The Los Angeles Times from Los Angeles, California • Page 38

4 TUESDAY, JANUARY 4, 1994 Company Town jj LOS ANGELES TIMES f.ii THE BIZ ALAN CITRON and JAMES BATES Focus on Entertainment Stocks Eyes on Viacom as Paramount War Revives 'm Spotlight on Walt Disney Following reports that Euro Disney 'VlaH nnatori a nat naa rt tQftt milllnn In ha flatnl voflr 0nHmi fiant TWUbVU lllV wag VI UUU IIN11IU1I An UIV du, nairman jvucnaei Eisner acicnowieagea inai me European theme park's performance has been "dreadful" and said the huge "loss was the "first real financial disamointment" of his nearly riAAn vmlrtrl if Witt ai loVt tirsti lift until at least late spring. a 1 rii Major Properties 40J'B Mnvlaa; "Tho NirVitmart Refnre JnChristmas," "Tombstone" ,01 J. Television: KCAL-TV, Los Angeles; "Home Improvement Theme Parks: Disneyland, Walt Disney World, Euro Disney, Tokyo Disneyland Industry Performance Stock prices for key entertainment companies for Jan. 3, in dollars and cents: 52-wk. 62-wk.

Volume Mon. Dally chg. high low Ticker Mkt Company ft i n't 1 1 it- 1 4tt I Jurr IK'- ni fi The battle continues for Paramount's Monday, closing at $78.25. Viacom Class A shares eased 12.5 cents to $48.75, and Viacom Class lost 87.5 cents to $44. QVC added 25 cents to $39.50.

Top Blockbuster executives were scheduled late Monday to check into New York's Peninsula Hotel for what are expected to, be intense strategy sessions with Viacom over the next couple of days. The hotel has become the company's residence of choice. in the Big Apple, and for good reason. Back in September, executives were unexpectedly kicked out of the SL Regis Hotel because the hotel was booked and they hadn't made arrangements to stay another night. The St.

Regis ended up sending them over to the Peninsula. If Viacom does forgo making a higher bid, Redstone will have a few brash statements to answer for. One in particular is his Nostradamus-like declaration that it would take a "nuclear attack" to prevent Viacom from acquiring Paramount. Then there was another Redstone declaration of confidence in September in which he said, "Short of a bullet going through me, this merger's going to take place." Paramount is also the focus of an article in February's Vanity Fair magazine, in which contributing editor Bryan Burrough reports that the company nearly merged with NBC before the current battle. Burrough quotes Paramount Chairman Martin Davis as saying he came razor- EXECUTIVE SUITE I i mmm 1.75 0.50 CRC Carolco Pictures 154 0.63 0.06 NA 7.50 3.50 DCPI 0 Dick Clark Prod.

NA 6.50 None 62.5 15.0 47.88 36.00 OIS Walt Disney Co. 1,376 43.13 0.50 0.3 23.0 15.00 6.75 SQ A Samuel Goldwyn 1 11.13 'None 11.3 NA 43.75 31.75 KWP KlngWortd 168 37.63 11.9 14.0 141.50 87.00 MC Matsushita NA 134.75 44.9 78.0 26.00 11.50 NLN A New Une Cinema 69 25.75 85.6 36.0 63.25 36.00 NWS News Corp. 446 52.00 27.6 16.0 9.50 2.00 0RPC 0 Orion Pictures 56 6.75 184.2 NA 83.50 42.13 PCI Paramount 778 78.25 0.50 73.9 40.0 40.13 23.25 PLG Polygram 122 39.38 None 62.4 23.0 14.50 6.75 RPICA 0 Republic Pictures NA 12.75 0.13 70.0 NA 22.00 14.75 SPEI 0 Savoy Pictures 62 20.38 20.7 NA 50.63 32.00 SNE Sony Corp. 39 50.00 0.13 46.5 68.0 10.38 4.75 SP Spelling Ent. 35 9.75 56.0 31.0 46.88 28.75 TWX Time Warner -913 44.13 50.9 NA 82.75 59.13 BHC A BHCComm.

4 80.50 34.2 12.0 643.75 476.00 CCB Cap CitiesABC 25 609.00 19.9 23.0 326.50 186.13 CBS CBS 37 283.00 50.5 14.0 43.38 30.25 CCN Chris-Craft 68 36.88 0.25 16.6 9.0 107.00 80.88 GE General Electric 1,285 104.00. 21.6 18.0 39.50 30.25 MMEDC 0 Multimedia Inc. 177 34.38 0.13 5.8 16.0 22.50 12.00 SBTVF 0 Scandinavian NA 21.00 None 36.6 NA 61.25 48.00 TRB Tribune Co. 155 60.13 None- 25.3 26.0 1 20.13 13.63 BTV BET Holdings 5 19.50 43.1 30.0 42.25 17.50 CMCSA 0 Comcast Corp. 489 34.50 78.1 NA 15.00 8.75 FAL A Falcon 24 13.75 42.9 NA 29.00 18.00 GET Gaylord 20 28.00 36.6 79.0 15.38 4.13 HSN Home Shopping 185 14.63 77.3 NA 25.13 13.63 FAM Int'l Family Ent.

