The media house Ted Turner built is being shaken again, raising questions about will happen to the Atlanta upstart that helped shape the area’s international image and became one of its largest employers.
The latest rattling comes after Time Warner, parent of Atlanta-based Turner Broadcasting, confirmed this week that it rejected an $80 billion takeover bid by 21st Century Fox.
Such rejections often aren’t the last word. Industry analysts expect further bids by Fox and, perhaps, other media and technology giants.
Bidders would be vying for not only Time Warner’s HBO and Warner Bros. movie and TV operations, but also the substantial and profitable chunk of the company that helps anchor downtown and Midtown Atlanta.
Turner Broadcasting has about 6,500 local employees, half its workforce. That includes many of those working at CNN and entertainment networks such as TBS, TNT and Cartoon Network. Turner as a whole accounts for 44 percent of Time Warner’s profit and the unit holds lucrative sports rights with the NBA, Major League Baseball and college basketball.
Takeovers can lead to cutbacks and even relocations. But Fox’s apparent main motivation is to gain control of attractive media properties and programming rights, rather than to consolidate competing operations.
Yet if a takeover happens, cuts are likely somewhere. One analyst, Todd Juenger of Bernstein Research, suggested $2 billion worth of reductions might be possible across the blended companies.
Rajeev Dhawan, who directs the Economic Forecasting Center at Georgia State University, thinks it unlikely a corporate buyer would attempt to move the bulk of Turner Broadcasting’s substantial operations out of metro Atlanta, saying it would be too expensive. “Anybody who buys them is not going to easily move it,” Dhawan said.
But he said he could envision executives being shifted elsewhere if there is a takeover.
Turner helps feed professional services businesses in the area, said Roger Tutterow, a Mercer University economist in Atlanta. But Turner’s local presence has a broader payoff for metro Atlanta, particularly because of CNN, he said.
“It has traditionally been one of the big marquees of the city,” Tutterow said. “CNN is recognized globally in a way that few businesses are.”
It’s expected CNN would be sold to a separate buyer if a Fox buyout succeeds, due to Fox’s ownership of archrival Fox News.
Built by once swashbuckling capitalist Ted Turner, CNN and Turner Broadcasting helped shake up a broadcast network-dominated TV landscape back in the day, doing so from the seemingly unlikely perch of Atlanta, far from the media centers of New York.
Turner Broadcasting is “part of our culture here, our entrepreneurial culture and creative culture,” said A.J. Robinson, president of downtown Atlanta’s business district, Central Atlanta Progress.
“Hopefully, whatever scenario takes place, that organization will remain headquartered here.”
Turner Broadcasting has been through shakeups before. Turner agreed in 1996 to sell his company to Time Warner, whose disastrous combination later with AOL further diluted Atlanta’s role. Eventually Turner lost his say over Turner Broadcasting and left its board. He watched as some of his prized projects, including the Goodwill Games and Captain Planet environmental kids programming were cut.
The idea of Turner Broadcasting eventually falling into the fold of 21st Century Fox and its dominant shareholder, Rupert Murdoch, would have been unthinkable when Turner was at the helm and regularly clenched his fists at the mention of Murdoch’s name. The two sparred over the rise of cable network Fox News, which now soundly beats CNN in overall ratings.
Over the years Turner Broadcasting’s top executives have moved away from Atlanta.
Turner chief John Martin, CNN head Jeff Zucker and HLN’s new general manager, Albie Hecht, are all based in New York. There’s speculation that whoever replaces recently departed Turner Entertainment president Steve Koonin may end up in Los Angeles or New York.
Much of Turner’s programming, scheduling, technology, finance and marketing employees remain here, and most Turner Sports employees are here. Advertising sales operations are heavily concentrated in New York, as has been the case for a long time.
“Atlanta is still a big hub and has been a great community partner,” said Al Meyers, a former Turner strategy executive who left in 2008 after 13 years. “But certainly the balance has tipped a bit.”
He said when Time Warner bought Turner, the company already had major operations in New York that could be integrated into Time Warner proper. 21st Century Fox is also based in New York. He said it’s difficult to judge at this point what Fox or any other buyer would do in terms of consolidating operations.
Meyers said Time Warner has largely allowed Turner to operate semi autonomously.
“Turner has always had good management and made its numbers. The business has been well run despite the fact it’s now a mature business, despite the fact it faces plenty of near term and long term challenges as people migrate to digital platforms,” Meyers said.
Turner employees’ economic impact ripples across the metro area, said Demming Bass, a local economic development veteran who served in both Cobb and Gwinnett chambers of commerce.
“Turner being in downtown Atlanta definitely I think has an impact with Cobb, for example; it’s just a few minutes away,” Bass said. It has also defined the region as a media center, which draws related business.
If more top executives are shifted elsewhere, the company’s community connections wane, Bass said.
“I think that does have an effect on decisions, when it comes to employees decisions, when it comes to supporting nonprofits, when it comes to supporting the community financially — their concern is going to be supporting where they live.”