SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 25, 1998
0-14871
(Commission File Number)
ML MEDIA PARTNERS, L.P.
(Exact name of registrant as specified in its governing instruments)
Delaware
(State or other jurisdiction of organization)
13-3321085
(IRS Employer Identification No.)
World Financial Center
South Tower - 14th Floor
New York, New York 10080-6114
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 236-6577
N/A
Former name, former address and former fiscal year if changed since last report
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
<PAGE>
ML MEDIA PARTNERS, L.P.
PART I - FINANCIAL INFORMATION.
Item 1. Financial Statements.
TABLE OF CONTENTS
Consolidated Balance Sheets
as of September 25, 1998 (Unaudited) and December 26, 1997 (Unaudited)
Consolidated Income Statements for the Thirteen and Thirty-Nine Week Periods
Ended September 25, 1998 (Unaudited) and September 26, 1997 (Unaudited)
Consolidated Statements of Cash Flows for the Thirty-Nine Week Periods Ended
September 25, 1998 (Unaudited) and September 26, 1997 (Unaudited)
Notes to Consolidated Financial Statements for the Thirty-Nine Week Period Ended
September 25, 1998 (Unaudited)
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 25, 1998 (UNAUDITED) AND DECEMBER 26, 1997 (UNAUDITED)
<S> <C> <C>
September 25, December 26,
1998 1997
--------------- ----------------
ASSETS:
Cash and cash equivalents $ 109,650,993 $ 92,872,891
Investments held by escrow agents 362,520 --
Accounts receivable (net of allowance for doubtful
accounts of $447,574 and $328,702, respectively)
5,913,130 5,550,419
Prepaid expenses and deferred charges (net of
accumulated amortization of $3,453,607 and
$3,640,331, respectively)
396,974 1,355,810
Property, plant and equipment (net of accumulated
depreciation of $15,076,824 and $14,952,837,
respectively)
25,039,445 23,564,815
Intangible assets (net of accumulated amortization
of $36,549,320 and $57,351,125, respectively)
17,229,671 28,492,491
Assets held for sale 9,627,783 2,906,500
Other assets 232,203 1,903,252
------------- ---------------
TOTAL ASSETS $ 168,452,719 $ 156,646,178
============== ===============
</TABLE>
(Continued on the following page.)
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 25, 1998 (UNAUDITED) AND DECEMBER 26, 1997 (UNAUDITED)
(continued)
<S> <C> <C>
September 25, December 26,
1998 1997
-------------- --------------
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities:
Borrowings $ 52,493,137 $ 54,244,038
Accounts payable and accrued liabilities 23,829,131 22,252,266
Subscriber advance payments 1,521,152 1,512,748
------------- ------------
Total Liabilities 77,843,420 78,009,052
------------- ------------
Commitments and Contingencies (Notes 2 and 3)
Partners' Capital:
General Partner:
Capital contributions, net of offering expenses
1,708,299 1,708,299
Cumulative cash distributions (1,357,734) (1,357,734)
Cumulative income 618,446 498,724
------------- ------------
969,011 849,289
------------- ------------
Limited Partners:
Capital contributions, net of offering expenses
(187,994 Units of Limited Partnership Interest)
169,121,150 169,121,150
Tax allowance cash distribution
(6,291,459) (6,291,459)
Cumulative cash distributions (134,415,710) (134,415,710)
Cumulative income 61,226,307 49,373,856
------------- ------------
89,640,288 77,787,837
------------- ------------
Total Partners' Capital 90,609,299 78,637,126
------------- ------------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 168,452,719 $156,646,178
============= ============
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited).
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA PARTNERS, L.P.
