Citing marketplace "complexities" that "prevented us from achieving our financial expectations," American Broadcasting Cos. said Monday that it is phasing out its 6-year-old theatrical films operation and will close it by next summer.
The announcement by Frederick Pierce, president of ABC, came just five days after CBS, seeking ways to cut the nearly $1 billion in debt that it took on in resisting Atlanta cable-television entrepreneur Ted Turner's takeover attempt, said it may sell its interest in Tri-Star Pictures.
ABC's motion pictures division also makes TV movies, drama specials, series and miniseries for ABC-TV. Pierce said that the division now will concentrate on its "in-house" TV production and that Brandon Stoddard, head of ABC Motion Pictures since May, 1979, will continue in that post.
ABC was bought this year for $3.5 billion by Capital Cities Communications, which is expected to formally take over the company early next year.
Like CBS, ABC has been attempting to cut its costs. Citing an uncertain economy and a need to streamline itself, it laid off 350 of its 13,000 employees and eliminated 250 unfilled job positions in August.
However, Patty Matson, an ABC spokeswoman in New York, said the closing of ABC's theatrical film division was due to a "broader issue" than simply cost cutting. She said the company felt that, if it were to succeed in theatrical films, a much larger commitment was needed. It wasn't prepared to make that commitment, she said.
The division has made six movies to date, four of which it described as financially or critically successful. They are "Young Doctors in Love," "Silkwood," "The Flamingo Kid" and "Prizzi's Honor." The two others are "Class Reunion" and "Impulse."
Its seventh and final film, producer Leonard Goldberg's "SpaceCamp," currently is in production and is scheduled for release early next summer, ABC said.
Matson said it isn't known yet how many, if any, employees of the film division would be let go. "That is being worked out right now," she said. However, a source in the company said that between five and 10 employees probably will get pink slips.
CBS, which last week said it is putting up for sale KMOX-TV, one of five television stations it owns, is pledged to sell assets that over the next two years would yield an after-tax profit of $300 million.
Undecided on Sale
It is a partner in Tri-Star Pictures with Home Box Office and Columbia Pictures Industries. But it has not yet decided if it will sell its interest in the company, whose current major box-office hit is Sylvester Stallone's "Rambo: First Blood Part II."
CBS also owns CBS Theatrical Films, established in 1979. That division has failed to produce any box-office hits and is rumored to be on the verge of closing. A CBS spokesman in New York declined Monday to comment on those rumors.
However, should CBS close its film division and sell its interest in Tri-Star, those developments, coupled with ABC's action on Monday, would end the two networks' relatively brief involvement in producing theatrical films.
Although NBC this summer financed its first venture into theatrical films with "Code Name: Emerald," a spokesman said Monday that NBC has no intention of setting up a full-fledged theatrical film division, although it may finance other movies.
"Emerald," a World War II spy drama starring Ed Harris, currently is being tested in 100 theaters in Canada and the United States. It is tentatively scheduled for a December release, the spokesman said.