Capital Cities/ABC CEO Dan Burke, citing a sluggish economy, predicted his company’s 1992 net income would be flat and that there are few signs of an uptick in the network’s revenue picture anytime soon.
“There’s no promise that we’ve seen a turning point yet,” Burke said in a presentation at the Paine-Webber media conference.
Burke said he was heartened by season-to-season growth in the web’s ratings, but added “we need a better marketplace to translate those numbers into dollars.”
The CapCities topper repeatedly praised ABC Prods., the company’s in-house production unit, as a key to future growth. Burke projected the unit will generate $ 160 million in sales in 1993 from shows such as “Jake’s Place” and “Sirens,” two mid-season replacement hour dramas.
ABC productions will operate at a deficit, he added, of somewhere between 10 %-15%. The deficit will be lower than expected, said Burke, because of strong foreign sales. As ABC Prods. turns out more product, building a library, Burke promised the unit would be an important profit center.
Offering possible blueprints for the future, Burke said the company was in the position to handle a major acquisition in the $ 5-$ 8 billion range, calling it “something we desire devoutly.”
However, Burke later offered that CapCities for the near-term expected to “stay the course, balancing stock repurchases, new start-ups and minor acquisitions.”
Outlining the company’s stance in the battle over fin-syn and retransmission consent, Burke said ABC was well-positioned to operate effectively for the time being, but to fully capitalize on its assets the rules would eventually have to be struck down. Tribune Co.’s CFO Donald Grenesko also told the PaineWebber participants that he expects Tribune’s 1992 net from operations to be “about flat,” when compared with last year’s net income of $ 1.94 a share.
But he added that 1993’s profits will be above 1992’s, “reflecting gains in all our businesses.”
Grenesko also said that in the fourth quarter of 1992, Tribune, which owns the Chicago Cubs baseball team, will experience a gain of about $ 12 million, or 10 cents a share, from a major league baseball expansion fee.
John Madigan, president of Tribune Newspaper Co., said that while newspaper revenues are up in the first three quarters of 1992, “the fourth quarter is not off to a great start.”
He said that so far in 1992, newspaper ad revenues are up 1.9%, and that ad lineage is up 2.3%, due largely to an increase in pre-print advertising.
Looking ahead, Madigan says he sees “improved profits,” from newspaper operations in 1993 with both revenues and expenses seen rising about 4% to 5%.