Turner Takes $104-Million Hit for 'Without a Trace'

Time Warner confirms TNT took write-down for Warner Bros.-produced procedural

By Claire Atkinson -- Broadcasting & Cable, 2/3/2010 4:50:10 PM

Time Warner confirmed Feb. 3 that a $104 million programming write-down that appeared as part of its Turner unit earnings was related to the CBS series Without A Trace. 


Time Warner ultimately took a $77 million charge on the show, as a result of financial consolidation. Experts suggest that Warner Bros. may have been counting on the back-end revenue that never materialized and that Turner's inability to turn it into a revenue-generator turned it into a double-whammy for the parent company. Time Warner's earnings statement said that Warner Bros is "attempting to re-license [the show] to a third party."  

Warner Bros. is the No. 1 supplier of TV shows to the networks and has been for 18 of the past 23 years.

Separately, Time Warner Chairman and CEO Jeff Bewkes said on the earnings call that he saw lots of opportunities for Warner Bros.: "We see encouraging secular dynamics this year and over the next several years, with recent signs that broadcasters may be able to secure our cash carriage fees and NBC's recent decision to resume broadcasting scripted programming at 10pm and the robust marketplace for both original and off network programming on cable."

Bewkes said the company was committed to increasing original production and programming investment in its cable networks, but acknowledged that some programming bets didn't always pay off.

"We're not totally hitting it, and you need to move the line up a little, which we are doing," he said, referring to the host of star vehicles TNT and TBS rolled out for the upfront in May 2009. Some shows "didn't work as well as we thought," he added. "It will take a little longer to rotate out, but I don't think it's a close structural problem."  

Time Warner CFO John Martin predicted that ad revenue from entertainment networks would be up in the first quarter. The networks group, which includes CNN beyond the entertainment networks, were 4% down in fourth-quarter ad revenue. CNN accounted for about 2% of that dip on tough political comparisons with the period in 2008.