Tuesday, May 20, 2008

CNN's Historic Apartheid Regime & Citibank Connections

(The following article first appeared in the February 2, 1994 issue of the now-defunct alternative newsweekly, Downtown, when CNN was still controlled by Ted Turner)

As security for the initial increase in TBS/CNN corporate debt that resulted from his broadcasting system establishing CNN in 1979, Ted Turner utilized some of his one-ounce, solid gold South African Krugerrand coins. During the years when the apartheid regime ruled South Africa, Turner—despite anti-apartheid movement calls for people not to purchase Krugerrand coins—apparently “bought $2 million worth” of Krugerrand coins “at $275 an ounce,” which rapidly increased in value, since “within a year” after Turner’s Krugerrand purchase “gold had hit $800 an ounce,” according to CNN: The Inside Story. From his investment in the apartheid regime’s Krugerrand coins, Turner “made over $3.6 million profit,” according to It Ain’t As Easy As It Looks.

Turner’s CNN operation wasn’t as profitable at first as his Super Station’s broadcasting of wrestling matches, baseball games and basketball contests to pay-TV cable viewers had been. As Contemporary American Business Leaders observed:

“The first three years were terrible for CNN. It lost oceans of money.”

Yet despite losing $24 million between 1979 and 1982 as a result of his CNN operation, Turner—like Australian global media mogul Rupert Murdoch—was able to convince a few Manhattan-based banks to rescue him financially in the early 1980s. During the early years of the Reagan Era, Turner’s TBS (its name had been changed from TCC in 1979 to TBS) was given a $50 million loan for three years from Citibank and Manufacturers Hanover Trust to enable him to keep his money-losing “alternative” CNN operation going when it was still losing $2 million a month. Turner’s TBS/CNN was also lent $190 million from a Chemical Bank-led consortium and $50 million from First Boston during this same period. Not surprisingly, CNN did not provide its pay-TV viewers with much in the way of hard-hitting investigative reporting about Citicorp between 1980 and 1994.

(Downtown 2/2/94)

Next: CNN’s Historic Jerry Falwell & Jesse Helms Connections