBC showed a gain, up 9.4% to an 11.6 rating. ABC fell 25.8% to an 11.2 rating, CBS was down 17% to a 9.3 rating and Fox dropped 9.6% to a 6.6 rating.

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