Backchannelmedia

The Kansas City Star (Kansas City, Missouri)

By Jennifer Mann, The Kansas City Star, Mo.

Nov. 8--Crown Media Holdings, owner of the Hallmark Channel, narrowed its losses to 63 cents a share compared with $1.01 a share a year ago.

Losses for the quarter ended Sept. 30 were $65.8 million compared with $105.8 million a year ago.

Revenue for the quarter, which includes advertising revenues, subscriber fee income and other items, was $50.7 million, compared with $31.3 million for the same quarter a year ago, a 62 percent increase.

Advertising revenue for the quarter was up 37 percent to $33.6 million, while income from subscriber fees was up 90 percent to $4.6 million.

The cable channel also recorded $10.5 million in sublicense fees and other revenues.

The company, two-thirds of which is owned by Hallmark Cards, saw increased costs for services, $77.9 million compared with $54.6 million a year ago. It also reported higher selling, general and administrative costs of $15.8 million, up from $13.1 million for the same period a year ago.

The company said that original movies continued to drive ratings. The channel produced and broadcast more original movies than any ad-supported cable network during the year, with seven premieres in the third quarter.

The company said the Hallmark Channel had its highest-ever ratings for the third quarter, maintaining a ranking in the top 10 for total day household ratings, and ranked third among all ad-supported cable channels.

Crown Media also said it recorded its highest quarter in the key demographic group of viewers age 18-49 for both total day and prime time, ranking second in percentage growth within the non-news ad-supported cable channel group.

In August, Crown Media's management announced that it was exploring strategic alternatives, including a possible sale of the company. The company has formed a special committee of independent directors from its board to oversee the process.

During a conference call, the company president and chief executive officer, David Evans, told analysts that its advisers at Citigroup had met with undisclosed parties about acquiring the channel.

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