65 19.25 37.5 27.0 32.00 12.50 LBTYA 0 Liberty Media 439 28.00 121.8 NA 11.00 6.63 PLAA Playboy Ent. 7 11.00 None 49.2 NA 73.00 37.00 QVCN 0 QVC Network 664 39.50 0.25 1.6 27.0 30.13 18.50 TCAT 0 TC A Cable 147 27.63 28.5 37.0 33.25 17.50 TC0MA 0 Tele-Comm. 2,176 29.50 38.8 NA 29.75 19.38 TBSA A Turner 4 27.50 0.25 28.7 125.0 67.50 37.13 VIA A Viacom 16 48.75 10.8 38.0 14.88 5.75 AEN A AMC 3 13.38 18.0 34.25 15.75 BV Blockbuster 634 31.00 0.38 65.3 32.0 20.75 12.88 CKE Carmlke Cinema 3 17.75 24.6 12.0 3.75 1.13 CPX ClneplexOdeon 23 2.75 None 57.1 NA 41.50 28.13 Harcourt General 135 35.75 8.7 17.0 3.00 1.63 LVE Live Ent. 14 2.38 None 26.7 NA Key: NYSE; A AMEX; 0 NASDAQ Sources: Associated Pros, Watt Disney Btoomberg Business News 7 JAYNE KAM1N-0NCEA Los Armeies Times assets, including its movie studio, above. close to acquiring 51 of NBC in 1992, in a deal quietly negotiated with General Electric Chairman Jack Welch.

The agreement reportedly fell apart because of regulatory blockades. "This was real. We had a deal. It blew apart at the 11th hour," Davis said in the article. Davis also told Burrough that Tele-Communications Inc.

Chief Executive John Malone leaked details of QVC's planned bid to him as part of his independent effort to strike a deal with Paramount. According to the article, Malone at one time hoped to pair Paramount with TCI, the TCI-owned Liberty Media or Turner Broadcasting, which is also partly owned by TCI. While Burrough reports that Paramount courted, or was courted by, such companies as Thorn EMI, Bertelsmann, Sony, CBS, ABC, McGraw-Hill, Gannett, and even Time Warner, it's Davis' frank and insulting appraisals of certain industry colleagues that are often most memorable. On Malone: "The guy is a genius but then, so was Al Capone. He's the smartest guy you'll ever meet.

He's brilliant. But he stands for nothing, believes in nothing and has contempt for anyone that walks and talks." On Sony President Norio Ogha: "I know Ogha speaks English. There's nothing more irritating than talking to a man who knows exactly what you're saying but just gives you this look." On Ted Turner: "As I got to know him, I learned to make sure I got him in the right mood swing, or he'll be crazy. He's on lithium, you know. When we got to talking, he'd get so excited I thought he'd have an unregulated orgasm." in July.

Gleason's hiring fills the last major spot in Mancuso's new MGM team, which is trying to rebuild the studio for its owner, French bank Credit Lyon-nais. Susan Wrenn has been promoted to senior vice president and media director of the marketing division of Paramount Pictures' motion picture group. Lisa E. Davis has been named partner at the entertainment law firm Frankfurt, Garbus, Klein Selz, the first African American to be made a partner at the firm. Davis' clients include filmmakers Spike Lee and Leslie Harris, author Terry McMillan and Chuck of musical group Public Enemy.

1 Market share Films I Paramount 15 Trlstar 13 27 24 12 New Line 3.0 Miramax 1.9 MGM i I releases for the weekend ended Jan 2, in ft, rs. iv -i i- i 1 V'" Vlt rM 1 paw I I Stern's Gross Special Tops Pay-TV Grosses Sony Fills New-Technologies Post After a holiday cease-fire in the marathon battle for Paramount Communications analysts and others look for Viacom Inc. to raise the stakes or cry "uncle" as early as Wednesday. Some insiders are betting that Viacom Chairman Sumner Redstone will pull out of the competition with QVC Network Inc. before bidding up a price that's already reached "never-never land," as he recently put it.

