Rupert Murdoch's 21st Century Fox recently approached Time Warner about merging the companies in a deal valued at $80 billion, but the offer was rejected.
In a statement, 21st Century Fox said it made its offer last month to Time Warner -- parent of HBO, Warner Bros. and Turner Broadcasting -- but that Time Warner's board "declined to pursue our proposal" and "we are currently not in any discussions."
The assets of 21st Century Fox include Fox Broadcasting, the movie studio 20th Century Fox and cable channels Fox News and FX.
Time Warner's board of directors said the offer was "not in the best interests of Time Warner or its stockholders to accept the proposal or to pursue any discussions with 21st Century Fox."
Motivating 21st Century Fox's desire to acquire Time Warner is the rapid consolidation among the distributors that 21st Century Fox counts on to deliver its content.
Comcast Corp. is in the process of acquiring Time Warner Cable and AT&T is buying satellite broadcaster DirecTV.
As distributors merge, content providers such as 21st Century Fox and Time Warner fear they will lose leverage in negotiating fees for carriage of their channels.
Additional negotiating clout was not the only motivation for 21st Century Fox.
It has long wanted a strong
pay-TV channel such as Time Warner's HBO.
Also, Warner Bros. is the biggest movie and television studio, and combining it with 20th Century Fox's television and movie units would create a content juggernaut.
But such a merger would have faced intense regulatory scrutiny even though technically there are few Federal Communications Commission rules that could have derailed the deal.
To begin with, 21st Century Fox owns Fox News and Time Warner owns CNN. The idea of the nation's two biggest cable news outlets being under the same roof would have probably been a tough sell to Capitol Hill as well as to advertisers. A sale of CNN would likely have been required.
Also, the volume of content and networks that a combined 21st Century Fox and Time Warner would own and the power that would give them over the production community would have raised serious issues.
News of 21st Century Fox's offer was first reported by the New York Times.