<PAGE> 1
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): April 26, 1994
SPELLING ENTERTAINMENT GROUP INC.
(Exact name of registrant as specified in its charter)
FLORIDA
(State or other jurisdiction of incorporation)
<TABLE>
<S> <C>
1-6739 58-0862100
(Commission File Number) (IRS Employer Identification No.)
</TABLE>
<TABLE>
<S> <C>
5700 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90036
(Address of principal executive offices) (Zip Code)
</TABLE>
(213) 965-5700
(Registrant's telephone number, including area code)
N.A.
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 26, 1994, DE Acquisition Corporation, a Delaware corporation
and wholly-owned subsidiary of Spelling Entertainment Group Inc. (the
"Company") merged (the "Merger") with and into Republic Pictures Corporation, a
Delaware corporation ("Republic"). As a result of the Merger, Republic became
a wholly-owned subsidiary of the Company. Republic is engaged in the
development and production of television programming and the distribution of
its extensive library of feature films and television programming.
In connection with the Merger, each share of the common stock of Republic
("Republic Common Stock") outstanding immediately prior to the effective time
of the Merger (the "Effective Time") was converted into the right to receive
$13.00, without interest. Options and warrants to acquire Republic Common Stock
outstanding immediately prior to the Effective Time were converted into the
right to receive, upon payment of the exercise price (as adjusted as set forth
below), 1.6508 shares of the Company's common stock for each share of Republic
Common Stock into which such option or warrant was exercisable immediately
prior to the Effective Time. The exercise price of such options and warrants
was adjusted by multiplying such exercise price by 0.6058.
In connection with the Merger, the Company in October 1993 issued 13,362,215
shares of its Common Stock to Blockbuster Entertainment Corporation
("Blockbuster") in exchange for 3,652,542 shares of Blockbuster's common stock
(the "Blockbuster Shares"). The Blockbuster Shares were subsequently resold,
with the Company realizing approximately $100,445,000 in proceeds. The Company
used these proceeds to prepay or redeem (i) all of the outstanding principal
amount of its 10% Senior Subordinated Notes and 12% Subordinated Debentures,
(ii) approximately $39,500,000 of bank debt and (iii) all of the Company's
outstanding preferred stock. As a result, the Company borrowed $100,000,000
under its credit agreement, dated January 31, 1994, by and between the
Company and Blockbuster and the balance of the consideration necessary to fund
the Merger came from the Company's working capital.
The press release relating to the Merger, dated April 26, 1994, is
attached hereto as Exhibit 99 and incorporated herein by reference.
ITEM 5. OTHER EVENTS
The Company hereby provides the following description of its common stock,
which description supersedes and replaces all prior descriptions of such common
stock:
All holders of common stock, $.10 par value per share, of the Company ("Common
Stock") are entitled to one vote for each share held of record on all matters
submitted to a vote of the Company's shareholders. Votes may not be cumulated
in the election of directors. Holders of Common Stock have no preemptive or
subscription rights. The Common Stock is neither redeemable nor convertible.
Holders of Common Stock are entitled to dividends when and as declared by the
Company's Board of Directors from funds legally available therefore and are
entitled, in the event of liquidation, to share ratably in all assets remaining
after payment of liabilities, subject in each instance to any preferential
rights of the holders of any outstanding preferred stock of the Company.
1
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired:
<TABLE>
<CAPTION>
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES PAGE
----
<S> <C>
Report of Independent Public Accountants 3
Report of Independent Accountants 4
Consolidated Balance Sheets as of December 31, 1993 and 1992 5
Consolidated Statements of Operations for each of the three
years ended December 31, 1993 6
Consolidated Statements of Cash Flows for each of the three
years ended December 31, 1993 7
Notes to Consolidated Financial Statements 8
</TABLE>
(b) Pro Forma Financial Information:
<TABLE>
<S> <C>
Unaudited Pro Forma Condensed Combined Financial Information 18
Unaudited Pro Forma Condensed Combined Balance Sheet
as of December 31,1993 19
Unaudited Pro Forma Condensed Combined Statement of Operations
for the year ended December 31, 1993 20
Notes to Unaudited Pro Forma Condensed Combined
Financial Information 21
</TABLE>
(c) Exhibits:
<TABLE>
<S> <C>
The Exhibits to this Report are listed in the Exhibit Index. 25
</TABLE>
2
<PAGE> 4
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Republic Pictures Corporation:
We have audited the accompanying consolidated balance sheet of Republic
Pictures Corporation, a Delaware corporation, and subsidiaries as of December
31, 1993, and the related consolidated statements of operations and cash
flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Republic Pictures Corporation
and subsidiaries as of December 31, 1993, and the results of their operations
and their cash flows for the year then ended in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN & CO.
Los Angeles, California
March 30, 1994
3
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders
and Board of Directors of
Republic Pictures Corporation:
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations and of cash flows present fairly, in all
material respects, the financial position of Republic Pictures Corporation and
its subsidiaries at December 31, 1992, and the results of their operations and
their cash flows for each of the two years in the period ended December 31,
1992, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
As discussed in Note 4 to the consolidated financial statements, the Company
changed its method of accounting for income taxes in 1992.
