After four years and seven unsuccessful films, CBS Inc. announced yesterday that it would "consolidate" its money-losing Theatrical Films division with its Worldwide Enterprises unit to create a new division, CBS Productions.
The new unit, which will be a part of the CBS/Broadcast Group, will create an "integrated operation that can produce and distribute to all media and markets worldwide," said Alan Levin, who was named president of the division.
It also will provide the company's Worldwide Enterprises unit, which has been operating at a profit, with a source of new material for international distribution, said John Eger, a CBS senior vice president. Worldwide Enterprises markets and distributes CBS programming, including news and sports, overseas.
"There hasn't been enough product in the pipeline in the past," he said, also pointing out that the Federal Communications Commission's financial interest and syndication rules place a limit on how much original programming the network can produce for television.
CBS Theatrical Films, launched in 1981, was to be a major source of both revenue and programming for the company. However, the films produced and distributed -- at a cost one analyst estimated at close to $100 million -- proved to be box-office flops.
"Their only failure was at the box office," asserted Levin, who argued that ancillary markets such as pay television and international sales could push them into the black. The films included "Back Roads," starring Tommy Lee Jones and Sally Field, and "Windy City."
Levin did not say how much money CBS is spending on its current theatrical film productions, saying it is "too early" to project what the budget for future films would be.
The theatrical films unit of American Broadcasting Cos. Inc. has enjoyed slightly better success in marketing to the box office.
The third major broadcasting network, National Broadcasting Co., has no theatrical films unit.
The move by CBS clearly underscores the growing importance of the international marketplace and the need for an international distribution network in the video marketplace.