Savoy Shifting Focus to TV Business : Entertainment: Box-office failures prompt action by struggling movie firm. It has no plans for layoffs.

Savoy Pictures Entertainment, which since releasing its first film two years ago has been plagued by a string of box-office duds, said Friday that it is retreating from the movie business and shifting more of its resources toward buying television stations and TV programming.

The publicly traded company, founded in 1992 with money from such high-powered players as the boutique investment firm Allen & Co. and Time Warner’s HBO unit, will seek partners to finance future films or merely produce movies for other major Hollywood studios. It will maintain a distribution arm, has no plans for layoffs and has no plans to cancel projects currently under way.

The announcement signaled a clear change in direction from its initial ambitious goal of building a studio to compete head-to-head with Hollywood’s majors.

“We had a series of unsuccessful films, and we don’t want to lose any more money,” said Robert Fried, president and chief executive of Savoy Pictures, the company’s film unit.

The problems of Savoy, founded by longtime Hollywood executives Victor Kaufman and Lewis Korman, show how difficult it is for non-major movie companies to compete with Hollywood’s major studios. Another independent, the Samuel Goldwyn Co., has struggled financially and is expected to be sold soon.

Fried said one factor in the decision to shift away from movies was that Savoy’s competitors are getting even bigger with the recent round of media mergers, making it harder to compete for talent.

He said the company is putting together a half-dozen movies with major stars that will cost from $40 million to $60 million--each requiring another $15 million to $20 million to market. He said the company now plans to spread its risk by taking on partners or setting those films up at other studios.

Ironically, Savoy caused an earthquake in Hollywood earlier this year when it agreed to pay Sylvester Stallone $20 million for a film project that had not even been selected.

Despite the box-office failures, Savoy has released a number of critically acclaimed films, such as “A Bronx Tale” and “Shadowlands.” But only a couple of its 12 films, notably “Circle of Friends,” were profitable and most, especially the 1994 bomb “Exit to Eden,” bled red ink.

Savoy clearly has been bloodied by the spate of films Hollywood has been releasing, a situation that has created what many executives believe is an overcrowded marketplace.