PRICE WATERHOUSE
Century City, California
February 26, 1993
4
<PAGE> 6
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
--------------------------------
1993 1992
----------- -----------
<S> <C> <C>
ASSETS
- ------
Cash and cash equivalents $ 2,444,000 $ 1,530,000
Receivables, net 37,788,000 21,925,000
Inventories 1,479,000 1,222,000
Film costs, net 37,511,000 32,204,000
Fixed assets at cost, net 2,753,000 893,000
Other 2,997,000 5,183,000
----------- -----------
Total assets $84,972,000 $62,957,000
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Accounts payable and accrued liabilities $18,466,000 $ 7,094,000
Participations and royalties payable 14,664,000 11,657,000
Notes payable 99,000 20,132,000
Deferred revenues 2,053,000 2,757,000
Deferred income taxes 401,000 1,740,000
----------- -----------
Total liabilities 35,683,000 43,380,000
----------- -----------
Commitments and contingencies
Shareholders' equity (Note 3):
Preferred stock, $1.00 par value; none issued - -
Common stock, $.01 par value; 7,782,564
shares issued and outstanding in 1993 78,000 -
Class A common stock, $.01 par value; 3,401,689
shares issued and outstanding in 1992 - 34,000
Class B common stock, $.01 par value; 1,227,744
shares issued and outstanding in 1992 - 12,000
Additional paid-in capital 45,332,000 17,993,000
Cumulative translation adjustment (101,000) (86,000)
Retained earnings from January 1, 1985 3,980,000 1,624,000
----------- -----------
Total shareholders' equity 49,289,000 19,577,000
----------- -----------
Total liabilities and shareholders' equity $84,972,000 $62,957,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 7
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended December 31,
---------------------------------------------
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Operating revenues:
Television $30,912,000 $25,322,000 $47,391,000
Video and theatrical 57,950,000 43,026,000 34,294,000
----------- ----------- -----------
Total operating revenues 88,862,000 68,348,000 81,685,000
----------- ----------- -----------
Operating expenses:
Television 29,061,000 25,012,000 43,663,000
Video and theatrical 50,807,000 43,812,000 32,444,000
General and administrative 4,026,000 3,695,000 3,153,000
----------- ----------- -----------
Total operating expenses 83,894,000 72,519,000 79,260,000
----------- ----------- -----------
Sale of video duplication facility - 2,089,000 -
----------- ----------- -----------
Operating income (loss) 4,968,000 (2,082,000) 2,425,000
Other income and expenses:
Interest expense, net (984,000) (1,367,000) (1,638,000)
Minority interest in television
venture (Note 6) - - 287,000
----------- ----------- -----------
Income (loss) before income taxes and
cumulative effect of a change in
accounting principles 3,984,000 (3,449,000) 1,074,000
Benefit (provision) for income taxes (1,628,000) 1,290,000 (426,000)
----------- ----------- -----------
Income (loss) before cumulative effect
of a change in accounting principles 2,356,000 (2,159,000) 648,000
Cumulative effect on prior years of a
change in accounting for income taxes - (1,354,000) -
----------- ----------- -----------
Net Income (loss) $ 2,356,000 $(3,513,000) $ 648,000
----------- ----------- -----------
Earning per common share - primary:
Earning (loss) before cumulative effect
of a change in accounting principles $ 0.38 $ (0.47) $ 0.15
Cumulative effect on prior years of a
change in accounting for income taxes - (0.30) -
----------- ----------- -----------
Earnings (loss) per common share $ 0.38 $ (0.77) $ 0.15
=========== =========== ===========
Weighted average shares outstanding 6,148,000 4,557,000 4,358,000
========= ========= =========
Earnings per common share - fully diluted:
Earnings (loss) before cumulative effect
of a change in accounting principles $ 0.37 $ (0.47) $ 0.15
Cumulative effect on prior years of a
change in accounting for income taxes - (0.30) -
----------- ----------- -----------
Earnings (loss) per common share $ 0.37 $ (0.77) $ 0.15
=========== =========== ===========
Weighted average shares outstanding 6,291,000 4,557,000 4,358,000
========= ========= =========
</TABLE>
The accompanying notes to Consolidated Financial Statements are an integral
part of these financial statements.
6
<PAGE> 8
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------------
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
Cash was provided by (used for):
Net income (loss) $ 2,356,000 $ (3,513,000) $ 648,000
Adjustments to reconcile net income (loss)
to cash provided by operating activities -
Depreciation of fixed assets 343,000 325,000 411,000
Amortization of film costs 30,812,000 21,349,000 37,534,000
Other equity adjustments (15,000) (75,000) 29,000
Sale of video duplication facility - (2,089,000) -
Deferred income taxes (1,339,000) (1,802,000) 497,000
Cumulative effect on prior years of a change
in accounting for income taxes - 1,354,000 -
Minority interest in television venture - (7,161,000) 713,000
Change in:
Receivables (15,863,000) 6,653,000 (1,401,000)
Inventories (257,000) (230,000) 122,000
Other assets 2,186,000 3,973,000 (2,543,000)
Accounts payable and accrued liabilities 11,372,000 927,000 (1,237,000)
Deferred revenues and other liabilities 2,303,000 8,239,000 (14,861,000)
------------ ------------ ------------
Cash provided by operations 31,898,000 27,950,000 19,912,000
------------ ------------ ------------
Investing activities:
Film costs 36,119,000 33,293,000 21,386,000
Fixed assets 2,203,000 205,000 204,000
Proceeds from sale of video duplication facility - (2,200,000) -
------------ ------------ ------------
38,322,000 31,298,000 21,590,000
------------ ------------ ------------
Change in cash before financing activities (6,424,000) (3,348,000) (1,678,000)
------------ ------------ ------------
Financing activities:
Issuance of common stock 27,371,000 3,298,000 185,000
Issuance of notes payable 11,250,000 14,500,000 18,500,000
Repayment of notes payable (31,283,000) (13,161,000) (17,175,000)
------------ ------------ ------------
7,338,000 4,637,000 1,510,000
------------ ------------ ------------
Change in cash and cash equivalents 914,000 1,289,000 (168,000)
Cash and cash equivalents at beginning of year 1,530,000 241,000 409,000
------------ ------------ ------------
Cash and cash equivalents at end of year $ 2,444,000 $ 1,530,000 $ 241,000
============ ============ ============
</TABLE>
The accompanying notes to Consolidated Financial Statements are an integral
part of these financial statements.