But sources say the Viacom chairman still has some aces in the hole. One intriguing scenario has Redstone financing a higher bid with bank loans instead of outside investments, because the interest would be deductible. Redstone's main bankers which include Citibank, Morgan Guaranty and Bank of New York-have already extended enough credit for him to best QVC's offer if he chooses to take that route. Banking sources say Redstone might be able to tap as much as $1 billion to $2 billion from the lenders, since he didn't take all of the credit they initially extended. But the same sources say it's unlikely he will borrow much more, because the banks would exact stiff guarantees, includ-1 ing shorter periods to repay the money and various restrictive covenants.

The value of the Paramount bidding has reached as much as $10.2 billion in the last few weeks. Lisbeth R. Barron, an entertainment analyst at S.G. Warburg Co. in New York, says that, based on current stock prices, Redstone needs about $600 million in cash to take back the lead from QVC, plus a way of guaranteeing the value of the stock investors would receive.

But Barron is also skeptical that Redstone would be able to raise the full amount through bank financing. She estimates that the Viacom chairman would be able to borrow only $200 million to $300 million because of public debt agreements with borrowers and internal i fears that the company would become too highly leveraged. While the bank option would guarantee Redstone full management control of Paramount, sources say he remains in discussions with his two investors Blockbuster Entertainment and Nynex about increasing their stakes in the deal. As of Monday, there were no signs of an agreement. One reason: All sides were said to be regrouping following holiday vacations.

Based on the current pace of the talks, some sources speculate that Redstone will take his decision down to the wire meaning Friday's deadline. Paramount gained 50 cents a share on the neighborhood of $5 million to $6 million, observers estimated. Another record probably set by Stern's show is for bad taste during a live telecast. Viewers who tuned in got to witness a woman eat live maggots, see "Star Wars" actor Mark Hamill lick chocolate sauce off a woman's breast, and watch Stern offer John Wayne Bobbitt $15,000 to expose his severed penis on camera. (He declined, but Bobbitt did earn $260,000 from the sale of "severed part" T-shirts.) None of which kept pay-per-view industry executives from pronouncing the telecast a roaring success.

"This was a phenomenal event," said Bonnie Werth, president of Team Services, an independent PPV marketing firm. "Stern probably has a franchise now," Werth said. No word yet, however, on when Stern plans his second show. "He's gone on vacation," Duva said. "He deserves one." Deals Technology: Sony Pictures Entertainment is increasing its commitment to new technology.

The budget for the company's new-technologies division for the next fiscal year will jump from about $25 million to about $80 million, according to sources. The funds are earmarked for the development of a virtual reality system and other entertainment projects, sources said. The division's staff and overhead will not expand significantly. A Sony spokesperson refused to comment. Sony's new-technology group, which is headed by Mitchell Cannold, was formed about 18 months ago to develop and analyze new-technology opportunities for Sony's various entertainment units.

With the consolidation of Sony's U.S. entertainment and electronics divisions last spring, the group's purview expanded to include all of Sony U.S. divisions. Last year, Cannold's group facilitated Sony's agreement to finance and distribute three films produced by Interfilm, in which the audience can choose plot twists and influence the ending. As companies such as Iwerks, Showscan and Imax push the limits of the traditional movie theater experience, and as advances in interactive television and high-definition TV promise to alter entertainment in the home, all of the major studios are looking at new ways to move motion pictures into the new generation of entertainment products.

-AMY HARMON L1UVU1 MM ULJ'I" msxHa 1 nt Via toti-Ai Michael Eisner Financial Data Market capitalization: $23.0 billion Cash: $363.0 million Borrowings: $2.4 billion 1993 revenue: $8.5 billion 1993 profit: $299.8 million Earnings per share: $0.55 P-E ratio In 000a dose eng. YTD Lob Angeles Times Howard Stern and his best-selling book. Events takes its 45 distribution fee and $2 million in production and marketing costs are subtracted, Stern could earn in Compensation Although expected, the disclosure of Eisner's one-year compensation comes at an awkward time for the company because it is stumbling due to problems at Euro Disney. The company's net income plunged 63 in the year ended Sept. 30 to $299.8 million, largely due to charges related to Euro Disney.

The park near Paris has suffered from the slow European economy, the strong French franc and the tightfisted-ness of tourists visiting the park. Disney owns 49 of the park's parent company. It is currently negotiating with Euro Disney's lenders on a restructuring plan. In a recent French magazine interview, Eisner said that closing the park was one option, although most observers interpret that and other ominous statements from the company as a negotiating ploy. Who got the biggest bonus at Disney? Vice Chairman Roy E.

