Turner Broadcasting buys 2 filmmaking firms Cash-stock deal worth $672 million

August 18, 1993|By New York Times News Service

Turner Broadcasting System Inc. agreed to buy Castle Rock Entertainment and New Line Cinema Corp. for a total well in excess of $672 million in cash and stock under deals approved by Turner's board yesterday.

The acquisitions would give Turner a long-sought stake in the film production business, providing it with programming for its entertainment channels, Turner Network Television and the WTBS superstation.

The deal reflects the increasing vertical integration of the entertainment business as companies seek to control both production and distribution of entertainment programming.

An executive close to Castle Rock said Turner Broadcasting would pay $100 million in cash or stock for the production company as well as $46 million of the corporate debt that the company owes Westinghouse Electric Corp., an investor, and $15 million due to Sony Pictures, another investor.

Mr. Turner will also assume about $100 million in bank debt collateralized by Castle Rock's future film and television productions.

Castle Rock's recent film credits include "In the Line of Fire" and "A Few Good Men."

In the New Line deal, several people close to that company said Mr. Turner would acquire New Line for about $511 million in Turner stock and the assumption of about $70 million in debt.

The studio is best known for such movies as "Nightmare on Elm Street" and the "Teen-Age Mutant Ninja Turtles" series.

New Line, one of the few publicly traded independent film companies, is also one of the few to have worldwide distribution capabilities. It would continue to distribute its product and eventually distribute Castle Rock's films, but not for several years since Castle Rock's releases are distributed by Sony Pictures, one of its key investors.

Sony will continue to distribute nearly all of Castle Rock's films at least through the end of 1997, but will get a higher than normal distribution fee.

After that, Castle Rock will set up its own distribution operation within the Turner organization. Last year Castle Rock produced six films; it expects to increase production gradually.

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