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NY Biz Note APB Note

March 1, 1985

WASHINGTON (AP) _ The former chairman of the Federal Communications Commission has met with a number of current commissioners to discuss the possiblity of Ted Turner attempting a takeover of a television network, an FCC official said Thursday night.

James C. McKinney, chief of the commission’s mass media bureau, said no specific network was named, but Communications Daily, a Washington-based trade journal said in today’s edition that CBS would be the target.

Former chairman Charles Ferris, now a Washington lawyer, has scheduled a meeting today with the bureau’s chief expert of transfers, Roy Stewart, according to Stewart.

Turner, owner of the Cable News Network and other broadcast properties, in the past has expressed interest in owning a network. About two years ago he suggested a merger of his Turner Broadcasting System with CBS. Fairness in Media, a group of political conservatives also has undertaken a campaign to take over CBS and a spokesman declined to say whether Turner is working with the group. Sen. Jesse Helms, R-N.C., a leading conservative in Congress, is supporting the group’s effort.

Turner was not available Thursday night and a spokesman Judy Borza, said in a telephone interview from Atlanta, ″We have no comment.″

Any transfer of ownership of the radio and TV stations owned by CBS, Inc. would require FCC approval.

The commission was faced with a similar situation some years ago when American Express attempted a takeover of McGraw-Hill, which owned a number of broadcast stations. The proposal was withdrawn before the FCC established any procedures.

″From our standpoint, it certainly is doable,″ McKinney said. He said ″It needn’t be″ a long process.

Stewart said the commission could demand that a trustee be named for the purpose of collecting stock. If enough stock were obtained to gain controlling interest in a broadcast company, the trustee would then file a formal application to get permission to transfer control to the new owner.

He compared it to the procedure used when a radio or TV station goes into bankruptcy and a trustee takes over until the commission has an opportunity to pass judgement on the qualifications of new owners.

Jim Cain, one of three men involved the Fairness in Media attempt to gain control of CBS, refused to say whether his organization has talked to Turner.

In filings with the Securities and Exchange Commission, Fairness in Media revealed it had talked to unnamed third parties about becoming part of the takeover bid.

Fairness in Media has urged conservatives to buy stock in CBS so that like- minded individuals could ″become Dan Rather’s boss.″ Rather is the anchor of the CBS Evening News, which Fairness in Media said has a ″liberal bias.″

On the surface, there would seem to be no legal or regulatory impediments to Turner taking over the CBS stations.

The limits on the number of stations that an individual company could own has just been raised and a combined portfolio of Turner and CBS holdings would be within the limits.

Turner is already an FCC licensee as owner of WTBS in Atlanta and other TV and radio stations, so the commission has already ruled on his suitability as an owner.

There appear to be no cross-ownership problems. FCC rules forbid owning a newspaper and a station in the same city or more than one station in a city. CBS has no stations in the cities where Turner owns stations.

Communications Daily said it was told Ferris tried to determine the commissioners’ attitude toward such a proposal and they told him to ″bring us something″ to consider.

Ferris did not return two calls from a reporter.

Pamela Haslam, a spokesman for the CBS Broadcast Group, said she was unable to reach corporate executives who could repond to inquiries on the matter.

There are 29.7 million shares of CBS stock outstanding. The stock closed Thursday at $84.50, up $3 a share from Wednesday’s close.

The company reported 1984 revenues of $4.5 billion.

William S. Paley, chairman of the CBS board’s excutive committee is the majority shareholder in the company. He holds about 6.5 percent of the shares.

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