Bell Atlantic pursues video network plans

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The Independent Online
BELL ATLANTIC, the most aggressive of the US regional telephone companies, is to make a dollars 3.5bn restructuring charge and confirmed plans with Hollywood agent Mike Ovitz for a video network.

The Philadelphia-based Baby Bell surprised the industry a year ago when it announced plans for a dollars 33bn merger with cable-TV giant Tele-Communications. The deal collapsed over disagreements on price earlier this year, but Bell Atlantic has pressed ahead with its ambitious plans for interactive multimedia services that entail replacing most of its existing lines and switches.

The restructuring charge against its third quarter earnings, which will equal dollars 2.3bn after taxes, is the result of the write-down of the value of its outdated copper wire network, following a decision by Bell Atlantic to stop accounting as a regulated utility. The charge will also cover the cost of cutting another 5,600 people from its payroll over the next three years - its third big round of redundancies since 1991.

The charge will leave Bell Atlantic, which earned dollars 386.7m a year ago and dollars 1.48bn in 1993, with a loss for the current quarter and 1994. The video-production deal Bell Atlantic and two other Baby Bells are discussing with Mr Ovitz would establish a TV studio to provide programming for new digital networks. The studio, which would be owned by Bell Atlantic, California's Pacific Telesis and New York-based Nynex, would both produce new shows and films, as well as buying them from studios.

Mr Ovitz, chief executive of talent agency Creative Artists Agency, is one of Hollywood's most powerful agents, with clients including Steven Spielberg and Tom Cruise.

He has acted as an investment advisor in many recent entertainment industry deals.