CBS’ Dream Season Turns Into a Nightmare : Television: The network is reeling from financial reversals brought on by its heavy investment in sports programming.

CBS’ flirtation with a glorious comeback is over.

About all that the network could give thanks for this week was that it had nothing to do with Milli Vanilli.

Just days after a memorial service for CBS Chairman William Paley, who died Oct. 26 at 89, his company experienced a nightmare of a week that foreshadowed dark days and a struggle for survival for the company he built.

The signs were everywhere.

CBS’ brief prime-time honeymoon behind “Designing Women” and “Murphy Brown” hit a snag as leaders NBC and ABC began to assert themselves in the November ratings sweeps.

Suddenly, CBS was third again in the sweeps, which help determine ad rates for TV stations. And although it was still a surprising second in the overall season thus far, it was slipping significantly.

But if CBS Entertainment at least was admirable in trying to mount a program revival under its new boss, Jeff Sagansky, the network’s corporate side was suddenly reeling again from blow after blow under company President Laurence Tisch.

In a stunning string of reversals, partly from huge failures with sports investments such as the World Series, CBS suffered these black eyes:

* On the heels of a 30% dip in profits for the third quarter of this year, CBS said it will not only lose money in the fourth quarter--but that the network will probably finish in the red next year.

* CBS, which already has slashed its news staff, will lay off an additional 30 to 50 employees of the division. All three networks have been pressed financially by the Persian Gulf crisis and a media-wide advertising slump. But ratings-weak CBS is the most vulnerable.

* It now seems certain that CBS will lose nearly $100 million in the first year of its exclusive $1.08-billion contract for network rights to baseball. The contract is for four years. Bad luck hit CBS when Cincinnati swept Oakland in four games in the World Series, robbing the network of expected income in later contests.

The American League playoff was also a four-game sweep, costing CBS more income.

* To save $30 million, CBS said it will cut its compensation to its stations--the money it pays them to run its shows--by 20% next year. It’s not the first network to try such a maneuver, and it won’t be the last. But CBS isn’t really strong enough now to throw its weight around.

And with some affiliates angered by the move--since they already figured next year’s budgets with the compensation included--they may well be open to overtures from sellers of syndicated programs who offer them a better payoff.

What does this mean? It could mean disaster for CBS if angry affiliates decide to preempt the network’s shows and run syndicated programs instead. Fewer stations running a network show means fewer viewers, lower ratings and, as a result, decreased advertising revenue.

It could strike at the heart of CBS.

* After Paley’s death, it was reported that a major tax liability on his 8% share of CBS Inc. stock could cause his executors and family to sell it, thus making the network a possible takeover target again--despite the 24.9% stake owned by Tisch.

Once again, the Disney corporation is mentioned as a prospective buyer.

CBS previously was wracked by uncertainty and financial headaches after raising money to fight off a takeover attempt by cable magnate Ted Turner. The network never fully recovered from the struggle--and, as it turned out, might have been better off under the visionary Turner, who had the last laugh.

* In an embarrassing turn of affairs, CBS’ main hope against takeover notions may be that it now is so unattractive financially--with current losses, predicted losses, sliding ratings and the millstone of far too much money invested in sports programming.

* Reports persist that Tisch, who has shown little expertise at show business and has sold off key parts of CBS, including its profitable records division, may be looking for a way to sell the company, period.

It was not likely that anyone would try to sell CBS while Paley was alive, even though Tisch was the real power at the organization for the last few years as the largest stockholder.

In another cost-cutting move, CBS has decided to cancel the glitzy affiliates meeting it holds each spring at the Century Plaza Hotel--to which spouses and children also came--and replace it with a strictly business annual gathering of station executives in New York.

It probably makes good sense. CBS will save several million dollars. And NBC, and possibly ABC too, may be thinking of following suit.

But despite all the foolishness of these affairs--at which networks wine and dine their station owners and families in a star-studded, pep-rally kind of atmosphere heralding the new fall program lineup--the no-nonsense approach only illuminates the growing signs of worry at CBS.

What’s more, it is clear proof of the diminishing fun in a business that has grown and thrived on flair and showmanship and now is in the hands of corporations that simply don’t understand the entertainment world--where flamboyance is as important as bookkeepers.

CBS’ tough situation is regrettable because it did make a flamboyant move in shelling out $3.6-billion for sports--baseball, NFL football, NCAA tournament basketball and the 1992 and 1994 Winter Olympics--in a daring gesture to win viewers and prove the network is here to stay.

Unfortunately, the move has backfired thus far--not merely because CBS overpaid for the rights and put itself in a hole, as many believe, but also because of an amazing string of just plain bad breaks.

There were, of course, those blowouts in the baseball championships--with the result that CBS was only able to broadcast two-thirds of the potential 21 post-season playoff games.

But CBS has thrown snake-eyes in sports all year in what it called its “Dream Season.”

Here’s what happened:

San Francisco destroyed Denver in the Super Bowl, 55-10; hardly a spellbinding experience.

* The Detroit Pistons wrapped up the NBA title against Portland in only five games.

* The University of Nevada-Las Vegas blew away Duke for the college basketball title, 103-73, another yawner.

* And the All-Star baseball game was delayed by rain for more than hour, ending late at night.

For CBS, from the board room to the playing field, it’s been the year of living dangerously.