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EARNINGS

Expansion of Publishing Business Cuts CBS Profit

April 09, 1985|Associated Press

NEW YORK — CBS said Monday that its first-quarter profit fell 57% from a year ago on a 2% dip in revenue, reflecting the recent expenses of expanding its publishing business.

Meanwhile, new legal challenges were raised against CBS by Fairness in Media, a group that has said it wants to gain control of the company to end what it calls a liberal bias in the network's news reporting.

CBS reported that its profit in the first three months of the year fell to $16.7 million from $38.9 million in the same period a year ago. Revenue slipped to $1.12 billion from $1.15 billion.

A poor performance by the publishing division reflected charges associated with the $400-million acquisition of Ziff-Davis Publishing, which was completed Feb. 4, CBS Chairman Thomas H. Wyman said. Publishing profits fell 30%, while revenue rose 22%.

CBS said last month that the impact of the Ziff-Davis acquisition would be to reduce earnings for all of 1985 by less than $1 a share.

"While our first-quarter results are lower than those of a year ago, they are slightly better than our budget and fit with our expectations of a strong performance in 1985," Wyman said.

The broadcasting division performed solidly, he said, with profit up 9% on a 3% gain in revenue.

A decline in the records division was attributed to the absence this year of the blockbuster sales experienced in the first quarter of 1984 from the release of Michael Jackson's "Thriller" album, Wyman said.

Profits in that group fell 56% as revenue dropped 17%.

Elsewhere, Fairness in Media said it obtained a federal judge's order temporarily preventing CBS from implementing a change in its bylaws that would make calling a special shareholders meeting more difficult.

The directors of CBS removed a clause that enabled shareholders owning 10% of CBS stock to call a special shareholders meeting.

With the change, a special meeting only could be called by the chairman of the board jointly with the chairman of the board's executive committee, by vote of a majority of the directors or at the request of two directors.

Fairness in Media said a federal judge in New York told CBS that it could not implement the bylaws change until after April 17, when the annual shareholders meeting is scheduled to take place in Chicago.

But George Vradenburg, CBS vice president and general counsel, said the bylaws change is already in effect and did not require shareholder approval.

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