American Broadcasting Cos. Inc., renewing its commitment to cable-television programming, agreed yesterday to purchase Entertainment and Sports Programming Network (ESPN), a sports-oriented cable network, from Texaco Inc. for $202 million.
ABC, which already owns 15 percent of ESPN, in recent months has folded or merged its three other cable-television programming investments after posting $50 million in losses from the ventures. The big communications company is likely to lose a few more million on ESPN--the sports network lost $100 million in its five years of existence but is expected to begin operating in the black late this year.
Texaco put ESPN up for sale earlier this year after it purchased the popular cable network's corporate parent, Getty Oil Co., for $10.1 billion.
The planned sale to an ABC subsidiary, ABC Video Enterprises Inc., shuts out cable-TV magnate Ted Turner, who last month indicated an interest in purchasing the sports channel.
Turner, in a statement released from the Atlanta headquarters of Turner Broadcasting System, expressed disappointment with Texaco's decision. "This action was taken while we and a number of other parties were awaiting financial information on ESPN necessary to prepare a bid," he said. "The sale of ESPN was completed without the solicitation of bids from any parties other than ABC." Turner declined further comment, but a spokesman said no legal action was planned to attempt to halt the sale of ESPN.
ABC, though professing an interest in cable as a medium of the future, has in recent months merged its ARTS cultural channel with the Entertainment Channel, owned by RCA Corp. and Rockefeller Center, to form the Arts and Entertainment Network; put the Daytime lifestyle channel together with Viacom International's Cable Health Network to form the Lifestyle Channel, and sold the Satellite News Channel, which it operated with Westinghouse Broadcasting, to Turner's Cable News Network.
ESPN executives, predicting that the network's first profitable quarter will be in the final quarter of this year, have estimated that the channel's advertising revenue will total $55 million this year while another $10 million in revenue will come from cable systems, which are charged a few pennies per subscriber per month for the service.
ESPN is transmitted by satellite from the network's Connecticut base to 30 million households, carrying a smorgasbord of sports ranging from professional basketball and hockey to rodeo and Australian Rules Football. It shares with ABC the network rights to U. S. Football League games, giving ABC monopoly control over those rights following the planned merger.
Under the terms of its agreement with Texaco, ABC will pay $188 million for Texaco's interest in ESPN and another $14 million for satellite uplink and transponder facilities that were owned by Getty and used by ESPN.
ABC had had an option to purchase a stake in ESPN for several years, and exercised that option by buying 15 percent earlier this year.