7
<PAGE> 9
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - Significant Accounting Policies:
Basis of presentation: The consolidated financial statements include the
accounts of Republic Pictures Corporation, a Delaware corporation, and its
subsidiaries (collectively, the "Company"), after elimination of intercompany
balances and transactions. These financial statements present the Company's
historical financial results and other information on an independent, going
concern basis, and do not give effect to the Company's pending merger with
Spelling Entertainment Group Inc. ("Spelling") (see Note 3).
Revenues and participations: Television and international video and theatrical
license agreements are recognized when the license agreement is accepted, the
film is available to the licensee and collectibility of the license fee is
reasonably assured. Sales of videocassettes are recognized upon shipment, less
an allowance for estimated returns. Participation expenses, if applicable, are
recognized concurrently with the related revenue.
Film costs: Film costs include production, acquisition and certain film
servicing costs. These costs are stated at the lower of cost or net realizable
value. Approximately $32,151,000 of the Company's net film costs at December
31, 1993 related to acquisition or production costs being amortized using the
individual film forecast method, whereby costs are expensed in the proportion
that gross revenues bear to management's estimate of ultimate aggregate
revenues. Additional net film costs of $5,360,000, related principally to
older product, are amortized using the straight-line basis generally over a
10-year period, which in management's opinion should not differ materially from
the individual film forecast method. Accumulated film cost amortization at
December 31, 1993 and 1992 was $159,927,000 and $129,115,000, respectively.
Based upon the Company's estimates of revenue as of December 31, 1993,
approximately 60% of unamortized film costs will be amortized during the
three-year period ending December 31, 1996.
Inventories: Inventories, substantially consisting of finished goods, include
blank and completed videocassettes. Inventories are stated at the lower of
cost or net realizable value.
Fixed assets: Fixed assets are depreciated using the straight-line basis over
the estimated useful asset lives, generally within five years.
Income taxes: Income taxes in 1991 were provided for earnings at the
appropriate statutory rates. Deferred income taxes are established for revenue
and expense items recognized in different periods for financial reporting
purposes than for income tax purposes.
Cumulative effect on prior years of a change in accounting principles:
Effective January 1992 the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting For Income Taxes," ("SFAS 109"). The adoption of
SFAS 109 changed the Company's method of
8
<PAGE> 10
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 1 - Significant Accounting Policies (continued):
accounting for income taxes from the deferred method to an asset and liability
approach. Previously, the Company deferred the tax effect of timing differences
between financial reporting and taxable income. On the other hand, the asset
and liability approach requires the recognition of deferred tax liabilities and
assets for the expected future tax consequences of temporary differences
between the carrying amounts for financial reporting purposes and the tax bases
of other assets and liabilities.
Earnings per common share: Earnings per share are computed by dividing net
income (loss) available to common shareholders by the weighted average number
of common shares and dilutive common share equivalents (stock options and
warrants) outstanding.
NOTE 2 - Notes Payable:
As of July 15, 1991, the Company entered into a three-year, $50 million
revolving credit facility (the "Agreement") with a consortium of commercial
banks, including Chemical Bank serving as agent. At the Company's election,
outstanding borrowings bear an interest rate of LIBOR plus 1 3/4% or the prime
rate plus 3/4%. The facility also bears a commitment fee at an annual rate of
3/8% on unused funds. Availability under the facility is determined using a
borrowing base, which includes eligible accounts receivables and certain other
assets. As of December 31, 1993, total availability was $50,000,000 and there
were no outstanding borrowings. Borrowings under the Agreement are secured by
film costs, inventories, receivables and other assets. Pursuant to the
Agreement, the Company is required to obtain the bank group's consent prior to
entering into certain significant transactions, and restrictions are placed on
the Company's ability to declare dividends. The Agreement contains certain
covenants regarding net worth, retained earnings, general and administrative
expenses and the ratio of total liabilities to net worth, all of which the
Company is satisfying.
Notes payable consisted of the following at December 31, 1993 and 1992:
<TABLE>
<CAPTION>
1993 1992
------- -----------
<S> <C> <C>
Revolving credit facility payable to Chemical Bank, as agent,
bearing a weighted average interest rate of 5.3% in 1992. $ - $20,000,000
Note payable to bank, secured by real property, bearing
interest at rates ranging from 8.75% to 10%, payable
through 1996. 99,000 132,000
------- -----------
$99,000 $20,132,000
======= ===========
</TABLE>
9
<PAGE> 11
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 2 - Notes Payable (continued):
Interest paid, net of amounts capitalized, for all debt in 1993, 1992 and 1991,
amounted to $658,000, $1,135,000 and $1,657,000, respectively.
Inasmuch as the Company expects to complete its merger with Spelling in April
1994 (see Note 3), there are no plans to renew or extend the Agreement, which
is scheduled to expire on June 30, 1994.
NOTE 3 - Shareholders' Equity:
In January 1993 the Company and Blockbuster Entertainment Corporation
("Blockbuster") entered into an agreement (the "Agreement"), pursuant to which
in February 1993 an indirect wholly-owned subsidiary of Blockbuster acquired
from the Company 2,500,000 shares of newly issued Class A Common Stock for
$10.00 per share. Pursuant to the Agreement, the $25,000,000 proceeds from the
stock issuance were placed in an escrow account until shareholder approval of a
recapitalization of the Company's Common Stock, which occurred on July 27,
1993.
