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Time Warner Confirms Liberty Talks

5/03/2006 4:56 AM Eastern

Time Warner Inc. executives confirmed Wednesday morning that they were in discussions with Liberty Media Corp. about acquiring the latter’s 50% interest in Court TV, with one hinting that the cable network could be folded into its Turner Broadcasting System Inc. unit.

In a conference call with analysts to discuss first-quarter financial results, Time Warner chairman and CEO Richard Parsons said the company was in discussions with Liberty about its Court TV stake, as well as its roughly $3 billion interest in Time Warner stock.

“We are in discussions with Liberty regarding purchasing their interest in Court TV for cash,” Parsons said. “We are hopeful that we will have something to announce in the very near future. We’re also in discussions with Liberty regarding its ownership in Time Warner, including a possible exchange of a significant portion of that interest for a subsidiary of ours that includes a mix of nonstrategic assets and cash.”

Parsons added that while discussions are ongoing, there is no guarantee that a transaction will be completed.

Liberty’s 50% interest in Court TV has been estimated to be worth $650 million-$750 million. Time Warner already owns the remaining 50% and has had the right since January to force Liberty to sell Time Warner its interest in the network.

Liberty’s $3 billion in Time Warner stock could be swapped for Time Warner’s ownership of the Atlanta Braves Major League Baseball team and cash. The Braves have been valued at about $450 million.

Also on the call, Time Warner chief operating officer Jeff Bewkes appeared to confirm earlier reports in Multichannel News that if a Court TV deal is reached, the network could be folded into TBS.

On the conference call, Bewkes said Time Warner and Liberty have built a strong programming, brand and marketing capability at Court TV.

“Clearly, we will keep that -- we’ve been instrumental in building it for the past 10 years -- and we will preserve the strengths over at Court TV in our people there to continue to increase the strength of the programming, the original programming and the marketing,” Bewkes said.

“Having said that, there are clearly some improvements in the business we can do by using some of the Turner capabilities in either back office in terms of cost, or in distribution in terms of affiliate representation,” he added. “That would, we think, increase the competitive power of Court TV, including the financial results.”

 

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