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24-hour Tv News Market : Turner And Nbc To Join Hands Or Go Toe-to-toe

October 28, 1985|JAY SHARBUTT | Times Staff Writer

This December is special to both NBC News president Lawrence Grossman and Ted Turner, and not just because of the Yule holidays. It may be known then whether Turner and NBC will strike a deal for his Cable News Network or NBC News will start its own.

Dec. 16 is the big day for Grossman. He has told cable-TV operators that if NBC gets the commitments it needs from them by then, it would be prepared by June, 1986, to start up a 24-hour cable news operation akin to Turner's CNN.

Dec. 31 is D-Day for Turner. It's when his Atlanta-based Turner Broadcasting System must have its money package set if TBS is to proceed with his proposed purchase of MGM/UA Entertainment for roughly $1 billion. If not, the deal could fall through.

Turner wants to sell 30% to 40% of CNN--one top analyst says the asking price places CNN's total value at $600 million--to help ease the debt Turner Broadcasting would take on in acquiring MGM/UA. But he wants CNN to retain full editorial control.

NBC wants to get into cable news, and is among "a number" of organizations to whom Turner has offered a minority interest in CNN, Grossman says. But NBC wants full editorial, programming and production control of any cable system it starts or buys "because NBC News cannot be a minority participant in a news service."

Still, to paraphrase Joan Rivers, can they talk? For that matter, have NBC emissaries, as rumored, already begun exploratory talks with CNN? Grossman won't say.

"I don't want to comment on that because I don't think there's any point in speculating," he says. "The only thing I can talk about is what we're doing." That, he adds, consists of "pursuing our own efforts, going full speed ahead."

He says the effort this week consists of letters that NBC is sending to the nation's cable-TV operators. The epistles ask them for comment on an NBC cable news operation, when they'd want it to begin, and include a draft of a commitment NBC would seek from them were it to start its own cable operation.

A knowledgeable industry source considers this the latest step in a corporate dance in which NBC and CNN are wary partners. The observer holds that NBC is playing for time to reduce Turner's asking price, aware that he needs money, and fast, for his proposed MGM/UA deal.

On the other hand, the source says, Turner has what is known as "market presence" in that CNN, expected to turn a profit next year for the first time in its five-year history, is well-established and serves 32 million homes across the nation.

NBC sure would like all that, the source says, not to mention avoiding the major start-up costs it would face were it to open a second cable-news front.

Neither TBS spokesman Art Sando nor NBC's Grossman would comment on such talk.

Grossman, interviewed before a luncheon speech he made last week to delegates to the AFL-CIO convention in Anaheim, said he is mindful that past network attempts at cable have failed--among them the Satellite News Channel of ABC and Group W, CBS' cable entertainment venture, and a similar project by RCA, which owns NBC.

However, although he says NBC certainly would lose money for up to five years were it to proceed on its own with a cable news system, he insists that it could start the operation if cable-TV operators can come up with 13.5 million subscribers.

That, he adds, "works out to a $20 million investment (by the operators) in addition to what we would put in," which would be $50 million.

Were NBC's cable venture to commence, he says, it would operate apart from NBC News, be "a separate enterprise," with its own "substantial" staff.

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