The recapitalization, for which $562,000 in costs were incurred, involved the
establishment of a new, single class of Common Stock ("New Common Stock"), of
which one share and 1.2 shares were issued in exchange for each existing share
of Class A Common Stock and Class B Common Stock, respectively. Holders of the
old Class A and Class B Common Stock had been entitled to one vote and ten
votes per share, respectively. A total of 15,000,000 shares of the New Common
Stock are authorized for issuance. The Company also has authorized the issuance
of 1,000,000 shares of Preferred Stock, of which none have been issued. A
summary of activity in shareholders' equity appears below (dollar amounts in
thousands):
10
<PAGE> 12
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 3 - Shareholders' Equity (continued):
<TABLE>
<CAPTION>
Common Stock
---------------------------------------------
Class A/New Common* Class B Additional Cumulative
--------------------- --------------------- Paid-In Translation Retained
Shares Par Value Shares Par Value Capital Adjustment Earnings
--------- --------- --------- --------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1990 3,051,991 $30 1,281,025 $13 $14,488 $ (15) $4,489
Exercise of stock options 31,330 1 184
Net income 648
Conversions and repurchases 30,487 (30,487)
Other 25 4
--------- --- ---------- --- ------- ----- ------
Balance at
December 31, 1991 3,113,808 31 1,250,538 13 14,697 (11) 5,137
Issuance of common stock 200,000 2 2,998
Exercise of stock options 64,315 1 298
Net loss (3,513)
Conversion and repurchases 23,566 (22,794) (1)
Other (75)
--------- --- ---------- --- ------- ----- ------
Balance at
December 31, 1992 3,401,689 34 1,227,744 12 17,993 (86) 1,624
Issuance of common stock 2,500,000 25 24,975
Exercise of stock options 475,540 5 2,927
Recapitalization 1,402,800 14 (1,169,000) (12) (562)
Net income 2,356
Conversions and repurchases 2,535 (58,744) (1)
Other (15)
--------- --- ---------- --- ------- ----- ------
Balance at
December 31, 1993 7,782,564 $78 - $ - $45,332 $(101) $3,980
========= === ========== === ======= ===== ======
</TABLE>
*This column represents the New Common Stock after July 27, 1993.
The Company and Spelling entered into an Agreement and Plan of Merger (the
"Merger Agreement") dated December 8, 1993, which agreement had satisfied all
meaningful contingencies as of March 25, 1994, except for the approval by a
vote of the Company's shareholders, which is scheduled for April 26, 1994. If
the Company's shareholders approve the Merger Agreement, Spelling will promptly
acquire all of the Company's issued and outstanding stock for $13 cash per
share, and all of the Company's issued and outstanding Common Stock options and
warrants will be converted into similar securities of Spelling, subject to a
decrease in the respective exercise price using a factor of .6058 and an
increase in the respective number of shares using a factor of 1.6508.
11
<PAGE> 13
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 3 - Shareholders' Equity (continued):
Stock options and warrants
The Company adopted incentive stock option plans (the "Plans") in 1985 and
1987, as amended, pursuant to which an aggregate of 1,150,000 shares of Common
Stock have been reserved for issuance. Activity in the Plans during 1993 was
as follows:
<TABLE>
<CAPTION>
Options Exercise Prices
-------- ---------------
<S> <C> <C>
Outstanding at December 31, 1992 380,993 $4.88-$11.75
Granted in 1993 231,680 $9.25-$13.00
Exercised in 1993 (220,540) $4.88-$11.50
Cancelled or expired in 1993 (25,133) $6.00-$ 9.88
--------
Outstanding at December 31, 1993 367,000 $6.00-$13.00
========
</TABLE>
These options vest within no more than three years and are exercisable at the
market price of the stock at the date of grant. As of December 31, 1993,
189,311 of the 367,000 options outstanding were fully vested, at a weighted
average exercise price of $8.44 per share.
During 1993, there were a total of 255,000 shares of Common Stock issued upon
the exercise of stock options which had been granted outside of the Plans, at
exercise prices of $5.00 - $6.00 per share. As of December 31, 1993, there
were remaining options outside of the Plans, all fully vested, to acquire
50,000 shares of Common Stock at $9.13 per share.
The Company has issued three Common Stock purchase warrants, each of which
expires in February 1998. Two of the warrants were acquired by Blockbuster,
which may purchase an aggregate of 810,000 shares at $11.50 per share. The
third warrant, owned by a limited partnership of which the Company's Chairman
and Chief Executive Officer is the general partner, provides for the
acquisition of 500,000 shares at $12.50 per share.
NOTE 4 - Income Taxes:
As discussed in Note 1, the Company adopted SFAS No. 109, "Accounting for
Income Taxes," as of January 1, 1992. Financial statements for 1991 have not
been restated for this accounting change and the cumulative effect on prior
years, in the amount of $1,354,000, has been reflected in the 1992 Statement of
Operations.
