The Washington Star is expected to show a loss "in excess of $16 million" this year, James R. Shepley, president to Time Inc., said yesterday.
Shepley called the figure an "investment mode loss" and said it could be attributed to capital improvements at the paper, including purchases of new computerized systems to handle news, circulation and advertising materials.
The Star is "computerizing everything we can computerize," Shepley said, emphasizing that the Star's losses would decrease in 1980 and 1981.
Time Inc. purchased the Star last year for about $28 million and has pledged a $60 million, five-year investment to upgrade the paper. The Star lost about $7.2 million for the first 11 months of 1978.
Shepley, in a speech to the Washington Society of Investment Analysts, said he is encouraged by the Star's recent circulation figures.
For the six-month period ending Sept. 30, the Star's daily circulation increased by 14,148 and its Sunday circulation increased by 4,950 over the same period last year.
The Washington Post's circulation for the same period increased by 19,460 for the daily edition and 22,650 for the Sunday Post.
Shepley also said the Star's national advertising revenues exceeded $1 million for October, a new record for the paper, and that the Star improved its market share of local retail advertising from 29.5 percent to 31.8 percent. i
Shepley said that the company has "no intention" of selling the paper and that it would be "modestly in the black" at the end of the five-year planning period.
The Star has no intention of becoming a morning newspaper, although the paper began a morning edition last July, Shepley said. Instead the Star would continue to be an all-day paper, he said. "It's not our intention to be against the Post in its field," he said.
"It is neither in our present thinking nor in our long-term expectations that the Star can again reverse the position which the Post achieved in the Fifties," Shepley said. "That is not in the cards."
"All the Star seeks is a market share that will make it a viable competitor to the Post and ensure that the nation's capital will continue to have at least two daily newspapers," he said.
On other matters, Shepley said the company was considering publishing a new science magazine for the layman, but that the company has no intentions of acquiring new companies in the near future.
As a result of expected problems in the building materials industry, Shepley said he doubted that the company would be able to match its $5.31-per-share profits figure of 1978.
Further, Shepley said that because of the prospects of a possible prolonged recession, "It would be futile for me to try to forecast our financial results next year."
But, Shepley also said that prospects for the company's magazines appear good in light of recent increases in magazine advertising revenues.
Shepley was very enthusiastic about the company's pay- and cable-television holdings, which include Home Box Office and American Television and Communications.