Comsat Video Enterprises, division of the Communications Satellite Corp., which beams cable and satellite-tv programming to some 1,700 hotels, is laying 65 people, about one-third of its 200 employees.
The Washington, D.C., parent company is taking a pretax hit of between $90 million and $100 million (between $3.60 and $4 a share) in the fourth quarter ended Dec. 31,1990, mostly related to the CVE’s business of distributing pay-per-view films and events to hotel rooms.
The layoffs and losses come after Comsat invested some $180 million in CVE, which has not come close to turning a profit. The unit lost $18 million on revenues of $50 million in 1989.
Late that year, on behalf of CVE, Comsat took a majority position, via a total investment of $42 million, in a partnership that acquired the National Basketball Assn.’s Denver Nuggets.
It was not immediately known which staffers will be laid off. Since the arrival of 30-year broadcast vet Robert J. Wussler as prexy and CEO in summer ’89, CVE had added about 40 people.
Last month, CVE broke off negotiations with Seattle-based Sky Pix, which plans to deliver 80 channels to home satellite dishes, perhaps starting this summer. Supposedly, Comsat, via CVE, was talking about investing more than $100 million in the direct-broadcast satellite-venture.
Comsat lost more than $200 million in a failed attempt to intro a DBS system in the early 1980s.
In the fourth quarter last year, Comsat reported earnings of $17 million (39 ¢s; a share) on revenues of $100.4 million.
For the full 1989 year, Comsat generated earnings of $62.5 million ($3.35 a share) on revenues of $411.5 million.