CBS, Time, Columbia to Put More Cash in Tri-Star

CBS, Time Inc. and Columbia Pictures Industries have agreed to pump another $50 million into Tri-Star Pictures, a motion picture company that they formed in 1982.

The three partners had already invested a total of $50 million and were obligated to invest as much as $150 million more under the terms of their original agreement. As a result of recent negotiations, however, Tri-Star said it will relieve the partners of any further obligation.

The disclosures were made Thursday in a registration filing with the Securities and Exchange Commission, where Tri-Star proposed a public offering of about 12% of its stock and a $25-million offering of 15-year notes to be sold separately. Tri-Star said it anticipated pricing its offering at $8 to $10 each for 2.5 million units, consisting of one share of common stock and one warrant to purchase a share of common stock. The warrants would expire in 1992.

Tri-Star planned to offer a quarter of its shares to the public last winter at a price ranging from $15 to $18 each but withdrew the offering Dec. 5, blaming adverse market conditions. At the time, sources in the financial community complained that the stock appeared to be overpriced for a company that had released its first film just eight months earlier.

Leslie Jacobson, general counsel for New York-based Tri-Star, declined Thursday to discuss the valuation.

In the registration statement, Tri-Star disclosed that it has extended a pay-television licensing agreement with Home Box Office, a Time subsidiary, for three years beyond its original 1986 termination. For films that begin production during the last three years of the agreement, Tri-Star will make the pay-TV rights available on a non-exclusive basis, instead of the current terms of exclusivity.

Tri-Star said it also has agreed to make 30 films available to CBS for commercial broadcast, instead of 15 as originally agreed.

The fledgling movie company said it also has altered the terms of its agreement with Columbia Pictures, a Coca-Cola subsidiary, for distribution of Tri-Star movies. Under the new agreement, Columbia will reduce its fees if the aggregate of Tri-Star’s films generate a certain amount of revenue in a given year. The fee schedule was not disclosed.

Tri-Star said it also has agreed to license the television syndication rights of its first 37 motion pictures to a unit of Columbia, and it also has agreed to give Columbia the foreign pay-TV rights to those films in markets outside the United States and Canada.