As Ted's World Turns

Ted Turner was basking in the world's attention. Much of the globe, it seemed, turned out last week to celebrate the 20th anniversary of his genius invention, CNN, the 24-hour cable-news channel. CNN journalists from 130 countries mingled with such CNN household-name stars as Bernard Shaw and Larry King at the cable channel's Atlanta headquarters. Vladimir Putin beamed in via satellite from Moscow for the weeklong affair. Al Gore, George W. Bush and Jordan's King Abdullah dropped by. Former president Jimmy Carter addressed the gathering as Turner sat with U.N. chief Kofi Annan.

It was a rare peaceful moment for Turner, one of the world's most mercurial billionaires. Always a favorite of gossip connoisseurs, Turner, who separated from his wife, Jane Fonda, in January, has made headlines recently with his dating antics. In recent weeks, New York tabloids had Turner paired off with a 28-year-old New York college professor. Although the woman seemed to confirm the dalliance, the tabloids themselves later engaged in crosstown sniping over whether the accounts were exaggerated. In fact, Turner's been stepping out with fiftyish, French-born artist Frederique D'Arrago. Meanwhile he has resumed his noisy campaign to buy a network and has made no secret of his displeasure with what he deemed to be a diminished role assigned to him at the merged AOL Time Warner. If the deal goes through, Robert Pittman, AOL's No. 2 and a chief operating officer in the combined company, will end up running the giant's major operations, including the Turner networks--CNN, the Cartoon Network and TBS, among others. As a vice chairman, Turner would have no operating role. (Turner sold his Turner Broadcasting System to Time Warner in 1995.)

Time Warner doesn't need another public-relations problem just as it's trying to pull off its massive merger with AOL. First there was the disastrous nearly two-day blackout by Time Warner Cable of the ABC network. Then there was an embarrassing plot to undermine a phone-company rival--a Time Warner cable unit reportedly encouraged its own employees to sign up for and then cancel high-speed Internet connections from the competing firm. The recent rumbles from Turner have added to a sense that with friends like each other, the AOL and Time Warner execs don't need enemies.

Given the timing--with regulatory hearings set for Washington and shareholder votes due this month--making nice to Ted was a high priority for AOL and Time Warner top brass last week. In a speech at the CNN shindig, Turner's future boss, AOL's Steve Case, declared that Turner was his "hero" and that they would "be joined at the hip" in mapping AOL Time Warner's future. Turner, seated with D'Arrago, seemed blissful during Case's address. Afterward Turner declared, "I'm happy."

How long his good mood will last is debatable. In an interview with NEWSWEEK, Turner, true to form, was coy about his feelings concerning his role in the planned company. First, he claimed, he'd never really been upset about it. Then he admitted that "change is always difficult for older people." And if he were to end up exercising broader powers at AOL Time Warner, Turner hinted, he might try to land a broadcast television network, a longtime goal. "I've got ideas... like getting a network," Turner said.

AOL and Time Warner execs insist that Turner continues to support the transaction. Indeed, Turner has already made a binding agreement to vote his nearly 10 percent Time Warner stake in favor of the deal. Case told NEWSWEEK that he has consulted Turner repeatedly before and since the deal was announced. About six weeks ago, he said, he traveled to Atlanta to discuss Turner's concerns and priorities. Among other things, they talked about the structure of the new company. Turner, Case said, had embraced the management lineup and the idea of serving as senior adviser, without an operating role. It may simply be a case of "separation anxiety," Case says, as Turner becomes further removed from running his cable networks. "When you build something and it's your baby, there's a little bit of a mental transition" to make, Case says. "It's an adjustment issue."

OK, but what about that TV network? Case says it's not happening. Turner "has talked to me about that and other ideas," Case said. "I'm an eager listener." But the focus now is "merging AOL and Time Warner," he added. "This is not the right time to be thinking of other acquisitions." But while a new network might not be in the picture, a big expansion into cyberspace is. CNN has embarked on a hiring binge to quadruple's staff to 800 by the end of the year. CNN intends to use its news-gathering might to launch new online channels.

Case and his AOL crowd hope Turner's angst is the last of the self-inflicted controversies facing AOL Time Warner. One AOL official said the Internet giant was caught off guard by Time Warner's blackout of Disney's ABC in a dispute over distribution of Disney programming. AOL was aware of bumpy negotiations between Time Warner and Disney and Time Warner informed Case before the blackout. But a top AOL insider confirms that Case was phoned, "but only after the button had been effectively pushed." The AOL exec added: "This was clearly a business and policy mistake." Case said "there's no question" that AOL Time Warner had been hurt in Washington by the controversy. Still, he said he expects the deal to go through.

Turner, meanwhile, has other things to occupy him. Ted's new gal pal D'Arrago is wealthy, with homes in New York, Palm Beach, Rio de Janeiro and Paris, according to an Atlantic Constitution interview with Turner biographer Porter Bibb. After Bibb's biography was published in 1993, he told the paper, D'Arrago sought out the author to help her mount a show. Among her works: portraits of Turner posed as Adm. Horatio Nelson, Robert E. Lee and George Washington. Well, for his work revolutionizing cable TV, Turner has certainly earned his place in the gallery of business greats. Yet despite the Atlanta peace talks, it remains to be seen just where his picture will hang in the halls of corporate power at the combined AOL Time Warner.