Tribune Co. has invested an additional $21 million to increase its stake in Time Warner Inc.'s WB television network to 21.9%, up from the 12.5% it purchased in August 1995.
Tribune, which owns 16 television stations that include some of WB's top affiliates, has one additional option that would increase its stake to 25%.
The investment reinforces Tribune's commitment to the new network even as press reports have called into question Time Warner's appetite to fund its continuing losses. Earlier this week, the Wall Street Journal reported that Time Warner Vice Chairman Ted Turner "is noisily complaining" about the WB, which he said is "losing a lot of money, by my standards."
The network has lost $165 million since its launch in January 1995 and is not expected to turn a profit until 2000. Under pressure from Wall Street to prop up its stagnant stock price, Time Warner is reviewing the cost structures and profit potential of each of its assets, with an eye toward reducing the company's staggering debt.
But Warner Bros. took the Tribune investment as an opportunity to stress its commitment to the network.
Ted Turner "has never talked to me about losses in the WB," said Robert Daly, chairman and co-chief executive of the studio. "There are a lot of valid reasons for the WB. With ABC, NBC and Fox increasing their in-house production, the marketplace is drying up. We have to have an outlet and protect ourselves. We created the WB out of necessity."
Networks are now free to produce more of their programming in-house and are doing so at a dizzying pace. Time Warner and Viacom Inc. both launched broadcast networks in January 1995 to ensure an outlet for the television production of their studios, Warner Bros. and Paramount Pictures, respectively, as new federal rules threatened to cut their programming strongholds.