CONSOLIDATED INCOME STATEMENTS
FOR THE THIRTEEN AND THIRTY-NINE WEEK PERIODS ENDED SEPTEMBER 25, 1998
(UNAUDITED) AND SEPTEMBER 26, 1997 (UNAUDITED)
<S> <C> <C> <C> <C>
Thirteen Weeks Thirty-Nine Weeks
September 25, September 26, September 25, September 26,
- ------------------------------ ------------ ------------ ------------ ------------
REVENUES:
Operating revenues
$ 13,899,489 $ 13,736,202 $ 41,040,559 $ 39,536,466
Interest 653,126 853,477 2,167,112 2,511,836
Gain on sale
of C-ML Radio (76,571) -- 2,765,607 --
Gain on sale of WREX -- 1,844,358 -- 1,844,358
Gain on sale of KATC -- 1,479,522 -- 1,479,522
------------ ------------ ------------ ------------
Total revenues 14,476,044 17,913,559 45,973,278 45,372,182
COSTS AND EXPENSES:
Property operating 4,461,655 4,917,882 13,727,244 14,430,095
General and administrative 3,363,736 2,718,120 10,031,828 7,273,477
Depreciation and
amortization 1,801,491 1,771,150 5,520,799 5,334,222
Interest expense 1,249,382 1,277,438 3,812,481 3,766,703
Management fees 302,918 302,918 908,753 908,753
------------ ------------ ------------ ------------
Total costs and expenses 11,179,182 10,987,508 34,001,105 31,713,250
------------ ------------ ------------ ------------
NET INCOME $ 3,296,862 $ 6,926,051 $ 11,972,173 $ 13,658,932
------------ ------------ ------------ ------------
PER UNIT OF LIMITED
PARTNERSHIP INTEREST:
NET INCOME 17.36 $ 36.47 $ 63.05 $ 71.93
Number of Units 187,994 187,994 187,994 187,994
See Notes to Consolidated Financial Statements (Unaudited).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEK PERIODS ENDED SEPTEMBER 25, 1998 (UNAUDITED)
AND SEPTEMBER 26, 1997(UNAUDITED)
September 25, September 26,
1998 1997
----------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 11,972,173 $ 13,658,932
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 5,520,799 5,334,222
Gain on sale of C-ML Radio (2,765,607) -
Gain on sale of KATC - (1,479,522)
Gain on sale of WREX - (1,844,358)
Bad debt expense/(recovery), net 160,291 (58,034)
Changes in operating assets and
liabilities:
Decrease/(Increase):
Accounts receivable
(42,681) (268,472)
Investments held by escrow agents (362,520) 6,244,252
Prepaid expenses and deferred charges 820,637 171,019
Other assets 1,558,516 (3,149,477)
(Decrease)/Increase:
Accounts payable and accrued
liabilities 1,386,175 6,488,383
Subscriber advance payments 8,404 (28,163)
----------- ----------
Net cash provided by operating
activities 18,256,187 25,068,782
</TABLE>
(Continued on the following page.)
<PAGE>
ML MEDIA PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTY-NINE WEEK PERIODS ENDED SEPTEMBER 25, 1998
(UNAUDITED) AND SEPTEMBER 26, 1997 (UNAUDITED)
(continued)
<TABLE>
<CAPTION>
September 25, September 26,
1998 -------------------------
1997
<S> <C> <C>
Cash flows from investing activities:
Payment of costs incurred related to
sale of the California Cable Systems $ (289,594) $ (2,249,512)
Purchase of property, plant and
equipment (5,016,447) (5,729,365)
Proceeds from sale of C-ML Radio 5,768,750 -
------------ --------------
Net cash provided by/(used in)
investing activities 462,709 (7,978,877)
Cash flows from financing activities:
Principal payments on borrowings (1,750,901) (3,079,390)
General Partner cash distribution (189,893) -
------------ --------------
Net cash used in financing activities (1,940,794) (3,079,390)
Net increase in cash and cash
equivalents 16,778,102 14,010,515
Cash and cash equivalents at
beginning of year 92,872,891 91,591,280
------------ --------------
Cash and cash equivalents at end of
period $ 109,650,993 $ 105,601,795
------------ --------------
Cash paid for interest $ 2,640,876 $ 3,061,086
------------ --------------
</TABLE>
Supplemental Disclosure:
During the third quarter of 1997 the Partnership declared a distribution of
$18,989,293, of which $18,779,400 was paid to the limited partners in the fourth
quarter of 1997.
See Notes to Consolidated Financial Statements (Unaudited).
<PAGE>
ML MEDIA PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTY-NINE WEEK PERIOD ENDED SEPTEMBER 25, 1998 (UNAUDITED)
1. Basis of Presentation
The unaudited consolidated financial statements included herein reflect all
normal recurring adjustments which are, in the opinion of the General Partner,
necessary for a fair presentation of the financial position of the Partnership
as of September 25, 1998 and the results of operations and cash flows of the
Partnership for the interim periods presented. The results of operations for the
thirty-nine week period ended September 25, 1998 are not necessarily indicative
of the results of operations that may be expected for the entire year. Certain
information and note disclosures normally included in the financial statements
provided herein and prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules of the
Securities and Exchange Commission ("SEC"). These unaudited consolidated
financial statements should be read in conjunction with the audited consolidated
financial statements and notes thereto, included in the Partnership's 1997
Annual Report on Form 10-K filed with the SEC on March 26, 1998.
Certain reclassifications were made to the 1997 and prior 1998 period
financial statements to conform with the current periods' presentation.
