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Television Marriage Made in Heaven? : Broadcasting: Pat Robertson's buyout of MTM Entertainment made unlikely bedfellows. But the evangelist may have saved the company.

April 06, 1993|PATRICE APODACA | TIMES STAFF WRITER

In January, when MTM Entertainment Inc.'s parent was sold, the tongues were wagging in the television business.

The kicker was the identity of the buyer: televangelist Pat Robertson and his International Family Entertainment Inc., the Virginia Beach, Va., owner of cable's Family Channel. Robertson is IFE's chairman, and his family controls 22% of the company's stock.

The $86-million acquisition of Studio City-based MTM made for unlikely bedfellows. Robertson--who ran for President in 1988 on a conservative Republican platform--is now partners with Burt Reynolds, Harry Thomason and Linda Bloodworth-Thomason. Reynolds acts in and co-produces the sitcom "Evening Shade" with the Thomasons, MTM and CBS. The Thomasons are close friends of Bill Clinton and produced the inaugural celebration for the President.

Even William C. Allen, president of MTM Television--who survived a post-acquisition management shake-up--acknowledged some apprehension over the prospect of working for the TV preacher. "Everybody's concern is, will Pat come out and rear his head someday?"

But less than three months after the buyout was completed, IFE's plans for MTM are taking shape, and they are far from spiritual. Indeed, IFE is a highly profitable company. Its purchase of MTM was a calculated business move not unlike Turner Broadcasting System's 1986 acquisition of the legendary MGM film library and its purchase last year of cartoon producer Hanna-Barbera Productions, which gave TBS a supply of programming to exploit in domestic and international television markets.

"IFE acquired a very attractive group of programming assets at a very reasonable price," said analyst John S. Reidy at Smith Barney Harris Upham & Co.

Tim Robertson, 38, IFE's chief executive and Pat Robertson's son, said that having MTM in its fold gives IFE "the ability to walk into any situation in the world and have a guaranteed product flow."

That's a critical advantage as IFE prepares for global expansion. In September, IFE hopes to debut Family Channel U.K. in Britain, and if that's successful it will launch similar ventures in other countries. IFE is also planning two new U.S. cable networks, one devoted to game shows, the other with a cowboy theme.

MTM might produce new shows for IFE and can also provide old shows from its library, such as "The Mary Tyler Moore Show," "Lou Grant," "Hill Street Blues" and "St. Elsewhere." Meanwhile, MTM's distribution network can help sell original Family Channel productions--like "The New Zorro"--to other media outlets.

In IFE, MTM now has a parent that's on firm financial footing, and the Family Channel guarantees MTM a home for its programming. The cable network is one of the nation's largest, currently reaching 94% of all cable households.

The strategy is not without risks. Though "Evening Shade" is a hit, it's MTM's only current network show. MTM also produces "The New WKRP in Cincinnati," now in its second year of first-run syndication, and for next fall it is developing another first-run show, "Xuxu," a spinoff of a popular Brazilian children's series.

That's a far cry from MTM's glory days in the 1970s and '80s. Founded in 1970 by actress Mary Tyler Moore, her then-husband, producer Grant Tinker, and other TV veterans, at one time MTM had five network shows on the air and was a profitable company.

Then in 1988, British broadcaster TVS Entertainment acquired MTM for $320 million in a highly leveraged transaction that devastated TVS' finances and hampered MTM's ability to fund new production. The loss of TVS' United Kingdom broadcast license in a 1991 auction was the final, crippling blow.

In 1992, TVS--whose primary remaining asset was MTM--lost $10.2 million on $170 million in revenue. Even after divesting its British studios and its 50% share in MTM's Studio City television lot, TVS had little choice but to sell out.

But even with IFE's financial strength, MTM faces an industry in which it's tougher than ever to make money, and producing shows is a high-stakes gamble.

Some observers also question whether MTM's library of past shows will prove as durable as, say, the classic MGM films. Other companies, including Turner Broadcasting, reportedly considered making an offer for MTM, but decided to pass.

As for MTM's new product, "it can either have greater rewards or greater pain," said Jeffrey Logsdon, analyst at Seidler Amdec Securities.

Nonetheless, Tim Robertson, who was the chief architect of the buyout, is obviously pleased with the acquisition. His father, while giving his blessing to the deal, focuses his efforts on producing the "700 Club" show for his Christian Broadcasting Network. CBN spun off the Family Channel to IFE in 1989 to ward off challenges to CBN's nonprofit status.

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