SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 27, 1994
COMSAT Corporation
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(Exact name of Registrant as specified in Charter)
District of Columbia 1-4929 52-0781863
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(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification
Number)
6560 Rock Spring Drive, Bethesda, MD 20817
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (301) 214-3000
Not applicable
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(Former name or former address, if changed since last report).
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Item 5. Other Events
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Attached to this report as Exhibit 20, and incorporated by
reference in this item, is a Press Release of the Corporation,
distributed on October 27, 1994, describing certain developments
in the Corporation's Entertainment segment, including an
agreement to purchase the assets of Beacon Communications Corp.,
a film and television production company, and a memorandum of
understanding with The Anschutz Corporation regarding the
construction of a new sports and entertainment complex in Denver.
Item 7. Financial Statements and Exhibits
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(c) Exhibits (listed according to the number assigned in
Item 601 of Regulation S-K).
Exhibit No. Description
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20 Press Release dated October 27, 1994.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
COMSAT Corporation
By: /s/ C. Thomas Faulders, III
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C. Thomas Faulders, III
Vice President and Chief
Financial Officer
Date: October 27, 1994
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EXHIBIT INDEX
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Exhibit No. Description Page
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20 Press Release dated October 27, 1994. 5
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Exhibit 20
COMSAT Corporation FROM: COMSAT Corporation
NEWS RELEASE 6560 Rock Spring Drive
Bethesda, MD 20817
PHONE: 301 214 3658
FAX: 301 214 7130
DATE: October 27, 1994
COMSAT AGREES TO ACQUIRE BEACON COMMUNICATIONS,
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PROPOSES NEW DENVER SPORTS & ENTERTAINMENT COMPLEX
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BETHESDA, Md. COMSAT Corporation (NYSE:CQ) today announced
major steps to expand its entertainment business, with an
agreement to purchase Los Angeles-based film and television
production company Beacon Communications, and an agreement in
principle with The Anschutz Corporation to construct a state-of-
the-art sports and entertainment complex in Denver. Beacon, an
independent filmed entertainment company, has a long-term
production financing and domestic distribution arrangement with
Sony Pictures Entertainment.
"Telecommunications and entertainment are merging," said COMSAT
President and CEO Bruce L. Crockett. "These ventures put us on
both sides of this convergence, and give us greater control of
content, positioning COMSAT as a major player in the sports and
entertainment business."
"We are delighted to welcome COMSAT into our partnership with
Beacon," said Alan J. Levine, President and Chief Operating
Officer of Sony Pictures Entertainment. "COMSAT shares our
vision of the future growth of our business, and we look forward
to the opportunity to forge a strong working relationship with
them."
Beacon and the Denver complex will add two key components to
COMSAT Video Enterprises' successful entertainment business that
already includes the NBA Denver Nuggets, television sports
programming production, network distribution and video-on-demand
plus interactive information for the lodging industry.
"We're building on a firm foundation of success in our existing
businesses, and matching up with strong, strategic partners to
move into the future," said COMSAT Video Enterprises President
Charlie Lyons. "COMSAT will have all the elements of a 21st
century entertainment company, including professional sports in a
state-of-the-art venue, film and television production
capabilities, and multiple distribution channels that include
video-on-demand."
"This arrangement makes our close ongoing relationship with
Beacon even stronger, and positions Beacon to serve as an even
richer and more fertile source of product for Sony Pictures in
the years to come," said Mark Canton, Chairman of the Columbia
TriStar Motion Picture Companies.
Fred Bernstein, Columbia TriStar Motion Picture Companies'
President continued, "This adds an exciting new dimension to our
partnership with Beacon. We anticipate the exploration of
exciting new opportunities with COMSAT's involvement."
Beacon's assets include copyrights on its existing films,
Beacon Records and a multi-picture development, production and
domestic distribution agreement with Sony Pictures Entertainment
(Columbia & TriStar).
Beacon's previous features, all critically acclaimed, include
"The Commitments (1991)," "A Midnight Clear (1991)," "Sugar
Hill (1994)" and TriStar Pictures' "Princess Caraboo (1994)."
