Crown Says Programming, Marketing Costs Down

Q3 earnings lower because of special gains a year ago
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Crown Media Holdings, which owns the Hallmark channels, said
its earnings dropped in the third quarter and that its programming and
marketing expenses were lower.

Net income was $11.5 million, or 3 cents a share, down from
$163 million, or 45 cents a share, a year ago. The company had a gain from the
sale of a discontinued operation a year ago. Adjusted earnings before interest,
taxes and depreciation were up 32% to $31.3 million.

Revenue rose 4% to $147.6 million in the quarter. Subscriber
fee revenue was up 7% to $19.3 million because of contractual rate increases.
Advertising revenue was up 3% to $188 million.

"Crown Media saw a positive third quarter with solid
increases in EBITDA and advertising revenue," Bill Abbott, president and
CEO of Crown Media Family Networks, said in a statement. "During the third
quarter, our family-friendly programming continued to be of high value to
advertisers and viewers despite strong competition from the Summer Olympics."

Abbott added: "We are confident in our ability to capitalize
on the strength of our brand during the upcoming holiday season and look
forward to our holiday programming schedule, and to achieving our fourth
quarter revenue goals."

Crown Media said that programming expenses dropped 8% in the
quarter to $29.7 million as several program license agreements expired.
Marketing expenses dove to $400,000 in the quarter from $2.6 million in the third
quarter of 2011. Marketing expenses will increase in the fourth quarter to
support holiday programming, the company said.

The company said that its upfront sales resulted in double-digit
increases in volume from a year ago. Prices were up by mid-single digits, and
first-time advertisers are paying rates 22% higher than the average of sponsors
already doing business with the channel.

In the scatter market, prices were up 53% from the 2011-12
upfront on Hallmark Channel and up 51% on Hallmark Movie Channel.

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