Corporate raider Carl Icahn may be forming an alliance with media maverick Ted Turner to force Time Warner to do what Viacom has said it will do -- split in two, CNBC Wall Street correspondent David Faber reported Tuesday. Faber said that Icahn, who, according to rumor, is planning to boost his five-million-share stake in Time Warner, has also contacted hedge funds and other financial institutions to see whether they would be interested in joining the group. It was presumed that Time Warner's cable and print unit would become one of the spun-off groups, while the broadcast and big screen releases would be the domain of the second if Icahn et al are successful.

A ruling by a Delaware Chancery Court judge on Tuesday that the Walt Disney Co. did not violate its fiduciary duties when it handed Michael Ovitz a $140-million severance package was widely seen as a victory for outgoing Disney CEO Michael Eisner. ("Eisner Gets the Last Laugh," headlined Daily Variety.) However, the 175-page ruling by Chancellor William B. Chandler contained numerous barbs directed at Eisner. It referred to Eisner's "Machiavellian (and imperial) nature." Later Chandler wrote that "Eisner stacked his (and I intentionally write 'his' as opposed to 'the Company's') board of directors with friends and other acquaintances who, though not necessarily beholden to him in a legal sense, were certainly more willing to accede to his wishes and support him." He said that Eisner was able to act in a "unilateral manner" when he installed Ovitz as president and provided him "with one of the largest and richest employment contracts ever enjoyed by a non-CEO." Nevertheless, Chandler summed up, "Despite all of the legitimate criticisms that may be leveled at Eisner, especially at having enthroned himself as the omnipotent and infallible monarch of his personal Magic Kingdom, I nonetheless conclude ... that Eisner's actions were taken in good faith." Chandler's opinion also took the Disney board to task, saying it "fell significantly short of the best practices of ideal corporate governance." Gary Naftalis, Eisner's lawyer, said afterwards that his client "is very pleased that the court ... has found that he and the other directors properly carried out their fiduciary duties to the shareholders."

Disney's latest quarterly report looked much like a balloon animal created by a party entertainer. Parts of the company, like TV and theme parks, expanded significantly while other parts, like movies and DVD sales, deflated. All told, however, the company's profits rose 41 percent to $851 million, versus $604 million for the comparable quarter a year ago. Profits for ABC, its owned TV stations, and ESPN were up 48 percent from a year ago. ABC in particular was aided by the hit shows Desperate Housewives and Lost. However, the company's movie studio division saw a $34-million loss, primarily due to soft DVD sales. In a conference call with analysts, incoming Disney CEO Robert Iger urged the movie industry to rethink its policy of releasing movies on DVDs months after they are shown in theaters. He suggested that it might be wise to release them on both platforms simultaneously. "I think all the old rules should be called into question because rules of consumption have changed," Iger said.

Blockbuster appeared caught in an avalanche of fiscal problems Tuesday as it posted a quarterly loss of $57.2 million that amounted to twice what analysts had forecast. A year ago, it had posted a profit of $48.6 million. The company was also forced to admit that it would not be able to meet its 2005 financial forecast and that it had to negotiate an agreement with creditors to waive certain debt payments in order to avoid defaulting on the loans. Blockbuster also announced that it was raising the monthly subscription fee for its online service to $17.99 from $14.99. Analysts attributed Blockbuster's problems to its decision to eliminate late fees in an effort to compete more aggressively against Netflix, the leading online rental service, and to a slate of new releases that customers found unappealing. Blockbuster shares plunged on Wall Street Tuesday, dropping nearly 10 percent, then fell an additional 8 percent by mid-morning today (Wednesday).

The broadcast TV networks -- except for ABC -- saw their ratings decline still further last week, falling nearly 10 percent below their year-ago numbers. Thus far, ratings for summer 2005 are down 7 percent from summer 2004. The overall decline comes despite an 11-percent rise in ratings for ABC. CBS won the week with an average 4.9 rating and a 9 share. NBC was second with a 4.2/8. ABC placed third with a 3.8/7, followed by Fox with a 3.4/6.

The top ten shows of the week according to Nielsen Research: 1. CSI: Crime Scene Investigation, CBS, 9.5/16; 2. Without a Trace, CBS, 8.2/15; 3. CSI: Miami, CBS, 6.8/11; 4. NCIS, CBS, 6.5/12; 5. Two and a Half Men, CBS, 6.4/11; 6. Law and Order, NBC, 6.1/11; 6. Law and Order: Criminal Intent, NBC, 6.1/10; 8. Law and Order (Wednesday), NBC, 5.9/10; 9. CBS Sunday Movie: Deep Impact, CBS, 5.7/10; 9. (Tie) Cold Case, CBS, 5.7/10.

In his first television interview since provoking conservative commentator Robert D. Novak to walk out of a live broadcast of CNN's Inside Politics, liberal pundit James Carville maintained that he still likes Novak and accepts his apology. Appearing on The Situation Room, Carville remarked that the incident "is not a huge thing. He didn't really hurt anybody. This wasn't an offense against anything. It was probably a matter of bad judgment. And he says he's sorry, that he shouldn't have done it. And it's fine with me and I look forward to his return." Asked what he would say to Novak when he sees him again, Carville replied, "I'd say, 'Hey, Bob, how you doing?'"

Her numbers may seem puny compared with those of her principal rivals, but Rita Cosby's debut on MSNBC Monday night was the most-watched show on the struggling cable channel, averaging 665,000 viewers. In the 9:00 pm. hour, Hannity and Colmes led on the Fox News channel with 2,789,000 viewers, and Larry King on CNN drew 1,790,000. Cosby outscored Headline News's Prime News, which pulled in 367,000 viewers, and Mad Money on CNBC, which was watched by 345,000.

ABC is preempting much of its primetime programs tonight (Wednesday) to present a two-hour special devoted to the life and career of Peter Jennings, its longtime anchor who died Sunday at age 67. The network's announcement came even as reports indicated that ABC had prepared no "advance obituary" about Jennings, trusting that he would be able to return to the anchor's chair. Tonight's program, the network said, will include interviews with friends and colleagues, including Charles Gibson, Ted Koppel, Diane Sawyer, Elizabeth Vargas and Barbara Walters. The program, titled "Peter Jennings: Reporter," is being exec produced by Jennings' longtime partner, Tom Yellin, who is president of PJ Productions, the independent documentary production company that Jennings was allowed to set up in 2002 and which produced his Peter Jennings Reporting documentaries since then.

Russian officials have stepped up their denunciation of ABC for its decision to broadcast an interview with Chechen rebel Shamil Basayev on Nightline last week. Mikhail Kamynin, spokesman for the Russian Foreign Ministry, told the Moscow newspaper Izvestia that the broadcast "smacks not only of the promotion of international terrorist bosses and their criminal schemes, but also of direct and deliberate support of their deeds." The interview was conducted by Andrei Babitsky, an employee of the U.S.-backed Radio Liberty. Thus far, the Russians have not indicated whether they intend to interrogate Babitsky about how and where he obtained the interview. Meanwhile, NBC announced Tuesday that it, too, plans to air an interview with a controversial figure that was conducted not by one of its correspondents but -- in its case -- by a university psychologist. The network said that it will air an interview with the "BTK" killer, Dennis Rader, conducted by Harvard neuropsychologist Robert Mendoza, who was hired by Rader's defense attorneys. It is scheduled to air on Friday's edition of Dateline NBC.