CBS Reports 4th-Quarter Loss, Bad Forecast for ’91

CBS Inc., once called the “Tiffany network,” painted a grim profit picture today, saying it will report a loss in the fourth quarter and lower earnings next year.

The New York-based company said surprisingly steep losses arising from the short baseball playoffs and World Series games hurt results, while a tough advertising climate pressured the bottom line.

CBS agreed to pay $1.1 billion in 1988 to televise four years of Major League baseball, resulting in $275 million in costs for the right to air the games this season alone.

When the Cincinnati Reds swept the Oakland Athletics in four straight games to win the World Series, the network could not recoup its licensing expenses.

The network also said it expects earnings to decline next year because it will not be covering two premier sporting events that it broadcast this past year: the NFL Super Bowl and NBA playoffs and championships.

“As a result the CBS Television Network is currently expected to show an operating loss in 1991,” the company said in a statement.

The CBS network is the hub of the company’s vast broadcast operations, which include local television and radio stations and the radio network.

The losses come at a particularly hard time for CBS, for its standing in the television ratings has inched up in the past few weeks from its third-ranked spot.

Costs for entertainment programming and sporting events have also risen as the economy has slowed, sapping advertising revenues during its prime-time programs and sports events.

“These are not just short-term problems,” CBS chief executive Laurence Tisch said in a statement.

“It is now apparent that increased competition for both viewers and advertising dollars, combined with rapidly escalating programming costs, is changing the fundamental economics of network television.”

The quarterly loss will be its first since the fourth quarter of 1986, when the company recorded a $20-million operating earnings shortfall.

The company’s shares lost $2 to $161.75 in midday trading on the New York Stock Exchange.