New World Expects Losses, Puts Marvel Unit on Block

In a surprise move, cash-strapped New World Entertainment on Thursday said it had put its Marvel Entertainment Group--publisher of Marvel comic books--up for sale. The company also said it was expecting a pretax loss of $25 million during the second quarter.

In a news release, Los Angeles-based New World attributed its anticipated second-quarter loss to the poor showing of recently released films, including “18 Again,” “Dead Heat” and “Wrong Guys.” The firm also blamed continued high overhead costs, debt payments and lower-than-expected video results.

The company also predicted a loss for the third quarter, the size which it said would depend on the performance of film releases during that quarter, its ability to reduce overhead, debt and television production costs. The length of the Hollywood writers strike might also affect the finances.

New World said it intends to ask for bids for all or a portion of its Marvel Entertainment subsidiary, which publishes Marvel comic books.

The subsidiary was a key portion of an aggressive strategy to transform the company from a distributor of low-budget exploitation movies into a billion-dollar giant with interests in movie and television production, home videos and toys.

Recently, however, high costs and poorly performing movies and television shows have soured the firm’s once-bright financial outlook. In March, the once cash-rich company reported an $18.5-million loss for 1987 and said it might sell assets if were not able to improve its cash flow or borrow more money.

Founded in 1970, New World was purchased by entertainment lawyers Harry Evans Sloan and Lawrence L. Kuppin five years ago. At the time, the company was sole remaining distributor of low-budget exploitation films.

Under Sloan and Kuppin, New World expanded into television production, producing such programs as “Crime Story” and “Wonder Years.” Although “Crime Story,” an expensive production, has been canceled, “Wonder Years” has been renewed.

The company also purchased the publisher of Marvel comic books, whose characters were slated to appear in television cartoon shows that have not materialized.

New World also sought to take over Kenner Parker Toys last fall. The firm bid as much as $508 million for the takeover before bowing out to a higher bidder.