Blockbuster Entertainment Corp. has no intention of taking full control of Spelling Entertainment, the company said.
The giant video and music retailer made the announcement at Spelling’s annual meeting Tuesday in Beverly Hills.
Blockbuster’s president and vice chairman Steven Berrard said: “We’re happy to have the company remain public. We intend to make this a large company, using the equity” to make acquisitions.
Blockbuster owns 64% of the TV and film production company after buying 48.2% in March for an estimated $ 141.3 million. Its chairman, H. Wayne Huizenga, was also elected chairman of the board of Spelling. Berrard was made president and CEO. Blockbuster typically avoids buying companies with borrowed money, instead preferring to use its stock for capital. Berrard indicated that a refinancing of Spelling’s $ 110 million debt is in the offing.
Capitalizing on Blockbuster’s video clout — and to diminish risks from production — Spelling will begin producing shows for video release. This will allow Spelling to gauge reaction from consumers before spending more money. There will also be shows made specifically for the homevideo market. Plus, the company will increase its budget for acquisitions and production.
According to Spelling TV chairman Aaron Spelling, the production company had several high points in recent weeks. NBC has ordered “Winnetka Road,” starring Ed Begley Jr., as a midseason replacement, and Fox has ordered 32 episodes for the second season of “Melrose Place,” putting the series firmly on the syndication road. And CBS has asked for a revival pilot of “Burke’s Law,” the 1960s Spelling series, with Gene Barry to reprise his starring role.
Spelling is also underwriting a 10-film package called “Young & Reckless,” remaking teen-oriented flicks with directors like John Milius and Quentin Tarantino.
Blockbuster’s influence on Spelling and Hollywood is expected to continue. Berrard noted that Blockbuster will spend $ 1 billion on videocassette purchases in 1993, making it the largest single revenue generator for the industry.
According to Berrard, by using the company’s database, which details buying habits of several million customers, Spelling will be able to produce programming that benefits from Blockbuster’s test-marketing and research. “This information,” he said, “can reduce the risk on the front-end costs by understanding the back-end returns.”
Ron Lightstone, Spelling’s chief operating officer, pointed to the synergy of Blockbuster promoting the season finale of “Beverly Hills, 90210” in the vidchains’ stores. As a result, he said, “We had the highest rating in Fox history.”