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Fox Posts Net of $1 Million in Quarter : Problems Remain as Studio Suffers Yearly Loss of $79.1 Million

November 30, 1985|AL DELUGACH | Times Staff Writer

20th Century Fox Film Corp. disclosed Friday that it turned a modest profit in its fourth fiscal quarter, but the movie studio still suffered a $79.1-million net loss for the full year.

Although the $1-million net profit in the last quarter of the year was cause for rejoicing at the Los Angeles-based company, the full-year loss offered more evidence of the problems that continue to plague Fox: sharply reduced revenue from too many moviegoers staying away from its theatrical films, while too few of its television series make it on the networks.

The studio noted, however, that the latest fiscal year's loss was smaller than the $89.9-million loss reported for the previous year.

Compared to the modest profit in the most recent quarter, fiscal 1984's fourth quarter had a $70.7-million net loss. The fourth quarter of fiscal 1985 produced Fox's first quarterly profit in 21 months.

But in the year-ago period, Fox took big write-offs as a new management under Chairman and Chief Executive Barry Diller took over.

Cost Cutting Credited

The studio attributed the modest quarterly profit this year to cost cutting instituted by the new management team and the success of two films that it released: "Prizzi's Honor" and "Cocoon."

Last March, media baron Rupert Murdoch bought a 50% interest in Fox from Marvin Davis and contracted to buy the other half from Davis in September.

The reason that it took three months for Fox's results for the fourth quarter and the year to become public is that privately owned Fox's 10-K annual report to the Securities and Exchange Commission was not due until Friday.

Firms whose stock is publicly traded generally announce their earnings about a month after the end of a fiscal year.

Fox is still required to file quarterly and yearly reports to the SEC solely because it has some debentures still owned by the public.

The latest Fox 10-K shows that operating revenue plunged to $617.96 million in fiscal 1985 from $753.67 million a year earlier.

Management said the decline in motion picture revenue was "due primarily to unsuccessful results from current theatrical releases" in addition to lower receipts from licensing of pictures to network television. Also, the company attributed lower revenue from television production to a decline in the number of its series airing on networks (six during 1985, compared to 10 in 1984).

In a sort of good-news corollary, the report showed that operating costs declined nearly as much as the full year's revenue. Fourth-quarter revenue actually rose to $167.4 million from $136 million a year earlier.

Little New Data

Aside from financial results, Fox's latest 10-K contained little new information.

The studio disclosed that it has agreed to pay Norman Levy, its former vice chairman, $1.5 million in settlement of a lawsuit that he brought over his employment contract. Terms were not announced when the accord was reported last August.

Fox's 10-K also showed that the studio's long-term debt was reduced to $261 million from $363.2 million a year before, largely because of a $131.9-million capital contribution resulting from Murdoch's purchase of his first 50% interest in Fox. Also, the studio's net worth--assets minus its liabilities--improved to $85 million from $66.7 million a year earlier.

The new 10-K gave no indication of when the sale of the other half of Davis' stock to Murdoch would be completed. However, sources close to the studio said Friday that they expect the deal to be completed within two weeks.

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