BusinessFILE - Turner Broadcasting Chairman and President Ted Turner, left, and Time Warner Chairman and CEO Gerald Levin pose for photographers prior to a news conference at the Time Life Building, Friday, Sept. 22, 1995, in New York. Levin, who led Time Warner Media into a disastrous $112 billion merger with the internet provider America Online, died Wednesday, March 13, 2024. He was 84.
Within two years, Levin, then HBO president, managed to convince Time brass to invest the then-immense sum of $7.5 million to distribute HBO's signal via satellite, negating the need for even more expensive investments in laying cable or building microwave networks across the U.S.
Levin and his lieutenants had managed to completely overlook the internet, which eventually managed to bring full-scale interactivity to homes, businesses — and phones — around the world. That wasn't obvious at first, of course. Only in mid-1997, when Microsoft co-founder Bill Gates invested $1 billion in the cable company Comcast to push forward its internet service plans, did investors start to grasp the value of cable networks as internet providers.
The two sides wrangled over how much of the combined company they would each control, with AOL insisting on holding the majority thanks to a stock price that just kept rising. Finally, in the early hours of Jan. 7, 2000, Time Warner agreed to accept a 45-55 split, with AOL holding the larger share. Three days later, the Wall Street Journal broke news of the pending $182 billion deal, and the companies issued a formal announcement later that morning.
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