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The Atlanta Journal and Constitution

By The Atlanta Journal-Constitution

Feb. 17--Time Warner is deep into discussions to sell Atlanta-based regional cable channel Turner South to Fox, three people familiar with the negotiations said Thursday.

Fox, a Los Angeles-based television company, is not attempting to buy the Atlanta Braves, the other part of the package put up for sale by Time Warner in December, the sources said.

Turner South is a 7-year-old channel with programming that includes Atlanta Braves, Hawks and Thrashers games. A new owner would inherit Turner South's long-term broadcast deals with the city's baseball, basketball and hockey teams.

"We are in discussions to sell Turner South but are not going to comment on any of our negotiations," said Shirley Powell, senior vice president of corporate communications for Turner Broadcasting, the Time Warner division that includes Turner South. She said no deal has been reached.

A Fox spokesman said the company had no comment Thursday.

The talks with Fox Cable Networks -- said to be far along by people familiar with them -- signal that Time Warner expects to sell the Braves and Turner South to separate buyers.

"We are exploring the sale of both assets," Powell said. "Whether [the Braves and Turner South] were going to be sold together or separately was always going to be a discussion and a negotiation. We never really specified they had to be sold together."

Fox briefly owned the Los Angeles Dodgers baseball team and has shown no appetite for returning to professional sports ownership.

John Mansell, senior analyst with Kagan Research, has estimated the value of Turner South at $200 million.

Separately, Time Warner continues to pursue a sale of the Braves.

The company has had a series of meetings and discussions with representatives of Atlanta Falcons owner Arthur Blank, who expressed interest in a possible Braves purchase immediately after the team was put up for sale. Those discussions have continued this week.

Blank has been apprised of Time Warner's asking price for the baseball team -- believed to be slightly above $400 million. It is not known whether he will prove willing to meet or approach it.

The company has said that "a lot" of potential buyers are interested in the Braves, although Blank was the first to be approved by Major League Baseball to enter substantive negotiations.

According to people familiar with the situation, the parties principally interested in buying the Braves have tended to show little or no desire to own a cable channel, while those interested in Turner South have shown little or no interest in owning the Atlanta baseball team.

Fox owns a string of regional sports networks around the country, including Atlanta-based FSN South, which is the nation's largest regional sports network, with more than 11 million subscribers.

Under new ownership, Turner South, which is seen in six Southeastern states, could be converted into an all-sports network by dropping its lineup of other programming and expanding sports coverage to fill the gaps. That could give Fox two regional sports networks in the Southeast, which offers ample programming with the popularity of both college and professional sports.

Mansell, the Kagan Research analyst, said there's little chance that Fox would close down Turner South in favor of operating just FSN South. If Fox buys Turner South, "they're going to try and operate with two channels" in the Southeast, Mansell said Thursday. "That'll probably give them some flexibility going forward to go after more regional sports."

Many markets support two regional sports networks. New York, Mansell noted, has four. In Los Angeles, Fox operates two such networks, FSN West and FSN West 2.

Atlanta, meanwhile, is served by FSN South and a Comcast-owned channel, CSS.

Fox was once angry over the creation of Turner South. In 1996, Fox bought Turner's interest in the old SportSouth. When Turner launched Turner South in 1999, Fox sued, claiming violation of a non-compete clause. The case was later settled.

If Fox buys Turner South, there is little chance that the Turner moniker will survive. Namesake Ted Turner has, in the past, famously feuded with Rupert Murdoch, chairman and chief executive officer of Fox's parent company, News Corp. That Murdoch would keep the Turner name seems unlikely.

Turner South has been a poor financial performer for its parent company. Turner South has about 8.3 million subscribers and, in addition to sports programming, shows fare such as old movies and original series such as "Bushwhacked," a program about "lawn makeovers."

By Tim Tucker and Scott Leith

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