NEW YORK — Court TV founder and chairman Steven Brill is quitting the cable network and its sibling publisher, American Lawyer Media, after unsuccessfully attempting a buyout of the two businesses from Time Warner, Brill and Time Warner said Wednesday.

Time Warner vice chairman Ted Turner is understood to have vetoed Brill’s attempt at a buyout, apparently anxious to retain some control of the cable network, which at times has drawn viewers away from CNN. Time Warner owns one-third of Court TV and a majority of American Lawyer.

But the entertainment giant has decided to sell American Lawyer Media, which publishes American Lawyer magazine and nine regional legal newspapers and operates the Counsel Connect online service for lawyers. Brill, who had no equity in Court TV, sold his 20% stake in the publisher back to TW on Friday, giving it a total of 90% to sell.

Brill’s departure exposes long-simmering tensions among the three Court TV partners — Time Warner, Liberty Media and NBC — over the future direction of the cable network. As three equal partners, the trio have frequently found themselves in a deadlock over proposals for future businesses, sources say. Time Warner and Brill both declined comment.

Brill told Court TV and American Lawyer staff in a memo Wednesday that the partnership structure “doesn’t work well. We have managed well day to day, but I believed that continued progress would best be achieved under a different structure.”

He wanted to use the publishing business’s group of newspapers to “build a string of locally-based daytime feeds in metropolitan areas that when combined with our national brand name, would turn Court TV into a powerhouse cable channel,” he said in the memo, which was obtained by Daily Variety.

Early last year Brill arranged the backing for a buyout of both Court TV and American Lawyer Media, to be followed by a merger of the two. Brill said in the memo that “just as we were putting pen to paper, Time Warner announced its intention to buy Turner and decided to put this deal on hold.

“This fall I thought I had gotten the deal going again but that was not to be,” he added in the memo. While Time Warner chairman Gerald Levin, NBC and Liberty were willing to sell, Turner said no, sources say. People close to Time Warner confirmed that Turner considered Court TV to be valuable and that Levin “ultimately didn’t want to sell,” either. NBC and Liberty execs did not return calls.

‘Sterling assets’

In a statement, Levin said “we are happy with our ownership in Court TV, which we consider to be an important part of our sterling basic-cable channel assets and look forward to its continued growth as part of our networks group.” He added that the decision to sell the publishing business was “consistent with our corporate strategy of selling non-core assets to reduce debt.”

“I really regret that they ultimately didn’t decide to sell to me and I would still love to do it if they changed their mind,” Brill said, adding he has a “variety of options” to consider for his future.

Time Warner is likely giving up $150 million by holding onto its interest in Court TV. Investment bankers say the cable network, which has about 30 million subscribers, is probably worth about $450 million. It has just turned profitable, earning $3.5 million in cash flow last year according to Paul Kagan Associates, compared with a loss of $1 million in 1995, and Kagan predicts it will earn $12 million in cash flow this year.

All or nothing

The publishing business is likely to be worth at least another $100 million. Brill noted in his staff memo that the newspapers “are all solidly profitable … a new buyer will pay substantially for these publications.” He added that he didn’t want to buy the publishing business without the cable network attached.

Time Warner’s unwillingness to unload Court TV is in contrast with its decision to sell its 58% stake in E! Entertainment Television to a partnership of Comcast Corp. and Walt Disney Co. for $320 million. People close to Time Warner said that the sale of E! raised more money than could have been raised from selling Court TV, and that Time Warner can “maximize the value” of Court TV under Turner.

Industry sources noted that Court TV’s practice of not breaking away from important testimony for advertising breaks had both cost the network advertising revenue and drawn viewers away from CNN. Time Warner said Thayer Bigelow, CEO of Time Warner Cable Programming, will assume the role of Court TV CEO reporting to Turner once Brill leaves later this year.

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