Co. to release fewer pics next year
HOLLYWOOD — Barry Diller’s USA Networks posted deeper third-quarter red ink on Wednesday — albeit less than expected — as aftershocks of the Sept. 11 terrorist attacks hit its cable webs and other operations.
The New York-based media group posted a $40.4 million loss from continuing operations in the latest quarter, compared with $5.9 million in red ink in the same period last year. The year-earlier figure excluded a one-time gain from the sale of some broadcasting stations.
In a new policy, USA made no projections about the company’s anticipated earnings in future quarters. Alternately, the company will provide internal budgets in various business segments.
“A lot of companies are saying that given these unpredictable times they … are going to give no information about the future,” Diller said in a conference call.
But USA execs made it clear they expect ad sales to continue to slump in the fourth quarter. Several other broadcast and cable webs also have cited a further slackening in advertising, as the impact of recent news events accelerates the U.S. economic slowdown.
Fewer pix planned
Diller said USA Films will release fewer pics next year. The unit had cash flow of about $400,000 in the latest quarter, compared with negative cash flow of $5.8 million a year earlier.
“We are better off putting more resources into fewer films,” Diller said.
Meanwhile, the USA topper said he has no regrets about not pursuing Spanish-language broadcaster Telemundo or basic-cable web Fox Family Channel, which were recently snapped up by General Electric and Disney, respectively. Both deals carried “a high price,” Diller said.
“But our lack of interest in them was not overly price-sensitive,” he added. “They just weren’t strategic for us.”
On the other hand, USA’s acquisition of the Expedia travel Netco will still pay off, despite the current slowdown in U.S. travel following the terrorist attacks, Diller maintained.
“Travel will grow (again),” he said. “It’s a great interactive category.”
Slightly narrower loss
Excluding one-time charges and non-operating gains in the latest quarter, USA saw a $29.6 million loss. That reps a slight narrowing from a year-earlier loss of $30.5 million on a pro forma basis, presented as if the acquisitions of e-commerce businesses Precision Response and Styleclick had occurred at the beginning of 2000.
USA’s revenue rose 13% to $1.26 billion in the latest quarter.
At its signature USA cable web, sales rose 7% to $214 million, while the Sci-Fi network marked a 2% slide to $63.1 million. Historic cash cow Home Shopping Network saw an 8% sales rise to $396.4 million.
On Tuesday, USA subsidiary Ticketmaster reported a third-quarter loss of $49.4 million, narrowed from $51.2 million a year earlier. The ticketing-services giant said revenue rose 7% to $157.5 million
USA shares were down 74¢, or 4%, at $18.72 in midday trading. Ticketmaster shares were off 29¢ at $13.31.
(Bloomberg News contributed to this report.)