Time Warner -- Turner Talks : PROFILE: UNDER THE GUN : Levin’s Bold Stroke Could Hand Him a Coup--or His Hat

Analysts are calling it the last stand for Time Warner Inc. Chairman Gerald Levin.

Under pressure to boost his debt-burdened conglomerate’s stock price, the embattled 56-year-old executive’s offer to purchase Turner Broadcasting System Inc. is seen as a bold stroke that could make Time Warner a more formidable entertainment giant and enable it to reclaim its title as the world’s largest entertainment company. Even a failed deal could enable Time Warner to cash out its Turner stake at a higher price--allowing Time Warner to reduce its debt.

But if the gambit doesn’t work, Levin’s job may well be in jeopardy.

In recent months, analysts have grown highly critical of Levin’s handling of Time Warner’s debt problems and management turmoil, even leading some observers to speculate that his days may be numbered at the media giant.

“When you think of visionaries in the entertainment business, Gerry Levin is not a name that usually makes the list,” said the chairman of a rival entertainment conglomerate. “This bid for Turner might sound like a shrewd move, but some people out there see it as nothing more than a last-ditch attempt to save his job.”

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Levin’s move to initiate talks with Turner is seen by many observers as proof that he has no intention of playing second fiddle to Walt Disney Co., whose proposal to acquire Capital Cities/ABC Inc. would vault it ahead of a Turner-less Time Warner as the world’s largest entertainment concern.

However, initial reaction Wednesday from Time Warner shareholders--a group often expressing unhappiness with Levin’s performance--was muted, with Time Warner stock falling as low as $40.25. It ended the day down 87.5 cents at $41.375.

Levin, a shrewd lawyer who started at Time Inc.’s Home Box Office in 1972, took over the top job three years ago after the death of highly regarded Steve Ross. He quickly gained control by reducing the size of the firm’s board and forcing out the bulk of Ross’ cronies and advisers.

Nearly six years after helping engineer the merger of Time Inc. and Warner Communications, Levin is still trying to find a way to transform Time Warner’s many cable TV systems into a profitable “full service” telecommunications operation.

Analysts predict that recent moves in Congress to deregulate the cable industry should lend credibility to Levin’s cable vision, allowing the company to boost rates and spur an estimated double-digit growth in cable revenues. Recent legislation will allow Time Warner to offer local telephone service.

While Levin’s management style is often described as more intellectual than creative, his supporters say he is a focused executive who sticks to his guns--despite criticism of his strategy.

During his tenure at the top, Levin has been criticized for concentrating too much on distribution at the expense of programming. But a deal with Turner could provide a quick fix in that area, bolstering the firm’s image as a global provider of top programming.

“It’s a bold move, a powerful statement to the entertainment community,” said Harold Vogel, entertainment analyst at Cohen & Co. “But there are still many serious unresolved issues lurking ahead for Time Warner.”

Last year, Time Warner raked in $16.5 billion in revenue, dominating the domestic market in music, publishing, film and television production. Although its individual businesses are profitable and reported record post-merger profit in the latest quarter, the company has racked up losses in the past five years because of the high cost of servicing its huge debt.

A restructuring of the music division authorized by Levin last year has forced the exit of six veteran executives.

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But stockholders aren’t the only ones complaining about the direction in which Levin has been taking the company.

Time Warner’s chairman has also come under attack in recent months by politicians who have accused him and other executives at the firm of selling violent and sexually explicit entertainment. He has also incurred the wrath of free-speech opponents, who have taken him to task for not defending creative freedom.

However, even if Turner rejects Levin’s bid, some say the executive could walk away from the talks a winner if his bid results in Turner’s shares being valued at a higher level.