Television Marriage Made in Heaven? : Broadcasting: Pat Robertson’s buyout of MTM Entertainment made unlikely bedfellows. But the evangelist may have saved the company.

In January, when MTM Entertainment Inc.’s parent was sold, the tongues were wagging in the television business.

The kicker was the identity of the buyer: televangelist Pat Robertson and his International Family Entertainment Inc., the Virginia Beach, Va., owner of cable’s Family Channel. Robertson is IFE’s chairman, and his family controls 22% of the company’s stock.

The $86-million acquisition of Studio City-based MTM made for unlikely bedfellows. Robertson--who ran for President in 1988 on a conservative Republican platform--is now partners with Burt Reynolds, Harry Thomason and Linda Bloodworth-Thomason. Reynolds acts in and co-produces the sitcom “Evening Shade” with the Thomasons, MTM and CBS. The Thomasons are close friends of Bill Clinton and produced the inaugural celebration for the President.

Even William C. Allen, president of MTM Television--who survived a post-acquisition management shake-up--acknowledged some apprehension over the prospect of working for the TV preacher. “Everybody’s concern is, will Pat come out and rear his head someday?”

But less than three months after the buyout was completed, IFE’s plans for MTM are taking shape, and they are far from spiritual. Indeed, IFE is a highly profitable company. Its purchase of MTM was a calculated business move not unlike Turner Broadcasting System’s 1986 acquisition of the legendary MGM film library and its purchase last year of cartoon producer Hanna-Barbera Productions, which gave TBS a supply of programming to exploit in domestic and international television markets.

“IFE acquired a very attractive group of programming assets at a very reasonable price,” said analyst John S. Reidy at Smith Barney Harris Upham & Co.

Tim Robertson, 38, IFE’s chief executive and Pat Robertson’s son, said that having MTM in its fold gives IFE “the ability to walk into any situation in the world and have a guaranteed product flow.”

That’s a critical advantage as IFE prepares for global expansion. In September, IFE hopes to debut Family Channel U.K. in Britain, and if that’s successful it will launch similar ventures in other countries. IFE is also planning two new U.S. cable networks, one devoted to game shows, the other with a cowboy theme.

MTM might produce new shows for IFE and can also provide old shows from its library, such as “The Mary Tyler Moore Show,” “Lou Grant,” “Hill Street Blues” and “St. Elsewhere.” Meanwhile, MTM’s distribution network can help sell original Family Channel productions--like “The New Zorro”--to other media outlets.

In IFE, MTM now has a parent that’s on firm financial footing, and the Family Channel guarantees MTM a home for its programming. The cable network is one of the nation’s largest, currently reaching 94% of all cable households.

The strategy is not without risks. Though “Evening Shade” is a hit, it’s MTM’s only current network show. MTM also produces “The New WKRP in Cincinnati,” now in its second year of first-run syndication, and for next fall it is developing another first-run show, “Xuxu,” a spinoff of a popular Brazilian children’s series.

That’s a far cry from MTM’s glory days in the 1970s and ‘80s. Founded in 1970 by actress Mary Tyler Moore, her then-husband, producer Grant Tinker, and other TV veterans, at one time MTM had five network shows on the air and was a profitable company.

Then in 1988, British broadcaster TVS Entertainment acquired MTM for $320 million in a highly leveraged transaction that devastated TVS’ finances and hampered MTM’s ability to fund new production. The loss of TVS’ United Kingdom broadcast license in a 1991 auction was the final, crippling blow.

In 1992, TVS--whose primary remaining asset was MTM--lost $10.2 million on $170 million in revenue. Even after divesting its British studios and its 50% share in MTM’s Studio City television lot, TVS had little choice but to sell out.

But even with IFE’s financial strength, MTM faces an industry in which it’s tougher than ever to make money, and producing shows is a high-stakes gamble.

Some observers also question whether MTM’s library of past shows will prove as durable as, say, the classic MGM films. Other companies, including Turner Broadcasting, reportedly considered making an offer for MTM, but decided to pass.

As for MTM’s new product, “it can either have greater rewards or greater pain,” said Jeffrey Logsdon, analyst at Seidler Amdec Securities.

Nonetheless, Tim Robertson, who was the chief architect of the buyout, is obviously pleased with the acquisition. His father, while giving his blessing to the deal, focuses his efforts on producing the “700 Club” show for his Christian Broadcasting Network. CBN spun off the Family Channel to IFE in 1989 to ward off challenges to CBN’s nonprofit status.

Tim Robertson gets high marks so far for his management of IFE. The company went public a year ago at $15 a share, netting $46 million. It’s 1992 earnings soared 49%, to $29.6 million, while its revenue rose 16%, to $131.7 million, which it attributed to higher ad rates and subscriber fees and lower interest costs. The stock closed Monday at $15.