2. KEZY and KORG, Puerto Rico Radio, Wincom-WEBE-WICC, California Cable Systems
and KATC and WREX
The information set forth in the Liquidity and Capital Resources section of Part
I, Item 2; Management's Discussion and Analysis of Financial Condition and
Results of Operations under the headings KEZY and KORG, Puerto Rico Radio,
Wincom-WEBE-WICC, California Cable Systems and KATC and WREX is hereby
incorporated by reference and made a part hereof.
3. Contingencies
On August 29, 1997, a purported class action was commenced in New York Supreme
Court, New York County, on behalf of the limited partners of the Partnership,
against the Partnership, the Partnership's general partner, Media Management
Partners (the "General Partner"), the General Partner's two partners, RP Media
Management ("RPMM") and ML Media Management Inc. ("MLMM"), <PAGE> Merrill Lynch
& Co., Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"). The action concerns the Partnership's payment of certain management
fees and expenses to the General Partner and the payment of certain purported
fees to an affiliate of RPMM.
Specifically, the plaintiffs allege breach of the Amended and Restated Agreement
of Limited Partnership (the "Partnership Agreement"), breach of fiduciary
duties, and unjust enrichment by the General Partner in that the General Partner
allegedly: (1) improperly deferred and accrued certain management fees and
expenses in an amount in excess of $14.0 million, (2) improperly paid itself
such fees and expenses out of proceeds from sales of Partnership assets, and (3)
improperly paid MultiVision Cable TV Corp., an affiliate of RPMM, supposedly
duplicative fees in an amount in excess of $14.4 million.
With respect to Merrill Lynch & Co., Inc., Merrill Lynch, MLMM and RPMM,
plaintiffs claim that these defendants aided and abetted the General Partner in
the alleged breach of the Partnership Agreement and in the alleged breach of the
General Partner's fiduciary duties. Plaintiffs seek, among other things, an
injunction barring defendants from paying themselves management fees or expenses
not expressly authorized by the Partnership Agreement, an accounting,
disgorgement of the alleged improperly paid fees and expenses, and compensatory
and punitive damages. Defendants have moved to dismiss the complaint and each
claim for relief therein; the court has not yet ruled on the motion. Defendants
believe that they have good and meritorious defenses to the action, and
vigorously deny any wrongdoing with respect to the alleged claims.
The Partnership Agreement provides for indemnification, to the fullest extent
provided by law, for any person or entity named as a party to any threatened,
pending or completed lawsuit by reason of any alleged act or omission arising
out of such person's activities as a General Partner or as an officer, director
or affiliate of either RPMM, MLMM or the General Partner, subject to specified
conditions. In connection with the purported class action filed on August 29,
1997, the Partnership has received notices of requests for indemnification from
the following defendants named therein: the General Partner, RPMM, MLMM, Merrill
Lynch & Co., Inc. and Merrill Lynch. For the thirteen and thirty-nine week
periods ended September 25, 1998, the Partnership incurred approximately $2,000
and $194,000, respectively, for legal costs relating to such indemnification.
Such cumulative costs amount to approximately $474,000 through September 25,
1998.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Liquidity and Capital Resources.
As of September 25, 1998, Registrant had $109,650,993 in cash and cash
equivalents. Of this amount, approximately $53.1 million is restricted for use
at the operating level of the Venture (as defined below) to fund capital
expenditure programs and satisfy future non-recourse debt service requirements
(including annual principal payments of $20 million, $10 million of which is
Registrant's share, commencing November 30, 1998) and approximately $23.0
million is held in cash to cover operating liabilities, current litigation, and
litigation contingencies relating to the California Cable Systems prior to and
resulting from their sale. In addition, approximately $24.2 million is being
held for use at the operating level of Registrant's other remaining media
properties, and all remaining cash and cash equivalents are available to
Registrant for uses as provided in the Partnership Agreement. As of September
25, 1998, the amount payable for accrued management fees and expenses owed to
the General Partner amounted to approximately $1.0 million.
Registrant's ongoing cash needs will be to fund debt service, capital and
operating expenditures and required working capital as well as to provide for
costs and expenses related to the purported class action lawsuit (see below).
During the thirty-nine week period ended September 25, 1998, interest paid was
$2,640,876 and principal repayments of $1,750,901 were made. During the
remainder of 1998, Registrant is required by its various debt agreements to make
scheduled principal repayments of $12,493,137 under all of its debt agreements.
