Company Town : Screen Bombs, Goodwill Games Slam TBS Profit
Turner Broadcasting System, weighed down by money-losing movies and the costly 1994 Goodwill Games, said Thursday that second-quarter profit plunged about 60% from last year’s levels to $13 million.
Despite higher advertising revenue from cable and broadcast operations, the Atlanta-based company was hobbled by the poor box office showings of “City Slickers II” and “Little Big League.”
The three months ended June 30 were also marred by a $26-million loss related to the sponsorship and broadcast of the 1994 Goodwill Games, which were plagued with low viewership. Turner’s total loss on the games in St. Petersburg, Russia, were $39 million when previous expenses are included.
“With continuing network expansion domestically and internationally, as well as the combined effects of telecasting the Winter Olympics and the Goodwill Games in the same year, we knew 1994 would be financially challenging,” TBS President and Chairman Ted Turner said in a statement.
The second-quarter results would have been worse except for a one-time, pretax gain of $22 million related to the sale of Turner’s 37% stake in RHI Entertainment for about $108 million cash.
On Thursday, Turner Class A shares slipped 25 cents to $18.25 on the American Stock Exchange.
Turner said the third quarter looks promising, since movies such as “Mask” are performing well.