12
<PAGE> 14
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 4 - Income Taxes (continued):
The income (loss) from continuing operations before income taxes and the
cumulative effect of a change in accounting principles consisted of:
<TABLE>
<CAPTION>
1993 1992 1991
---------- ----------- ----------
<S> <C> <C> <C>
Domestic $4,068,000 $(3,590,000) $1,528,000
Foreign (84,000) 141,000 (454,000)
---------- ----------- ----------
$3,984,000 $(3,449,000) $1,074,000
========== =========== ==========
</TABLE>
The following is a reconciliation of the statutory Federal income tax rate to
the Company's effective income tax rate:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Statutory Federal income tax rate 34.0% 34.0% 34.0%
State tax, net of Federal benefit 3.8 5.8 6.1
Foreign tax expense (benefit) .1 .2 (1.4)
Other, net 3.0 (2.6) 1.0
---- ---- ----
40.9% 37.4% 39.7%
==== ==== ====
</TABLE>
The income tax provision (benefit) consisted of:
<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- ----------
<S> <C> <C> <C>
Current:
Federal $ 3,827,000 $ 675,000 $ 25,000
State 919,000 249,000 109,000
Foreign (247,000) 136,000 (205,000)
----------- ----------- ---------
4,499,000 1,060,000 (71,000)
----------- ----------- ---------
Deferred:
Federal (860,000) (1,179,000) 450,000
State (688,000) (551,000) 47,000
Foreign 209,000 (72,000) -
----------- ----------- ---------
(1,339,000) (1,802,000) 497,000
----------- ----------- ---------
Provision (benefit)
before net
operating loss 3,160,000 (742,000) 426,000
Federal net
operating loss
carryforward (1,532,000) (548,000) -
----------- ----------- ---------
Total provision
(benefit) $ 1,628,000 $(1,290,000) $ 426,000
=========== =========== =========
</TABLE>
13
<PAGE> 15
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 4 - Income Taxes (continued):
Income taxes paid in 1993, 1992 and 1991 amounted to $177,000, $87,000 and
$93,000, respectively.
Deferred tax liabilities (assets) were comprised of the following at December
31, 1993 and 1992:
<TABLE>
<CAPTION>
1993 1992
----------- -----------
<S> <C> <C>
Timing of revenue recognition $ 382,000 $2,010,000
Basis difference in other assets 1,850,000 1,966,000
Film costs amortization (601,000) 277,000
----------- -----------
Gross deferred tax liabilities 1,631,000 4,253,000
----------- -----------
Loss carryforwards (348,000) (2,098,000)
Other (882,000) (415,000)
----------- -----------
Gross deferred tax assets (1,230,000) (2,513,000)
----------- -----------
Net deferred tax liability $ 401,000 $ 1,740,000
=========== ===========
</TABLE>
At December 31, 1993, the Company had net operating loss carryforwards of
$1,024,000 for Federal income tax return purposes which will expire in the
years 2004 - 2005. The utilization of these net operating loss carryforwards
may be subject to limitations.
NOTE 5 - Detail of Certain Balance Sheet Accounts:
<TABLE>
<CAPTION>
December 31,
-------------------------------
1993 1992
----------- -----------
<S> <C> <C>
Receivables, net:
Television license fees 26,126,000 19,771,000
Video and theatrical 18,839,000 8,025,000
----------- -----------
44,965,000 27,796,000
Less: allowances for bad debts and returns (4,813,000) (4,132,000)
unamortized discounts (2,364,000) (1,739,000)
----------- -----------
$37,788,000 $21,925,000
=========== ===========
Fixed assets at cost, net:
Buildings and improvements $ 2,070,000 $ 549,000
Furniture and equipment 2,734,000 2,052,000
----------- -----------
4,804,000 2,601,000
Less: accumulated depreciation (2,051,000) (1,708,000)
----------- -----------
$ 2,753,000 $ 893,000
=========== ===========
Other assets:
Recoupable advances $ - $ 1,222,000
Prepaid expenses 2,039,000 1,615,000
Other 958,000 2,346,000
----------- -----------
$ 2,997,000 $ 5,183,000
=========== ===========
</TABLE>
14
<PAGE> 16
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 5 - Detail of Certain Balance Sheet Accounts (Continued):
<TABLE>
<S> <C> <C>
Accounts payable and accrued liabilities:
Accounts payable $14,357,000 $5,744,000
Accrued payroll and other compensation 616,000 642,000
Income taxes payable 3,383,000 586,000
Other 110,000 122,000
----------- ----------
$18,466,000 $7,094,000
=========== ==========
</TABLE>
As of December 31, 1993, the Company's future commitments for the acquisition
of copyrights or distribution rights amounted to approximately $8,675,000, most
of which involved product not yet received by the Company as of that date.
NOTE 6 - Consolidated Television Venture:
In January 1989 the Company and United Artists Entertainment Company ("UAE"),
now a wholly owned subsidiary of Tele-Communications, Inc. ("TCI"), formed a
joint venture, Republic Pictures Television ("RPT"), to finance substantially
all of the Company's television development and production activities through
1993. The Chairman of TCI is a Director of the Company. In 1992 the Company
entered into an agreement in principle with TCI to amend their joint venture
agreement, whereby the Company will purchase TCI's interest in RPT by June 30,
1996, at a price and on terms to be negotiated, which will be affected by the
venture's current and projected future operating results. As of January 1,
1992, TCI was relieved of its cash funding obligations to RPT, in exchange for
which the Company received priority recoupment of its additional investment and
accelerated recoupment of certain previously deferred fees.
The Company's consolidated financial statements include RPT. Beginning in 1992
TCI's share of the joint venture has been reclassified in the Company's
Statement of Operations from minority interest to television operating results.
For the years ended December 31, 1993, 1992 and 1991, RPT's operating revenues
were $11,297,000, $11,515,000 and $26,123,000, respectively, and its operating
losses were $2,231,000, $5,838,000 and $574,000, respectively. As of December
31, 1993 and 1992, RPT's total assets were $18,146,000 and $18,028,000,
respectively. Total assets at December 31, 1993 included $4,918,000 in film
costs, of which $774,000 are recoupable, nonrefundable advances to writers and
producers which are allocable to projects which may arise within the respective
contractual terms.
15
<PAGE> 17
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 6 - Consolidated Television Venture (Continued):
As of December 31, 1993, RPT's future commitments to writers and producers
under contract amounted to $713,000. The Company leases offices on behalf of
RPT under a 5-year agreement which commenced in May 1990. The lease provides
for lease payments of $484,000 and $163,000, respectively, for the years
ending December 31, 1994 and 1995. Pursuant to the terms of the lease
agreement, the Company is responsible for all maintenance, insurance and
property taxes.
