Ted Turner, who died this Wednesday at 87, didn’t do anything halfway. In October of 2006, I got to spend a memorable evening alongside Ted Turner at the opening of his Ted’s Montana Grill Restaurant in midtown Manhattan. I was invited as a “plus-one” by close friend and fellow Fortune writer Pattie Sellers, who’d profiled Turner for the magazine, and hence scored an invite. (Pattie was the pioneering journalist in highlighting women’s achievements as founder of the Fortune “Most Powerful Women in Business” list and our renowned annual conference by that name.) The eatery happened to be situated an elevator ride from our 16th floor offices, on the ground floor of the Time & Life Building. Pattie and I walked from the art-deco style lobby into an 18th-century saloon-style fantasia featuring all manner of bison recipes from pot roast to short ribs to steak frites. Turner owned one of the world’s largest bison herds and championed the fare these bearded beasts provided as a healthier and tastier alternative to beef, while boasting his Grills offered an oasis of “Big Sky sustainability”—plastic straws, no way—amid the canyon of skyscrapers.
When we arrived, Turner was the only other person in the restaurant. He’d played a huge role in building the Time Warner media empire I worked for (Fortune belonged to one of its largest divisions, magazine-maker Time, Inc.), and I’d always wondered about the circumstances regarding his sudden, acrimonious departure five years earlier. To recap the main outline: Turner had sold Turner Broadcasting, owner of CNN, TBS, TNT and the Cartoon Network, to Time Warner in 1996, pocketing around $7.5 billion in the acquirer’s stock. But in 2001, following Time Warner’s sale to AOL, CEO Jerry Levin effectively fired Turner by stripping him of all management authority. Here’s what puzzled me: When Turner sold his creation to Time Warner, he amassed around 11% of its shares. But to get the big payout, this restless entrepreneur reluctantly accepted severe limitations on his power, at least for awhile: The terms imposed a so-called “standstill agreement” that prevented Turner from taking any hostile action versus the company, banned him from purchasing more stock, and essentially required the voluble maverick to back the Levin regime in all big things. The straight-jacket was so tight that Turner even tacitly endorsed the AOL tie-up.
Prior to the AOL purchase, Turner served as Vice Chairman and oversaw his former networks. But Ted Turner didn’t want to be a “Vice” anything. So he posed a big threat to Levin. After a few years, Turner could probably escape his standstill by quitting the board, and press to axe Levin and ascend to CEO. After all, once liberated, he’d wield immense power as by far the Time Warner’s largest shareholder at over 10%.
The Levin-orchestrated AOL transaction, however, effectively neutered Turner. It launched a blizzard of new shares that lowered his ownership in the combined enterprise by over half, to roughly 4%.
Besides Pattie and myself, the only other person to show in the first hour or so was Ted’s actor friend Timothy Hutton. After they chatted briefly, I got a chance to ask Ted about whether the machiavellian maneuvering I suspected actually triggered his ouster: “Do you think that Jerry Levin did the AOL deal, at least in part, to dilute you and ensure you couldn’t marshal your huge shareholder position to replace him as CEO?”
Drawled Ted Turner, “I don’t know if it was the main reason, but I do know that was on his mind.”
Turner apparently believed that Levin thought he was scoring double coup: Getting a huge premium from AOL for Time Warner shares en route to creating a combined dot-com-old media juggernaut that would drive the price higher from there—and in a single stroke, also sideline his chief rival.
As it turned out, shares of the new AOL Time Warner started tanking virtually on announcement of the merger. Turner was so incensed over getting canned and the way the combo was unraveling that he dumped nearly all of his Time Warner stock in 2003, after the shares had cratered almost 80%. He collected approximately $3 billion for a stake that in 1999, pre-AOL, was worth around $11 billion.
Turner volunteered another declaration at Montana Grill’s New York debut that evening: “I lost more money than anyone in the history of capitalism!” he told me. Ted Turner wanted the world to know that he always was Thinking Big, whether it was pursuing the America’s Cup on the seas, transforming journalism via birthing the first 24-hour news platform at CNN, or in all likelihood, aiming to helm the world’s largest media conglomerate at Time Warner. It was part of his outrageous charm that this great promoter had no qualms in broadcasting that the rare time he lost, no one lost bigger.
