Gulf+Western Acquires 20th Century-Fox amid Massive Reshuffling
Wall Street Journal, March 21st, 1985
New York, NY – In a stunning entertainment industry merger, Paramount parent company Gulf+Western has acquired a controlling stake in the 20th Century-Fox Corporation, buying up the fugitive Marc Rich’s former 50% stake from Marvin Davis for a reported $260 million after a short bidding war with News Corporation[1]. Insiders report to the WSJ that the ongoing hostile takeover attempt of CBS by WTBS and ACC has driven Gulf+Western to expand its holdings in anticipation of increased competition and marks another step in the ongoing reshuffling of assets by Gulf+Western in order to focus on entertainment rather than industry. The new company has announced plans to rebrand as the Triad Entertainment Group[2] and will actively maintain the three classic studio labels among other brands. The company is reportedly also considering an expansion into television. The move marks the culmination of a long shift away from a core industrial-based business model for Gulf+Western and into one that focuses on entertainment. “With Triad, we are forging a new path in entertainment,” says CEO Charles Bluhdorn. “Our tools will be the creative arts and our treasure the hearts and minds of our audience.”
Columbia Falls
Wall Street Journal, May 1st, 1985
New York, NY – The venerable Columbia Broadcasting Service, or CBS, has been acquired in a hostile takeover by the Gladstone Group, a joint venture led primarily by Ted Turner’s WTBS and Robert Holmes à Court’s Associated Communications Corporation (ACC)[3], the later flush with liquid funds following the sale of land holdings in Australia. A last-minute attempt at a self-tender and poison pill by CBS has been stymied by a lawsuit launched by the Gladstone Group and reported to be secretly supported by Senator Jessie Helms of North Carolina, a recent CBS shareholder and frequent collaborator with Turner[4]. The sheer speed and ferocity of the combined WTBS/ACC bid, a strategy built upon hard lessons learned by ACC from their recent failed takeover attempt of the Walt Disney company, overwhelmed the unprepared CBS management. With political support from southern politicians, in particular Helms, the FCC is expected to bless off on the deal. Turner is expected to take control of CBS itself as a majority shareholder. Holmes à Court is expected to claim CBS Theatrical Films and CBS’s stake in Tri-Star Pictures and will maintain a significant minority stake in CBS. Columbia Records, meanwhile, is being passed to Gladstone Group minority member Richard Branson and will be integrated as a label under Virgin Music. The publishing group and music group, to include big names such as Fawcett Publishing, Steinway, and Fender, will be divided up and sold off to help pay down the short-term debt incurred by the acquisition.
While Holmes-à-Court’s ambitions for empire are obvious, Turner’s driving force is more of an enigma and many analysts wonder what plans “The Mouth from the South” has for the venerable network. Turner has long spoken of his dissatisfaction with network television, calling it “sleazy and immoral”. He idolizes Rhett Butler from
Gone with the Wind and speaks of himself in military and biblical terms and recalls a complicated relationship with his domineering father. Some have predicted that Turner will “gut” CBS and turn it into a “Father Knows Best” simulacrum of a mythic American moral past. But WSJ is not so sure.
Ted Turner in 1985 (Image source “CNN.com”)
Reese Schonfeld, former president and co-founder with Turner of Cable News Network, describes in Turner a man unlikely to be pushing a moral agenda. “We used to argue at CNN about whether Ted was more interested in power or in glory,” he said. “But we all agreed that money was a distant third, followed by sex[5]. God barely makes the top ten.” Schonfeld calls the takeover “an exercise in reverse-carpetbagging” and predicts that CBS will largely stay the course with the network. “Sure, he’ll start running syndicated re-runs of [The]
Andy Griffith [Show] and
Hee-Haw, and maybe push the sexier stuff to past the family hour, but don’t expect [to see] Jerry Falwell hosting
60 Minutes or anything.”
The takeover brings the Atlanta-based media mogul a true national platform as well as ties to an international market through his “Gladstone” arrangement with Holmes-à-Court. While unlikely to completely abandon their New York City footprint, much of CBS’s operations and administration is expected to be relocated to the less-expensive southern city of Atlanta, Georgia, for integration into the Turner organization, with many CBS executives likely to be looking for work soon. “Atlanta is now right at the center of the world,” said Turner in a recent interview. “I guess the South has risen again!”
* * *
DL: So, Paul, did you see that Ted Turner bought up CBS?
PS: Yes, I saw that.
DL: I guess our friends over on West 52nd can look forward to moving down to ol’ Hotlanta.
PS: Very humid down there.
DL: Well, as a going away gift I’m offering my CBS colleagues a chance to learn how to speak Southern. First off, you need to learn how to say “Yee-Haw!” Can you say that, Paul, “Yee-Haw?”
PS: Yeee-Haaww!
DL: Very good, Paul. You’re a natural. You’re not leaving me for CBS are you?
PS: Grey was never my color.
Excerpt from the May 2nd, 1985 episode of Late Night with David Letterman
[1] This stake was acquired in our timeline by Rupert Murdoch’s News Corp for $250 million.
[2] Tri-Star will threaten legal action over the name, to which Triad will settle out of court with a promise to never market movies or TV under the Triad label, only under the subsidiary labels (Paramount, 20th Century, and Fox).
[3] In our timeline Turner tried and failed to acquire CBS in ’85 after the studio issued a self-tender for the remaining 21% of outstanding shares and he was unable to block the move in court. Here he has a little help from his new friends. Hat tip to
@More Than A Feeling for the Turner Buys CBS idea and another to
@El Pip for an assist on the finance side.
[4] The New York Times reported in 1985 that Helms had purchased several shares of CBS just before the TBS takeover attempt. No formal reprimands came of this action, in part because insider trading by US politicians wasn’t yet forbidden at the time (that rule only came about in the last decade).
[5] Quote is from our timeline up to this point, the rest is my addition.
