Parent of Daily News Loses $42.5 Million During Year

Cooke Media Group Inc., parent of the Daily News newspaper, lost $42.5 million last year because of the company’s heavy debt load and a $6-million operating loss by the newspaper, according to a government filing.

The Daily News’ operating loss--the difference between revenue and day-to-day expenses of running the newspaper, excluding such items as interest and taxes--was wider than the $2-million operating loss in 1988. The newspaper’s revenue climbed 8% to $113.6 million from $105.1 million.

The Woodland Hills-based company, owned by financier Jack Kent Cooke, owns several cable-television systems in addition to the newspaper. Most of the cable properties were acquired in 1987 for $1 billion, with mostly borrowed funds.

Cooke is currently selling the cable systems piecemeal, and the company now treats them as discontinued operations. That means Cooke Media’s operating results include only the Daily News’ operations. However, interest costs on the cable systems’ debt and proceeds from sales of the cable properties are included in the results.

Although Cooke Media’s stock is privately held, part of its borrowings included bonds sold to the public, and the company therefore must disclose its financial results in filings with the Securities and Exchange Commission.

Cooke Media’s filing for 1989 showed that last year’s loss was substantially less than the $104.3 million it lost in 1988. That’s because last year Cooke Media had a $71-million gain from selling some of its cable properties.

Cooke Media has reported net losses totaling $226 million over the past three years, largely because of its debt burden. But its properties have generated sufficient cash flow to service the debt, and with the help of the cable sales, the company cut its total long-term debt last year to $809.2 million from $902.6 million.

Moreover, Cooke Media expects to sell all of its cable systems for about $1.6 billion, meaning that it likely could pay off the debt and still earn a profit of about $300 million on its investment in cable.