Jolted by a deteriorating advertising market and a costly bet on baseball, CBS Inc. said yesterday it expects to lose money in the final three months of the year and post lower profits for all of next year.

The broadcasting company did not specify the extent of its anticipated loss in the fourth quarter, but its announcement illustrated how weak the television business has become in recent months. Demand for advertising time has been soft since the new prime time programming season began in September, with all three networks slashing some of their ad rates by 50 percent or more to attract business.

The CBS Television Network, once dubbed "the Tiffany Network" for its classy programming and glittering profits, has been hurt the most of the big three by the slowdown. CBS spent $1.06 billion on a four-year package of Major League Baseball games and had counted on coverage of the playoffs and World Series to catapult it past NBC and ABC this fall.

Instead, both the American League Championship and the World Series went only four games each, giving CBS far less air time to sell than expected and forcing it to offer free commercials to sponsors who had been promised higher ratings. The company said only that its losses on the baseball telecasts were "higher than anticipated," but analysts have estimated the games lost $75 million to $100 million.

Even without the costly baseball telecasts, CBS said its operating units will lose money in the fourth quarter. In addition to the CBS TV network, the company's major units include local television stations in New York, Chicago, Miami, Los Angeles and Philadelphia, and seven AM and 12 FM radio stations around the country. Local TV and radio ad sales are also weak.

"Everyone {in the television industry} is hurting, but not everyone is looking at a loss like this," said James Goss, an analyst with Duff & Phelps Inc. of Chicago. "Baseball really hit them." Goss said he does not expect the advertising market to rebound for at least another six to eight months.

Analysts expected CBS to lose about $30 million to $40 million in the fourth quarter.

Although CBS is running a close second to NBC in the prime time ratings, the bearish ad climate, combined with high programming costs and sports rights fees, are expected to hurt earnings into next year. Next year's results should also suffer because CBS won't have the right to broadcast such profitable events as the Super Bowl and the NBA playoffs, as it did this year.

CBS's announcement was a surprise to Wall Street investors and analysts, who had been anticipating a break-even performance or a slight profit in the fourth quarter. CBS's shares closed at $159.75, off $4 per share, yesterday in trading on the New York Stock Exchange.

At the moment, CBS's most profitable holding is its bank account, which has $3 billion in cash the company raised by selling off its toy, records and publishing divisions over the past four years. CBS earned $43.3 million in interest in the third quarter.