NOTE 7 - Business Segments:
The Company operates principally in two business segments: the distribution to
domestic and international television broadcasters of theatrical and television
programming, some of which is produced by the Company, and the sale in North
America of videocassettes or the licensing to international licensees of video
and theatrical rights. The consolidated statement of operations presents
revenues and expenses by business segment. Additional financial information
relative to business segments follows.
<TABLE>
<CAPTION>
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Fixed asset expenditures:
Television $ 5,000 $ 9,000 $ 10,000
Video and theatrical 269,000 13,000 110,000
Corporate and other 1,929,000 183,000 84,000
----------- ----------- -----------
$ 2,203,000 $ 205,000 $ 204,000
=========== =========== ===========
Depreciation:
Television $ 110,000 $ 132,000 $ 103,000
Video and theatrical 37,000 21,000 150,000
Corporate and other 196,000 172,000 158,000
----------- ----------- -----------
$ 343,000 $ 325,000 $ 411,000
=========== =========== ===========
Identifiable assets:
Television $45,555,000 $42,417,000 $39,688,000
Video and theatrical 34,272,000 17,723,000 18,870,000
Corporate and other 5,145,000 2,817,000 1,793,000
----------- ----------- -----------
$84,972,000 $62,957,000 $60,351,000
=========== =========== ===========
</TABLE>
The Company's 1993, 1992 and 1991 consolidated revenues included $9,279,000,
$8,811,000 and $11,244,000, respectively, from international customers,
primarily related to television distribution and arising from various licensees
in Canada, France, Italy, Germany, Japan, Australia and many other countries.
During the period 1991-1993, the only category of customers which accounted for
10% or more of annual consolidated revenues were the U.S. commercial cable
television networks, with an aggregate of $19,509,000, $12,359,000 and
$26,292,000, respectively.
16
<PAGE> 18
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
NOTE 8 - Quarterly Information (Unaudited):
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------------------------------------
1993 March 31, June 30, September 30, December 31,
- ---- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Revenues:
Television $ 6,140,000 $ 8,931,000 $ 9,772,000 $ 6,069,000
Video and theatrical 8,522,000 13,755,000 14,368,000 21,305,000
----------- ----------- ----------- -----------
$14,662,000 $22,686,000 $24,140,000 $27,374,000
=========== =========== =========== ===========
Operating income (loss):
Television $ 316,000 1,473,000 1,028,000 (966,000)
Video and theatrical 1,242,000 161,000 1,171,000 4,569,000
----------- ----------- ----------- -----------
$ 1,558,000 $ 1,634,000 $ 2,199,000 $ 3,603,000
=========== =========== =========== ===========
Income before income taxes $ 274,000 $ 434,000 $ 1,188,000 $ 2,088,000
Net income 156,000 255,000 713,000 1,232,000
Earnings per common share - primary $ 0.03 $ 0.05 $ 0.10 $ 0.16
Earnings per common share - fully diluted 0.03 0.04 0.10 0.16
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------------------------------------
1992 March 31, June 30, September 30, December 31,
- ---- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Revenues:
Television $ 3,786,000 $ 9,301,000 $ 7,933,000 $ 4,302,000
Video and threatrical 10,241,000 12,723,000 11,718,000 8,344,000
----------- ----------- ----------- -----------
$14,027,000 $22,024,000 $19,651,000 $12,646,000
=========== =========== =========== ===========
Operating income (loss):
Television $ (660,000) $ (526,000) $ 625,000 $ 871,000
Video and theatrical 540,000 1,775,000 855,000 (3,956,000)
----------- ----------- ----------- -----------
$ (120,000) $ 1,249,000 $ 1,480,000 $(3,085,000)
=========== =========== =========== ===========
Income (loss) before income taxes
and cumulative effect of a change
in accounting principles $ 814,000 $ (243,000) $ 266,000 $(4,286,000)
Income (loss) before cumulative
effect of a change in accounting
principles 503,000 (150,000) 160,000 (2,672,000)
Net income (loss) (851,000) (150,000) 160,000 (2,672,000)
Earnings per common share:
Earnings (loss) before cumulative
effect of a change in accounting
principles $ 0.11 $ (0.03) $ 0.04 $ (0.58)
Earnings (loss) per common share (0.19) (0.03) 0.04 (0.58)
</TABLE>
17
<PAGE> 19
SPELLING ENTERTAINMENT GROUP INC. AND SUBSIDIARIES
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
The following Unaudited Pro Forma Condensed Combined Balance Sheet and
Statement Of Operations assume (i) the acquisition by the Company of 100% of
the outstanding shares of common stock of Republic and (ii) the issuance of
13,362,215 shares of the Company's Common Stock, which occurred on October 5,
1993 but was negotiated in connection with (and in order to fund) the Company's
then proposed Merger with Republic. This information has been prepared on the
basis of and utilizing the historical and pro forma financial information
described in the accompanying Notes to Unaudited Pro Forma Condensed
Combined Financial Information ("Notes"). This information should be read in
conjunction with the historical financial statements of the Company and
Republic and related Notes thereto.
The accompanying pro forma financial information with respect to Republic
is preliminary in nature, because the Company does not yet have final
information as to the fair market value of Republic's individual assets and
liabilities or the effect of the consolidation of the operations of the Company
and Republic. The actual adjustments to the accounts of Republic will be made
on the basis of the Company's appraisals and internal valuations as of the
consummation of the acquisition of Republic, and, therefore, the pro forma
information does not give effect to all adjustments which may ultimately be
required to reflect the fair value of the assets acquired, liabilities assumed
or the effect of the consolidation of operations.
