King World to Take New Firm Public

The company that distributes the hit television game shows “Wheel of Fortune” and “Jeopardy” wants to sell the public a stake in its future syndicated programs.

King World Productions Inc., the New York-based program syndicator that also distributes “The Oprah Winfrey Show,” said Monday that it will make a public offering in a newly created company called Merlin Capital Corp. to share the risks and possible profits of new King World shows.

The initial public offering could raise as much as $36 million, which would be used to develop and produce new syndicated programs. King World will contribute 50 cents of every dollar to produce these programs, so the total funding available would be $72 million.

The announcement comes at a time when momentum appears to have slowed at the high-flying syndication company. During the mid- to late 1980s, King World’s revenue, profit and stock price soared when it came out with the successive hits “Wheel of Fortune,” “Jeopardy” and “The Oprah Winfrey Show,” which continue at the top of the ratings charts.

But in the past couple of years, the company has not had a blockbuster on the order of its previous successes. Its newest programs, such as “Inside Edition” and “Only Yesterday,” both “reality-based” magazine shows, have not been scheduled in the best time slots on local television stations. And the company has suffered repeated setbacks in a two-year effort to launch a game show based on the “Monopoly” board game.

The public offering announced Monday consists of 2.25 million units at $16 per unit, each of which contains one share of common stock and one warrant to buy a share of common stock at a still undetermined price. King World said that after the offering it would own 1.5 million shares of Merlin preferred stock, convertible into about 40% of the common shares.

Current King World hits will continue to be produced under the company’s banner. But new programs such as the upcoming “Only Yesterday” and a potential revival of “Candid Camera” will be funded through Merlin.

King World to date has had a tough time expanding beyond its core business of selling game and talk shows to local television stations. Although regarded as one of the best syndication companies in the business, a joint venture with MCA announced 18 months ago to produce programming has yet to yield any results, and another joint venture with a group of TV stations to produce programs has yet to launch a successful show.