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"The Commitments" garnered four 1991 British Academy Awards,
including "Best Picture" and "Best Director."
For television, Beacon produced David Mamet's screen adaptation
of "A Life In The Theatre" in a co-venture with Turner Pictures.
Beacon's next theatrical release, Columbia Pictures "The Road
to Wellville" starring Anthony Hopkins, Matthew Broderick, Bridget
Fonda, John Cusack and Dana Carvey, opens tomorrow.
"In terms of scale, vision, management and opportunity we feel
we have found perfect partners to complement our Sony Pictures
relationship," said Beacon's Armyan Bernstein. "COMSAT has had
great success in spotting entertainment assets that they could
nurture to achieve their fullest potential. We have the same
vision of the future of communications -- a world that will find
more and more alliances between telecommunications companies and
the creators of software."
Bernstein and Marc Abraham will continue to lead the company in
the going-forward roles of chairman and president, respectively.
Both are being signed to five-year employment contracts.
"Beacon has meant quality films and television at moderate
cost," said Abraham. "This commitment continues, and with COMSAT
our horizons widen tremendously. You can add professional
sports, an entertainment complex and video-on-demand technology
to the possibilities open to us. I can't think of what could be
more exciting."
The transaction is structured as an asset purchase with
payments of approximately $10 million in cash, $19 million in
assumption of existing liabilities, and future cash
considerations contingent on the production and performance of
motion pictures over the next five years.
Michael Ovitz and Sandy Climan of Creative Artists Agency of
Beverly Hills, Calif., advised COMSAT on the Beacon acquisition.
"COMSAT management approached this acquisition with a very clear
goal," said Ovitz, "to continue to successfully position their
company, for the long term, in the content business. Army
Bernstein and Marc Abraham bring to COMSAT terrific management
skills and broad knowledge of the creative community. Together,
COMSAT and Beacon Communications, in their ongoing alliance with
Sony Pictures Entertainment, have the resources and the expertise
to become a major new entity in the entertainment industry,
expanding the marketplace for artists and producers across the
board."
Allen and Company and Salomon Brothers also served as
independent advisers to COMSAT. The purchase agreement was
signed this morning, and COMSAT expects to close the transaction
before the end of the year.
In another development, COMSAT's plans to construct a state-of-
the-art sports arena and entertainment complex near downtown
Denver in a 50-50 partnership with The Anschutz Corporation have
been advanced with the signing of a memorandum of understanding
to formally establish a joint venture. Scheduled to open for the
1997-98 NBA season, the 19,000-seat arena's construction is
contingent on city approval. A decision is expected by year's
end.
"Since purchasing a majority ownership stake in the Nuggets in
1989, COMSAT has
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forged a new era for the team with sound planning decisions and a
keen understanding of how to make a franchise successful," said
NBA Commissioner David J. Stern. "The arena will be another
visionary step in the right direction."
The new facility will generate additional revenue and augment
fan amenities to strengthen the franchise. It will also allow
for the implementation of the latest technological innovations.
The facility will allow Denver to compete for a National Hockey
League franchise and other national sporting and entertainment
events.
The arena site is located next to Elitch Gardens, a $95 million
theme park under construction in which COMSAT and The Anschutz
Corporation hold minority interests.
"We're delighted about our partnership with COMSAT, and even
more delighted about what this means for downtown Denver and the
economic development of this city," said Philip Anschutz,
Chairman and CEO of The Anschutz Corporation.
COMSAT and Prime Sports Network, a division of Tele-
Communications, Inc. and Liberty Sports, are contemplating
construction of a television production center to service the
arena and for other potential projects. COMSAT and Prime Sports
Network already work together in partnership with NORAC, Inc. in
the production of television sports programming through Mountain
Mobile Television.
COMSAT Video Enterprises is a subsidiary of COMSAT Corporation,
a global provider of communications and entertainment products
and services.
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CONTACTS:
Paul Jacobson, COMSAT Mike Troiano, COMSAT
301.214.3731 (media) 301.214.3244 (analysts)
Joe Tomkowicz, COMSAT
301.214.3658 (media)
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