Forbes Article on Time Warner Seen as Payback

NEW YORK —  Last February when magazine publisher Steve Forbes was trying his hand at presidential politics, Fortune magazine published a scorcher of an article about Forbes and his family’s business magazine.

Now, at Fortune’s parent company, Time Warner Inc., there are grumbles that the Forbes clan has taken its revenge. In a harshly worded article in its May 20 issue, Forbes magazine says Time Warner is so loaded with debt and beset with management turmoil that it is “at a dead end.”

Or, as a headline puts it, “Like a great beached whale, Time Warner has lost its freedom of action, while folks of all description whack chunks of blubber off its sleek hide.”

Time Warner representatives said they had no official comment on the article, but several insiders had been suggesting for several days that this was “payback time.”

Not so, Forbes Editor James W. Michaels said Monday. “You know where that whole revenge thing came from,” he said. “That is from Time Warner itself. . . . It’s damage control, an attempt to get attention away from the story and make people think that it’s some kind of spitting match” between the two business publications.

As for the article having unusually tough language, Michaels said Forbes is “rather proud of doing tough stories. I don’t think it’s as tough as some of the other stories we’ve done over the years, and if you go through it you’ll see it’s very, very heavy on facts and figures.”

Media analysts familiar with Time Warner said that although many of the criticisms in the Forbes piece could be made legitimately, alternative arguments could be made in favor of a company with such strong assets.

For example, the story is intensely critical of Time Warner Chief Executive Gerald Levin’s negotiations with Ted Turner, calling Levin’s actions “almost comic” in dealing with the head of Turner Broadcasting System Inc.

But other analysts suggested that if the Turner merger works right, Levin could look like a visionary.

While the criticism should not be dismissed simply because it is aired by the competition, several media experts suggested, they recalled the way Forbes the candidate reacted in February when Fortune delivered its punch.

Fortune’s article said Forbes had many important or untouchable advertisers who could command changes in articles before they ran in the magazine. It accused Forbes, the on-leave publisher, of being a “boutique candidate” and of running for president to increase the ad pages in his magazine.

Forbes dismissed the Fortune piece as corporate jealousy.

* DEAL IN JEOPARDY?

U.S. may block or modify Turner-Time Warner merger. D5