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Carsey-Werner No Longer Seeks Buyer

The TV studio, which was trying to sell itself or find a partner, decides to remain independent for at least a year despite its recent struggles.

August 04, 2004|Meg James | Times Staff Writer

One of Hollywood's last major independent television studios, Carsey-Werner-Mandabach, has taken down its "for sale" sign -- at least for now.

The Studio City-based company that produced such landmark hits as "The Cosby Show," "Roseanne" and "3rd Rock From the Sun" said Tuesday that it was abandoning its efforts to sell or find a strategic partner. The company had hired investment banker UBS this year to explore options.

"After careful analysis we decided that independence remains the best way for us to navigate the changing waters of the television business," partner Tom Werner said in a statement.

The company's library of television shows is estimated to be worth about $1 billion. Its current hit "That '70s Show" will begin its seventh season this fall on Fox Broadcasting and is also running in syndication. The studio produces "Grounded for Life," for the WB network, which is owned by Time Warner Inc. and Tribune Co., which also publishes the Los Angeles Times.

The company, however, is recovering from a bruising television season in which three new shows, "Whoopi" and "The Tracy Morgan Show" on NBC and "Game Over" for UPN failed to survive for a second season.

Unlike other independent producers, Carsey-Werner has been able to weather a decade of media consolidation and survive as a boutique studio because its library of shows continues to throw off profits. But unlike in the early 1990s, television networks are increasingly turning to their own in-house studios to supply their prime-time shows, leaving little room for independent producers.

The only other large television studio not affiliated with a network is Sony Pictures Entertainment. That's because federal rules prohibit foreign companies from owning U.S. television stations. Sony Pictures is a division of Japan-based Sony Corp.

Industry insiders said the three partners decided to take the company off the market for at least a year, until the resolution of Metro-Goldwyn-Mayer Inc.'s effort to find a buyer for the movie studio and its vast film library. Interest in that potential transaction had overshadowed the possible sale of Carsey-Werner, one source said.

Potential suitors for Carsey-Werner are widely believed to be General Electric Co.'s NBC Universal, which this year boosted its cable portfolio by acquiring Vivendi Universal's U.S. entertainment assets, and Viacom Inc., which owns a collection of cable outlets including the TV Land cable channel.

However, doing a deal with Viacom might have been ticklish this year because Carsey-Werner is defending itself in a breach-of-contract lawsuit brought by a Viacom unit.

CBS sued Carsey-Werner three years ago, claiming the studio failed to repay more than $50 million that the network had spent to help finance the production of the show "Cybill." That case is scheduled for trial in March.

Carsey-Werner executives stressed that the firm wouldn't be retreating from the television business and was developing pilots for Fox and NBC. It also recently acquired the U.S. rights to the British program "Peep Show," and has a separate CWM Films division to produce feature films.

In a statement, Marcy Carsey, who formed the partnership with Werner in 1981, said the studio remained "excited about producing and distributing our own programs for the foreseeable future and bullish about the value of content."

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