After taking control of MTM in January, Robertson did some housecleaning. Chief executive Bob Klosterman departed along with 15 others, leaving about 60 employees. Allen and newly named MTM distribution President Charles W. Larsen, formerly head of Republic Pictures Corp.’s distribution, now report directly to Tim Robertson.

In fact, Larsen said he has not even met Pat Robertson. Allen, the son of comedian Steve Allen, said he met Pat Robertson once when they crossed paths in a restaurant, and “there wasn’t even a discussion about MTM.”

Reynolds too has yet to meet Pat Robertson, but he said he has no problem with MTM’s new ownership. “It is a business,” he said. “And they certainly have the money to do the shows that are fun.” Quipped Harry Thomason: “We’re always glad to welcome other members of the cultural elite.”

Tim Robertson dismissed speculation that there might be philosophical differences between the two companies. IFE and MTM share the same goal, he said, and that’s producing quality TV shows. “We’re not trying to make a political statement here.”

For MTM, having the Family Channel as a backstop is crucial, Robertson said, because network fees no longer cover total production costs--a show like “Evening Shade,” for instance, easily runs deficits of $100,000 per episode. It has become harder to make up the difference in syndication because broadcasters like Fox and cable networks like USA are running more original programming. If a show bombs early on, there’s no hope of recouping the investment.

Worse yet for independent producers like MTM, the Federal Communications Commission voted last week to allow television networks access to the market for syndicated reruns. The decision potentially cuts into MTM’s share of syndication profits and could clear the way for mergers between networks and studios--which would compete with MTM.

So MTM is taking advantage of its new link to the Family Channel. The cable network has already agreed to run repeat episodes of CBS’ “Rescue 911,” which MTM distributes.

MTM is trying to cash in on its library, and recently licensed several of its old shows to the Nickelodeon cable channel. It has also begun selling videocassette compilations of old episodes in Wal-Mart stores.

But MTM isn’t giving up on the network game, and is hoping to win slots for a couple of new shows next season. One is an “Evening Shade” spinoff with Charles Durning, another a sitcom featuring comic Jeff Foxworthy. It’s also developing ideas for family dramas, action series and TV movies.

“I want to see the company build back and once again be an innovator, a risk taker,” Allen said. “People still talk about ‘Hill Street’ and ‘Mary Tyler Moore’ in reverent tones. I want them to speak again about our product in that way.”

While TVS has been criticized for its financial blunders, Allen admitted that MTM officials “may have made our own mistakes.”

It was a measure of just how far MTM’s star had fallen when in 1990 it debuted a new network series, “Capitol News.”

The show was made by former “Hill Street Blues” writers and producers and received some favorable reviews.

But it started around the same time as “Twin Peaks,” which garnered the media spotlight, and its third airing against a never-before-seen “I Love Lucy” episode buried it.

Of course, even if its marriage to IFE was made in heaven, MTM still faces such risks.

But, as Allen said, “someone had to acquire MTM.”

Now MTM can concentrate on producing shows without a crushing debt load, he said. IFE “fills so many of the needs we have. This makes sense.”

MTM Entertainment’s History * 1970: MTM is founded by actress Mary Tyler Moore, her then-husband, Grant Tinker, and Arthur L. Price. Over the years, the company had a string of successful television shows, including “The Mary Tyler Moore Show,” “Hill Street Blues” and “St. Elsewhere.”

* 1988: The company is sold for $320 million to British broadcaster TVS Entertainment PLC.

* 1990: Debt-burdened TVS tries to find an investor or buyer for MTM, but is unable to strike a deal at a price it finds acceptable.

* 1991: TVS loses its bid for renewal of its broadcasting license in the south of England, leaving MTM as its only major asset.

* 1992: MTM sells its 50% stake in the CBS/MTM Studios in Studio City to CBS.

* 1993: TVS is acquired for $86 million by International Family Entertainment Inc., which is headed by evangelist Pat Robertson. MTM’s current TV productions include “Evening Shade.”

International FamilyEntertainment’s History * 1960: Pat Robertson founds the Christian Broadcasting Network, a nonprofit organization that produces the evangelist’s “700 Club” television show.

* 1977: Robertson launches the Family Channel cable network.

* 1989: International Family Entertainment (IFE) is formed by Robertson and his son, Tim, to acquire the Family Channel from CBN, a move designed to ward off challenges to CBN’s nonprofit status.

* 1992: An initial public stock offering in April nets IFE $46 million. In September, the company offers $68.5 million to buy TVS.

* 1993: IFE completes the acquisition of TVS and its primary asset, MTM, at a final price of $86 million.