New Line to Join Ted Turner Empire Today : Film: With more money, the company is likely to add a few big movies to its annual production schedule.

Sometime this morning, New Line Cinema becomes something of a new company.

Known for distributing films ranging from the schlocky “Nightmare on Elm Street” series to Robert Altman’s critically acclaimed “The Player,” New Line is expected to formally be absorbed into Turner Broadcasting System when shareholders approve the deal at a special meeting in New York.

At that point, the company, whose motto has been “prudent aggression,” will find itself with deep pockets, a luxury enjoyed by few companies that must be prudent. Observers believe that’s likely to make the film distributor and producer a much more aggressive player in Hollywood in both making films and acquiring them for release to theaters.

As an example, New Line Chairman and founder Robert Shaye says linking with Turner will allow New Line to add to its production schedule two to four pictures a year in the $20-million-to-$35-million budget range, significantly up from its typical limit of about $15 million. That will give the company the flexibility to make broad-appeal pictures with major stars.

In addition, Turner’s deep pockets give the company increased access to feature film deals being shopped around. All told, Shaye expects New Line to produce or pick up roughly 25 movies a year, with another 10 being released through its Fine Line Features unit that specializes in art house films.

The New Line acquisition was one of two major deals that cable entrepreneur Turner made last summer in exchange for some $700 million in stock and cash, which will help him build what will, in effect, be another studio, sans lot and sound stages. The deal enhances the potential of Turner’s library of films and television programming, and it provides more films for his cable channels.

Turner already has a huge library of films, having acquired the old Metro-Goldwyn-Mayer library in the mid-1980s. With New Line, he gets a well-known distribution company.

He also last year agreed to acquire a top film and television producer in Castle Rock Entertainment, known for such hits as “A Few Good Men,” “In the Line of Fire” and the sitcom “Seinfeld.” Finally, Turner continues to build his Turner Pictures unit.

“It dawned on me that there probably is only one person who could create a virtual studio, who has all of this except for the real estate. And that is Ted,” said Shaye, whose New Line stock Thursday was worth nearly $120 million.

One open question, however, is how much interaction there will be among New Line, Castle Rock and other parts of the Turner film empire. Sources at this point suggest there may be very little.

Castle Rock executives are fiercely independent and have indicated they want to eventually build some kind of distribution system of their own after the 1997 expiration of its agreement with Columbia Pictures, which now distributes Castle Rock films.

One possible scenario is that Castle Rock and New Line will have their own marketing and distribution executives, perhaps sharing some parts of a common distribution apparatus in the Turner empire.

One notion Shaye and his chief lieutenant, New Line President Michael Lynne, are eager to dispel is that New Line had to make the deal to survive. Because they are frequently strapped for money, independents in Hollywood have a high mortality rate. Acquisitions are common as well, such as the purchase last year of New Line rival Miramax by Walt Disney Co.

Shaye says New Line could have made it on its own. According to the company’s prospectus, New Line’s revenue for 1993 was about $292 million, with a profit of $16 million; 1994 revenue is projected at $396 million on profit of $23 million.

“Our profit picture was the best it had ever been,” Shaye says.