TBS

"HBO was a premium service, around $10 a month, but most others were free to consumers, and ad-supported, like TBS and USA. I had always expected nominal fees from networks, but, until hearing about MTV’s plans, I never had imagined that cable networks would have the market power to create a dual revenue stream: fees from the distributors carrying their network, on top of the money that advertisers paid to air commercials on it. All this time, I had valued the *distribution* part of the company, and now more of the future value might well lie in *content*."

"The combination of the Warner Bros. studio, Time’s magazines (including *Time, People*, and *Sports Illustrated*), HBO, and Ted’s networks, including CNN, TBS, and TNT, was an impressive medley of assets, but it offered little true synergy beyond financial machinations, in my opinion. Time had barely proven the validity of its merger with Warner Communications, five years earlier, in 1990. Jerry was scrambling to get the stock price up, even as he was trying to quash the internal infighting that would become a hallmark of Time Warner’s corporate structure."

"By 1982, TCI had built itself into the nation’s largest cable company, but the biggest deals were yet to come. More scale equals more savings, which gave us more buying power to buy more systems and build more scale, which equaled more savings—a virtuous growth cycle. When I wasn’t raising money in the 1980s, I was flying from city to city, making promises to politicians where we owned cable-TV franchises, or where we were trying to buy them. Big established media companies were now elbowing in to buy or build cable systems—not in the rural towns where the industry was born but in the big cities where urbanites were eager to explore the new national networks like HBO and TBS."

"In September 1995, Ted had made up his mind, and Time Warner agreed to pay $7.5 billion for Turner Broadcasting, creating the largest entertainment company in the world. Jerry Levin would keep his CEO/chairman title and Ted would be vice chairman, responsible for the cable networks of both companies, including HBO. When the deal finally closed, and the TBS shareholders exchanged each TBS share they owned for three-quarters of a Time Warner share, Ted, overnight, would become a billionaire, with his personal holdings in TBS stock worth north of $2 billion."

"He had exhausted even the financially elastic mind of Mike Milken to find another acquisition for TBS. With the takeover threats from Kirk Kerkorian and others still fresh in his mind, and consolidation and vertical integration going on around him, Ted felt it was time to think seriously about joining forces with somebody."