Spelling revs down; cash flow up

Retreat from film biz cuts into revenues

By RICHARD MORGAN

NEW YORK -- Spelling Entertainment Group, which is 80% owned by Viacom Inc., announced Wednesday that net income fell to $51,000 in the second quarter, compared with $3 million in the year-earlier period, as revenues dropped 27% to $108.8 million.

A transition out of the film business contributed to a heavy drop-off in revenues.

Meanwhile, cash flow, or earnings before interest, taxes, depreciation and amortization, reached $4 million, compared with a loss of $2.5 million in the year-earlier quarter.

The cash-flow improvement was attributed to higher network license fees for established series, improved distribution revenue at home and abroad and the sale of TeleUNO, the 24-hour Latin American entertainment channel, to Sony Pictures Entertainment.

Spelling Television, which now represents 85% of the company, saw its cash flow fall 24% to $7.2 million as sales dropped 6% to $92.3 million.

Notwithstanding these declines, Peter Bachmann, the president of Spelling Entertainment, noted that the company produced nine pilots in the first half of 1998, which yielded four new series.

The new "potential franchises," he said, brings the total of Spelling series in production to 12 -- "a record high."