The Unaudited Pro Forma Condensed Combined Balance Sheet assumes that the
Company acquired Republic on December 31, 1993 and adjusted its historical
balance sheet as of that date to reflect the pro forma effects of the
Merger under the purchase method of accounting and the financing of this
transaction. The Unaudited Pro Forma Condensed Combined Statement of
Operations for the year ended December 31, 1993 assumes that the Company
acquired Republic on January 1, 1993 and adjusted its historical statement of
operations to reflect the Merger under the purchase method of accounting, and
the effects of the issuance of the Company's Common Stock and the
financing of the Merger.
This pro forma financial information is not intended to reflect the results of
operations or the financial position which would have actually resulted had the
Merger been effective on the dates indicated. Moreover, this pro forma
information is not intended to be indicative of the results of operations or
the financial position which may be obtained in the future.
18
<PAGE> 20
SPELLING ENTERTAINMENT GROUP INC. AND SUBSIDIARIES
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
DECEMBER 31, 1993
(In thousands)
<TABLE>
<CAPTION>
THE PRO FORMA PRO FORMA
COMPANY REPUBLIC ADJUSTMENTS COMBINED
-------- -------- ----------- --------
<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents $ 12,682 $ 2,444 $ (3,154)(4a) $ 11,972
Accounts receivable, net 93,242 37,788 - 131,030
Film and television costs, net 204,232 37,511 - (4b) 241,743
Property, plant and equipment, net 4,770 2,753 1,000 (4c) 8,523
Other assets 4,562 4,476 (700)(4d) 8,338
Intangible assets, net 154,983 - 48,340 (4e) 203,323
-------- ------- -------- --------
$474,471 $84,972 $ 45,486 $604,929
======== ======= ======== ========
Liabilities and Shareholders' Equity:
Accounts payable, accrued expenses and other liabilities $ 13,275 $15,083 $ 3,500 (4f) $ 31,858
Accrued participation expense 57,547 14,664 - 72,211
Deferred revenue 14,425 2,053 - 16,478
Bank and other debt 49,580 99 100,000 (4g) 149,679
Income taxes 8,121 3,784 (1,075)(4h) 10,830
Net liabilities related to discontinued operations 33,669 - - 33,669
-------- ------- -------- --------
Total Liabilities 176,617 35,683 102,425 314,725
-------- ------- -------- --------
Commitments and contingent liabilities
Shareholders' Equity:
Common Stock 6,450 78 (78)(4i) 6,450
Capital in excess of par value 342,824 45,332 (45,332)(4i) 335,174
(7,650)(4e)
Accumulated earnings (deficit) (51,420) 3,879 (3,879)(4i) (51,420)
-------- ------- -------- --------
Total Shareholders' Equity 297,854 49,289 (56,939) 290,204
-------- ------- -------- --------
$474,471 $84,972 $ 45,486 $604,929
======== ======= ======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
19
<PAGE> 21
SPELLING ENTERTAINMENT GROUP INC. AND SUBSIDIARIES
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
(In thousands, except per share data)
<TABLE>
<CAPTION>
THE PRO FORMA PRO FORMA
COMPANY REPUBLIC ADJUSTMENTS COMBINED
-------- -------- ----------- --------
<S> <C> <C> <C> <C>
Continuing Operations:
Revenue $274,899 $ 88,862 $ - $363,761
Costs and Expenses:
Film and television costs 201,449 79,868 - (5a) 281,317
- (5b)
Selling, general and administrative 33,723 4,026 1,200 (5a) 38,449
- (5b)
(500)(5c)
-------- -------- ------- --------
235,172 83,894 700 319,766
-------- -------- ------- --------
Operating Income 39,727 4,968 (700) 43,995
Interest income (expense), net (3,064) (984) (6,625)(5d) (3,485)
7,188 (5e)
Miscellaneous, net 52 - - 52
-------- -------- ------- --------
Income from continuing operations
before income taxes 36,715 3,984 (137) 40,562
Provision for income taxes (13,056) (1,628) (457)(5f) (15,141)
-------- -------- ------- --------
Net income from continuing operations 23,659 2,356 (594) 25,421
Preferred dividend 724 - (724)(5e) -
Net income applicable to Common Stock $ 22,935 $ 2,356 $ 130 $ 25,421
======== ======== ======= ========
Average number of Common Shares 54,253 10,096 (5g) 64,349
======== ======= ========
Net income per Common Share from
Continuing operations $ 0.42 $ 0.40
======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
20
<PAGE> 22
SPELLING ENTERTAINMENT GROUP INC. AND SUBSIDIARIES
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
(UNAUDITED)
NOTE 1 - THE MERGER
As a result of the Merger, the Company acquired 100% of the outstanding shares
of the common stock of Republic for $13 per share in cash. The total purchase
price is summarized as follow (in thousands):
<TABLE>
<S> <C>
Net cash at $13.00 per share
Common Stock (7,796,458 shares) $101,354
Other costs 1,800
--------
Total cash consideration $103,154
========
</TABLE>
NOTE 2 - BASIS OF PRESENTATION
The unaudited pro forma condensed combined financial information is based on
historical financial statements of the Company and Republic, adjusted in the
case of Republic to reflect the purchase method of accounting.
NOTE 3 - ALLOCATIONS OF PURCHASE PRICE FOR REPUBLIC
The aggregate purchase price paid for the shares of Republic by the Company
exceeded the historical book value of the identifiable net assets of Republic
by $53,865,000. For purposes of the pro forma presentation, on the basis of
the Company's current estimates of fair values, the carrying values of the
Company's real estate and certain liabilities has been increased, together with
the related income tax effect. Of the total shares acquired, 2,550,000 shares
were owned by Blockbuster; accordingly, the Company has accounted for such
shares at Blockbuster's carrying value. The excess of the cash consideration
paid to Blockbuster over such carrying value has been recorded as a charge
($7,650) to the Company's capital in excess of par value. The remainder of the
purchase price after such allocations is reflected as cost in excess of fair
value of net assets acquired.