Disney, nephew of founder Walt Disney and a man estimated by Forbes magazine to be worth $540 million. Disney, who oversees animation, received a $450,000 bonus, according to the proxy, the highest among senior executives. Separately, Disney said Monday that it is cooperating in helping to produce an audit of Euro Disney and denied a complaint by three French banks that it is not doing so. On Monday, a spokesman for Banque Nationale de Paris said that BNP, Banque Indosuez, and Caisse des Depots et Consignations had sent a letter to Disney complaining of Disney's non-cooperation. Routers contributed to this report.

ii A. A Sony Corp. of America has appointed Matt Rothman director of new business development and research for its new-technologies division. Rothman, previously a finance and technology writer for Daily Variety, will analyze business opportunities in emerging technologies, coordinate corporate research on new technology and work closely with third-party alliances. Metro-Goldwyn-Mayer hired Paramount executive Larry Gleason as president of worldwide theatrical distribution for its MGMUA Distribution Co.

Gleason most recently was president of the theatrical exhibition group at Paramount. In joining MGM, Gleason rejoins his former boss, Frank Mancu-so, the former chairman of Paramount Pictures who was tapped to run MGM The Times Film Index Domestic market share for 1993 and number of films currently in release for U.S. distributors from Jan. 4, 1993, to Jan. 2, 1994: By JOHN LIPPMAN TIMES STAFF WRT1ER Howard Stern's raunchy New Year's Eve special looks to be the top-grossing entertainment pay-per-view program of all time, beating out the previous record holder, a 1991 concert by the squeaky-clean pop group New Kids on the Block.

Main Events Television, which distributed the "Miss Howard Stern New Year's Eve Pageant," said a final tally will not be available until later this week, but the company estimated that more than 270,000 homes paid an average of $39.95 for the one hour and 50 minute special. If those figures hold up, the special will, have grossed at least $12 million. "In markets where Howard is No. 1 on the radio, we outdrew prizefights," said Kathy Duva, marketing director at Toto-wa, N.J.-based Main Events. "I think we did very well." How much of the take shock jock Stern actually gets is unclear, but after Main EISNER: Record Continued from Dl expert Graef S.

Crystal, who designed Eisner's pay and incentive package a decade ago. According to Disney's annual proxy statement released Monday, almost all of Eisner's total compensation in the fiscal year ended Sept. 30 came from the profit he made when he exercised options on 5.4 million shares at the end of 1992 in anticipation of higher taxes from the Clinton Administration. Added to that was his annual $750,000 salary frozen at that level until 1998 and $9,667 in miscellaneous pocket change. For the first time, neither Eisner nor Disney President Frank Wells (who exercised $60 million worth of options) received a bonus, because Disney's return on shareholder equity did not reach the level required to trigger the added pay, a factor due entirely to the drag on the company from Euro Disney.

Under Eisner's contract, Disney must post a return on equity of at least 11. The company's return was 13 before Euro Disney and other adjustments, which chopped the return to 6. Disney executives declined to comment on Eisner's pay. A whopping total had been expected ever since the company disclosed that Eisner was exercising his options before President Clinton took office. Indeed, as part of Clinton's first-year budget deal, upper-income taxes were raised.

Crystal estimated that Eisner personally saved about $17 million by exercising the options in late 1992. Eisner still has options on about 8 million shares that he may exercise in the future. At today's value, they are worth about $175 million. Market share Films 38 22 26 Columbia 20th Century Fox 22 Total grosses of the latest Top 10 box office millions of dollars: Chg. Box Pro).

Wks.ki Wknd. from office U.S. Rank Film Distributor release Screens total last to date B.O. Mrs-Doubtflre Fox 6 2,325 $16.3 74 $122.5 $157.0 2 ThePeiicanBrief Warner Bros. 3 2008 Ti.l 18 61.T 88LO 3 Tombstone Buenavista 2 1.955 8.7 35 23.2! 37j0 4 SisterAct2 Buena Vista 4 2,106 ai 56 aT.2 58X1 5 Beethoven's 2nd Universal 3 2,048 7.6 78 31.9 410 6 Old Men Warner Bros.

2 H244 7.5 93 17.0 35.0 7 Wayne's World 2 Paramount 4 2.240 4.0 12 40.1 46.0 8 The Piano Miramax 8 523 24 67 "TiTi 22.0 9 Geronimo: A Legend Columbia 4- 1,636 2.0 18 15.1 18.0 10 Ghost In the Machine Fox 1 1,031 19 2.6 7.0 Dtetributore receive roughly half of ben offlca revenue, on amrage. Sources: Top 10 provided by Entettalnmem Data box office protections provided by Usbeth R. Barron, S.Q. Warburg a Co. Lot Angeles Times i.