Blue-Chip Partner for a Network

By Charles P. Alexander

Senator Jesse Helms was too straitlaced. Ted Turner was too brash and boisterous. But dapper Laurence Tisch was just the kind of dance partner CBS wanted. The entertainment company announced last week that it had invited Tisch, 62, the billionaire chairman of Loews, to join the CBS board of directors. In addition, Loews, a New York-based conglomerate that owns a hotel chain, sells insurance and manufactures Kent cigarettes and Bulova watches, will increase its stake in CBS from 11.7% of the network's stock to as much as 25%. CBS was emphatic that the deal with Tisch was entirely friendly. "A mutual love affair," said Senior Vice President William Lilley III. "We want this guy. We welcome this guy." The partnership makes Tisch a major player at CBS and may help the company fend off hostile takeover bids, at least temporarily.

The long-running battle for control of the network has featured all the drama and suspense of a potboiler mini-series. It began in January, when Helms' Fairness- in-Media group launched a proxy fight to be "Dan Rather's boss." Then Turner, the cable-TV king, stunned CBS in April with a $5 billion takeover bid.

While plotting the network's defense, CBS Chairman Thomas Wyman began looking for help and turned to Tisch, a shrewd investor with close ties to executives at both CBS and ABC. Recalls Tisch, whose Fifth Avenue office is around the corner from Black Rock, as CBS's Manhattan headquarters is called: "Tom came up to see me about some of his problems with Turner and Helms." A Loews takeover of CBS was not specifically discussed, but the two men reached a tacit understanding. Says Tisch: "CBS knew that if it needed somebody, Loews would be glad to discuss a deal." In July, Tisch started buying CBS stock.

By August, Helms had dropped his campaign against CBS, and the network had blunted Turner's bid by offering to buy 21% of its own stock for nearly $1 billion. Even so, Wall Street remained convinced that CBS was a takeover candidate. Still concerned, Wyman interrupted a vacation to call Tisch from a pay phone on a dock on Nantucket Island. After more calls and meetings over the past two months, Wyman suggested that Loews buy up to 25% of CBS, and last week Tisch agreed.

The match is a natural. Unlike Turner, a maverick outsider from Atlanta, Tisch is a pillar of the New York establishment. He is chairman of the New ! York University board of trustees, a leading supporter of the Metropolitan Museum of Art and a force behind the Federation of Jewish Philanthropies. His network ties include a longtime tennis partnership with Leonard Goldenson, the chairman of ABC.

More important, Tisch is a businessman of legendary stature. He and his brother Preston, who is president of Loews, started in 1946 by borrowing money from their parents to buy a single resort hotel, called Laurel-in-the-Pines, in Lakewood, N.J. By 1955 they had twelve hotels, and in 1960 they hit the big time by buying control of Loews Theaters. After a quarter-century of further growth and acquisitions, including takeovers of CNA Insurance and Lorillard Tobacco, the Tisches run a company with assets of more than $12.5 billion. The brothers have amassed personal fortunes that total an estimated $1.7 billion.

Wall Streeters are wondering if CBS will become the next jewel in the Tisch empire. Laurence Tisch told TIME, however, that he will lend his advice and expertise to the network rather than try to take charge. Says he: "I have no intention of running the board or CBS or interfering in any of their operations." He also maintains that he will buy no more than 25% of the company's stock.

CBS's agreement with Tisch probably makes it safe from a takeover bid like Turner's, which was to be financed largely with borrowed money. But the network could still be vulnerable to a cash-laden suitor. Though Tisch insists that his CBS investment is long term, he likes to sell as well as buy if the price is right. Less than four months ago, he sold the Loews chain of movie theaters, one of the original cornerstones of his company, for about $165 million.

With reporting by Barry Kalb/New York