NOTE 4 - ADJUSTMENTS TO HISTORICAL BALANCE SHEET
Preliminary adjustments to the Unaudited Pro Forma Condensed Combined Balance
Sheet are as follows (in thousands):
(a) To reflect changes in cash due to payment of costs related to
the Merger.
(b) The fair value of Republic's film and television costs are
currently being evaluated.
21
<PAGE> 23
SPELLING ENTERTAINMENT GROUP INC. AND SUBSIDIARIES
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
(UNAUDITED)
(c) To increase the book value of Republic's real estate to
estimated fair value of $2,500.
(d) To eliminate deferred merger costs.
(e) To record excess of purchase price over the fair value of net
assets acquired, net of an adjustment of $7,650 to reflect
the excess of the cash consideration paid for Blockbuster's
ownership interest in Republic over Blockbuster's carrying
value for such interest.
(f) To record estimated severance and other costs related to
certain employees expected to be terminated as a result of
the Merger.
(g) To record funds borrowed under the Blockbuster credit facility
to fund the cash payments to the shareholders of Republic.
(h) To record the income tax effect of book/tax basis differences
related to the above purchase adjustments.
(i) To eliminate Republic's historical equity accounts.
NOTE 5 - ADJUSTMENTS TO HISTORICAL STATEMENT OF OPERATIONS
Preliminary adjustments to the Unaudited Pro Forma Condensed Combined
Statement of Operations are as follows:
(a) Since the fair values of the film and television costs are
currently being evaluated, no amortization effect can be
computed for such assets. Amortization of the excess of cost
over fair value of net assets acquired has been computed
using an estimated life of forty years.
(b) The Company is currently evaluating the potential
opportunities for reducing costs which may result from the
consolidation of the operations of the Company and Republic.
(c) To eliminate merger costs which had been expensed.
(d) To reflect interest costs related to the debt financing under
the Blockbuster credit facility.
22
<PAGE> 24
SPELLING ENTERTAINMENT GROUP INC. AND SUBSIDIARIES
REPUBLIC PICTURES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
(UNAUDITED)
(e) To reflect the reduction in interest costs and dividends
resulting from the redemption and repayment of bank and other
debt and Preferred Stock as of January 1, 1993 with the
proceeds from the issuance of Common Stock, such reductions
being limited to the extent of actual interest expense and
dividends paid for the year ended December 31, 1993.
(f) A tax provision has been computed on the pro forma adjustments
using a marginal tax rate of 43%.
(g) To reflect the effect of the issuance of the 13,362,215 shares
of Common Stock as of January 1, 1993.
NOTE 6 - EXTRAORDINARY ITEMS AND DISCONTINUED OPERATIONS
The unaudited Pro Forma Condensed Combined Statement of Operations does not
reflect the extraordinary items or discontinued operations reflected in the
historical financial statements of the Company.
NOTE 7 - NET INCOME PER COMMON SHARE
Net income per common share amounts are based on the pro forma weighted average
number of common shares outstanding during the year ended December 31, 1993.
Pro forma primary and fully-diluted net income per common share are not
presented as they result in a dilution of less than 3% from basic net income
per common share.
23
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused the report to be signed on its behalf by the
undersigned hereunto duly authorized.
SPELLING ENTERTAINMENT GROUP INC.
Date: May 9, 1994 By: /s/ Thomas P. Carson
---------------------------------
Thomas P. Carson
Senior Vice President, Chief Financial Officer
and Treasurer
24
<PAGE> 26
SPELLING ENTERTAINMENT GROUP INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number and
Description of Exhibit
- ----------------------
<S> <C>
1. None
2. None
4. None
16. None
17. None
20. None
23.1 Consent of Arthur Andersen & Co.
23.2 Consent of Price Waterhouse
24. None
27. None
99. Press Release dated April 26, 1994.
</TABLE>
25
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
(dated March 30, 1994) included in this Form 8-K relating to the consolidated
financial statements of Republic Pictures Corporation and subsidiaries as of
and for the year ended December 31, 1993. We also consent to the incorporation
by reference of our report (dated March 30, 1994), included in this Form 8-K
relating to the consolidated financial statements of Republic Pictures
Corporation and subsidiaries as of and for the year ended December 31, 1993,
into the previously filed Registration Statements on Form S-8 (Registration
Nos. 33-24650, 33-61914 and 33-53291) of Spelling Entertainment Group Inc.
We also consent to the incorporation by reference of our report (dated
February 1, 1994), included in Spelling Entertainment Group Inc.'s Form 10-K
for the year ended December 31, 1993, into the previously filed Form S-8
Registration No. 33-24650.
ARTHUR ANDERSEN & CO.
Los Angeles, California
May 5, 1994
26
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Registration Nos. 33-24650, 33-61914 and 33-53291) of
Spelling Entertainment Group Inc. of our report dated February 26, 1993
relating to the consolidated financial statements of Republic Pictures
Corporation which appears in the Current Report on Form 8-K of Spelling
Entertainment Group Inc. dated April 26, 1994.
Price Waterhouse
Los Angeles, California
May 5, 1994
27
<PAGE> 1
Exhibit 99
SPELLING ENTERTAINMENT AND REPUBLIC PICTURES
COMPLETE MERGER
LOS ANGELES, CA, April 26, 1994 - Spelling Entertainment Group Inc.
(NYSE:SP) and Republic Pictures Corporation (NASDAQ:RPIC) announced today that
they have completed the merger of Republic with Spelling.
28
