In a major companywide restructuring effort, Crown Media Holdings Inc.
announced Monday that it will eliminate 30 percent of its work force, including
Lana Corbi, its U.S. president and CEO and head of Hallmark Channel.
Corbi, who took over Hallmark's reins in October 2001, will remain in a
'consultancy capacity' through the remainder of the year to assist in the
transition, the organization said.
Under Corbi's watch, the network increased its distribution base by more than
7 million subscribers to 47.5 million, according to Nielsen Media Research
estimates provided by Discovery Networks U.S.
Under Corbi, one of cable's highest-ranking African-American female
executives, Hallmark also boosted its primetime ratings by 25 percent to a 0.5
from the period of Oct. 1, 2001, through Sept. 29, 2002, according to a Turner
Broadcasting System Inc. analysis of Nielsen ratings data.
Nevertheless, Crown -- seeking to achieve breakeven status in the second half
of 2003 while 'aggressively' pursuing further subscriber-growth opportunities
for the channel -- eliminated Corbi's position as part of the restructuring.
Crown would not say who would take over the network.
'Lana is a very talented and skilled executive, and she has played an
important role in the launch of the Hallmark Channel,' Crown president and CEO
David Evans said in a prepared statement. 'Were it not for the very difficult
corporate decisions that had to be made, she would still be part of the
company.'
Crown will eliminate 130 positions as part of the company's restructuring of
its global businesses.
It will decentralize its operations internationally -- currently handled out
of four U.S.-based offices -- by localizing programming, marketing and ad sales
responsibilities within its units in Europe, the Middle East, Africa and Asia
Pacific. The company will also outsource its Latin American operations to a
local distribution partner.
As part of the restructuring, Crown said it would record a charge of
approximately $20 million during the fourth quarter of 2002. This charge will be
comprised of a cash charge of approximately $5 million for severance costs and a
noncash charge of approximately $15 million to record a writedown related to
satellites and facilities impairments and exit costs.
Additionally, Crown plans to record a noncash charge in the same quarter of
between $55 million and $60 million tied to certain programming, reflective of
the channel's attendant strategy.
Going forward, Crown expects these changes to reduce operating costs by a
total of $25 million versus 2002 levels, stemming primarily from decreases in
amortization and expenditures for overhead, satellite leasing, marketing and
programming.
