The death yesterday of Steven J. Ross not only ends one of the more legendary careers in show business, it also throws an element of uncertainty into the future of Time Warner Inc. Although Ross’ death was anticipated, it has still left a huge gap between New York-based Time and L.A.-based Warner exex, fueling speculation that tensions could escalate as the two factions vie for control of the company.

The first change in the post-Ross era came within hours of his death, when the company announced plans to cut its board to a dozen members from the current 21 and reduce the proportion of company insiders. That move is seen as decreasing the influence of the Warner side and strengthening the Time side. Warner controlled 12 positions on the board.

Gerald M. Levin, who became the sole chief executive on Ross’ death, said the plans resulted from a lengthy review process that was completed on Saturday.

While the company said its bylaws specifically provided for Levin to take the sole chief executive’s job, no provision has been made for replacing Ross as chairman. That will be left to the board to decide.

In a statement, Levin said he, Ross and the non-employee directors decided in September to have a committee review the makeup of the board “because it was our shared view that the Time Warner board was too large and contained too many insiders.” Spokesman Edward Adler said Ross supported the final decision.

Ever since the two media giants merged in 1989, there has been tension between the staid Time faction and the more free-wheeling Warner contingent. Ross was largely perceived as the glue that held the two sides together. His death raises further doubts about the future of a turbulent union, even though he’s been replaced by Levin, his hand-picked successor. Levin has been sole head of Time Warner since Ross went out on medical leave in February.

The question is whether Levin’s tact and intellect can match Ross’ charm to balance the Time and Warner factions. Analysts hesitate to predict Levin’s ability to follow in Ross’ footsteps, but figure his background–he came up through the Time Inc. ranks via its HBO cable division–make him the most likely candidate to keep Time and Warner exex on amiable terms.

New York-based media analyst Lisbeth R. Barron of S.G. Warburg agreed that “questions about the publishing (Time) side still stand,” given Levin’s TV heritage. However, she believes that Levin, “working with the Warner Bros. people and the Time side, has done a fairly good job so far.”

“Levin’s got some of the qualities that Ross had in terms of vision and protecting the talent and standing behind them, and as far as we can see, has been someone who has been fairly early on trusted by both sides of the combined company,” Barron said.

Barron expects that “day-to-day operations should continue smoothly,” even though “no one expects (Levin) to have the same sort of financial genius, or the same sort of capability to make the people around him feel secure … But the division heads are strong.”

Warner Bros. chairman/CEO Robert A. Daly is considered one of Time Warner’s strongest division heads–securely in charge of all film and TV operations in L.A.

Asked if he would consider a senior corporate position with Time Warner, Daly said: “I’ve always been pretty clear about my desire to live in California. I have a great partnership with Terry Semel (Time Warner Entertainment’s prez and chief operating officer) and I’d like to continue that.”

As for the future of Time Warner’s relatively stable but generally depressed stocks (it closed Friday at 28 7/8), Barron thinks Ross secured deals that will save the company money in ’93.

“In January the company has the ability to exchange its preferred stocks for debentures, which can give them a small amount of profit in the third quarter,” Barron noted, adding that such a move “can save $ 300 million a year in taxes.”

Whether Levin will match Ross’ financial savvy and master the boardroom politics remains to be seen.

“If there is a (power) struggle going on, it may have started because of question marks about Levin’s longevity and/or the future of the publishing division. With Ross’s death, both Levin and the publishing operation may have more security.”

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