New CEO at Live Entertainment Seeks to Get Firm Back in Focus : Movies: Roger Burlage is the third boss at Van Nuys videocassette distributor since former chief executive Jose Menendez and his wife, Kitty, were slain in 1989.

Two weeks ago Roger Burlage, was appointed the third CEO at Live Entertainment Inc. since chief executive Jose Menendez was slain in 1989 along with his wife, Kitty, in their Beverly Hills home. Menendez’s two sons are now standing trial for the slayings.

Burlage, 51, sitting in an office at Live’s Van Nuys headquarters that was redecorated by Kitty Menendez about a month before the slayings, said he isn’t haunted by the company’s past turmoil, indeed he joined Live for the opportunity to run a bigger company.

Since Menendez’s death, Live’s revolving management door has been just one of the videocassette distributor’s many problems, including an ill-timed expansion dating from the Menendez days into retail music and video stores. Live also suffered because its former majority owner and biggest supplier of films, Carolco Pictures Inc. (“Terminator 2,” “Basic Instinct”) virtually shut down production as it dealt with its own debt troubles.

Burlage, the former head of Trimark Holdings Inc., a smaller video and film distributor, now takes over Live as the company tries to return to health after emerging last spring from bankruptcy and turning over controlling interest to a group of foreign companies led by Pioneer LDCA of Japan.

Burlage hopes to make Live profitable again--although he concedes that might not happen this year because of the long lead time needed to acquire video rights to movies before the cassettes hit the marketplace. Live hasn’t turned an annual profit since 1990.

His plans also include expanding into acquiring the worldwide theatrical, television and video rights to movies, a strategy he employed with success at Trimark. “It’s building a company on a broader base, and controlling the whole asset, rather than a piece of the asset,” he said.

But Live’s future is far from certain.

In the nine months that ended Sept. 30, Live lost $5.55 million on $193 million in revenue, and its stock remains in the cellar, trading at less than $3 a share. Live hasn’t completed its refinancing, and a merger with Carolco--an idea that was proposed and then scuttled two years ago--is still hinted at by both companies.

The often-discussed possibility of selling Live’s retail operations--which includes the Strawberries and Waxie Maxie chains in the East--remains open. Its video distribution business also faces changes because of technology, including soon the home delivery of movies-on-demand over phone lines or by satellite.

Burlage believes the new ways to bring movies into homes will benefit Live. The company has for the past year included video-on-demand in its acquisitions of video rights. “I couldn’t care less what technology delivers the movie to the viewer, as long as I own the rights,” he said.

During his four years at Trimark, Burlage presided over a threefold growth in sales to $60 million, specializing in modest-budget, “B” movies. His move to Live was announced on Dec. 30, one day short of a deadline imposed by Live’s bank lenders, led by Chemical Bank and Credit Lyonnais, to find a new chief executive or risk defaulting on its credit agreement.

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Burlage replaced David Mount, who moved to record distributor WEA Corp. in September. Mount, previously president of Live’s home video subsidiary, had succeeded Wayne Patterson as chief executive in December, 1991. Patterson, former chairman of Pace Membership Warehouse, was hired in 1990 after a long search following the death of Menendez.

Live’s troubles started in late 1991, when its proposed merger with Carolco collapsed as the financial conditions of both companies deteriorated and their stock prices fell. In 1991 Live lost $107 million on $361 million in revenue, because of poor videocassette sales, a poor showing by its retail stores, and write-offs from its acquisition of a rival distributor, Vestron Inc.

In 1992, Live’s loss narrowed to $14.8 million, but its revenue fell 19%, to $291 million. Constrained by debt and a lack of capital, and in danger of defaulting on its bonds, Live filed a “prepackaged” bankruptcy petition in Los Angeles last February, emerging the following month when the court approved its plan to issue new notes and preferred stock to replace its old debt.

Carolco, which completed its own restructuring in October, once owned 53% of Live. But when all the bankruptcy negotiations were done, Carolco had turned over all its Live shares to its major investors, Pioneer, RCS Video International Services of Italy and France’s Le Studio Canal Plus. That group, which also controls Carolco, currently owns 64% of Live’s stock.

Live now has $23.5 million in bank credit available, which it is negotiating to increase to $75 million. Part of that money could be used to pay off $37 million in notes Live owes that carry a 12% interest rate and that mature in September.

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Sales of Carolco films on videocassette have accounted for about one-third of Live’s revenues in the past, so it’s good news that Carolco can now resume production, although those movies won’t bring any revenue to Live until 1995.

In the meantime, Live spent $48 million acquiring video rights from independent production companies in the nine months ended Sept. 30. Among its coming releases are Miramax films, including the critically acclaimed “The Piano,” starring Holly Hunter, and the coming “The House of the Spirits,” with Jeremy Irons, Meryl Streep and Glenn Close.

Live also last year entered a five-year, multipicture deal with Rank Film Distributors, MGM and Gladden Entertainment, whose previous films included “The Fabulous Baker Boys.” Burlage said Live has about 30 video releases for 1994, and he hopes to get that number up to 40, which is about average for the company.

Owners of Live stock and bonds are optimistic that the company is back on track. Norman Sapoznik, director of securities at the brokerage William J. Gallagher & Co. in Los Angeles, said he has purchased more Live stock recently. “I think they’re in good shape,” he said.

“They were capital-constrained,” said David Millison, director of research at the Beverly Hills brokerage Dabney/Resnick Inc. “The company now has access to capital.”

Millison said a big issue remaining is whether Live and Carolco will resurrect plans to merge. Pioneer has said it might ask the boards of both companies to reopen merger talks. Burlage said he couldn’t comment beyond that.

As he struggles to put Live’s problems behind, Burlage might have another decision to make. If any of the movies being planned about the Menendez slayings are released on videocassette, will Live acquire the rights?

Maybe, if it’s tasteful and can make the company money, Burlage said. But if there are too many TV movies about the Menendez case, “there probably won’t be that much value in other markets.”

Live Entertainment Inc. at a Glance

Live Entertainment Inc. is a Van Nuys-based videocassette distributor and retailer. After a failed 1991 merger attempt with its former majority owner, movie producer Carolco Pictures Inc., Live’s finances deteriorated and it filed for Chapter 11 bankruptcy protection last February. Live emerged from Bankruptcy the following month with a plan to restructure its complicated and debt-heavy balance sheet. Control of Live was transferred from Carolco, which also recently completed a restructuring, to foreign investors led by Pioneer LDCA of Japan, who together own 63.8% of Live. The company now has a new chief executive, Roger Burlage, who hopes to lead Live to a complete recovery.