ABC Network to Lose Money, Cap Cities Says

The ABC television network will lose money this year and probably next year as well as the year-old slowdown in national advertising maintains its grip on the industry, Capital Cities/ABC President Daniel Burke predicted Tuesday.

The network’s 1986 losses will be in the “double-digit millions,” he said.

ABC officials added, however, that the parent company, with its radio and television stations, newspapers and other operations, will turn a profit overall.

In a meeting between Cap Cities/ABC senior management and reporters, John B. Sias, president of the ABC network division, also forecast that advertising revenue for all three networks will edge up only 2% this year to about $8 billion. In 1987, they will grow between 1% and 4%, Sias predicted.

By contrast, Burke said local television advertising has grown rapidly, making profitability of ABC’s eight owned and operated stations “dynamite.”

Thomas S. Murphy, Cap Cities/ABC’s chairman and chief executive, said the company has all but finished the job of staff reduction that it took on last year when Capital Cities purchased the network. “We do not anticipate any significant need for further downsizing,” he said.

About 600 jobs have been cut at the company, either through terminations or the elimination of positions after employees’ departures. But now, Sias said, “it’s difficult to find any downsizing” to do.

The officials complained that the network’s costs have been driven ever higher by commitments to pay for sports, including major-league baseball and National Football League coverage. But they denied that they would cut network news budgets to help the company’s bottom line.

There are many contributing factors in the network’s unprofitability, “but news is not one of them,” Burke said. “It’s not a significant loss item in the cost equation.”

ABC’s news operation is, he added, “the cement that binds the network together.”