As of September 25, 1998, Registrant's operating investments in media properties
consisted of a 50% interest in a joint venture (the "Venture"), which owns 100%
of the stock of Century-ML Cable Corporation ("C-ML Cable"), which owns and
operates two cable television systems in Puerto Rico; an FM (WEBE-FM) and AM
(WICC-AM) radio station combination in Bridgeport, Connecticut; an FM (KEZY-FM)
and AM (KORG-AM) radio station combination in Anaheim, California; and Wincom
Broadcasting Corporation ("Wincom"), a corporation that owns an FM radio station
(WQAL-FM) in Cleveland, Ohio. In June 1998, the Venture consummated the sale of
an FM (WFID-FM) and AM (WUNO-AM) radio station combination and a background
music service in San Juan, Puerto Rico ("C-ML Radio") (see below). During August
1998, Registrant entered into an agreement to sell the stock of Wincom (see
below). During September 1998, Registrant entered into an agreement to sell
substantially all of the assets used in the operations of Registrant's radio
stations KEZY-FM and KORG-AM (see below).
In September 1998, much of Puerto Rico was devastated by Hurricane Georges.
Although it is too early to fully assess the damage suffered at C-ML Cable,
Registrant does not believe that there has been a material adverse effect on
Registrant's financial position, results on operations, or cash flows.
Registrant continues its efforts to enter into agreements to sell its remaining
investments in media properties; however, due to changing market conditions, it
may not be prudent to enter into such agreements at the present time. Registrant
will continue to monitor industry markets and proceed with its efforts to secure
a timely sale of its remaining investments in a manner consistent with the
overall goal of maximizing the properties' value to Registrant.
The General Partner currently anticipates that the pendency of certain
litigation, as discussed below, the related claims against Registrant for
indemnification, other costs and expenses related to such litigation, and the
involvement of management, will adversely affect (a) the timing of the
termination of Registrant, (b) the amount of proceeds which may be available for
distribution, and (c) the timing of the distribution to the limited partners of
the net proceeds from the liquidation of Registrant's assets.
On August 29, 1997, a purported class action was commenced in New York Supreme
Court, New York County, on behalf of the limited partners of Registrant, against
Registrant, Registrant's general partner, Media Management Partners (the
"General Partner"), the General Partner's two partners, RP Media Management
("RPMM") and ML Media Management Inc. ("MLMM"), Merrill Lynch & Co., Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"). The action
concerns Registrant's payment of certain management fees and expenses to the
General Partner and the payment of certain purported fees to an affiliate of
RPMM.
Specifically, the plaintiffs allege breach of the Amended and Restated Agreement
of Limited Partnership (the "Partnership Agreement"), breach of fiduciary
duties, and unjust enrichment by the General Partner in that the General Partner
allegedly: (1) improperly deferred and accrued certain management fees and
expenses in an amount in excess of $14.0 million, (2) improperly paid itself
such fees and expenses out of proceeds from sales of Registrant assets, and (3)
improperly paid MultiVision Cable TV Corp., an affiliate of RPMM, supposedly
duplicative fees in an amount in excess of $14.4 million.
With respect to Merrill Lynch & Co., Inc., Merrill Lynch, MLMM and RPMM,
plaintiffs claim that these defendants aided and abetted the General Partner in
the alleged breach of the Partnership Agreement and in the alleged breach of the
General Partner's fiduciary duties. Plaintiffs seek, among other things, an
injunction barring defendants from paying themselves management fees or expenses
not expressly authorized by the Partnership Agreement, an accounting,
disgorgement of the alleged improperly paid fees and expenses, and compensatory
and punitive damages. Defendants have moved to dismiss the complaint and each
claim for relief therein; the court has not yet ruled on the motion. Defendants
believe that they have good and meritorious defenses to the action, and
vigorously deny any wrongdoing with respect to the alleged claims.
The Partnership Agreement provides for indemnification, to the fullest extent
provided by law, for any person or entity named as a party to any threatened,
pending or completed lawsuit by reason of any alleged act or omission arising
out of such person's activities as a General Partner or as an officer, director
or affiliate of either RPMM, MLMM or the General Partner, subject to specified
conditions. In connection with the purported class action filed on August 29,
1997, Registrant has received notices of requests for indemnification from the
following defendants named therein: the General Partner, RPMM, MLMM, Merrill
Lynch & Co., Inc. and Merrill Lynch. For the thirteen and thirty-nine week
periods ended September 25, 1998, the Partnership incurred approximately $2,000
and $194,000, respectively, for legal costs relating to such indemnification.
Such cumulative costs amount to approximately $474,000 through September 25,
1998.
KEZY and KORG
On September 14, 1998, Registrant entered into an Asset Purchase Agreement (the
"Agreement") with Citicasters Co., a subsidiary of Jacor Communications, Inc.
("Citicasters"), pursuant to which Registrant agreed to sell substantially all
of the assets (other than cash and accounts receivable) used in the operations
at its KEZY-FM and KORG-AM radio stations, in Anaheim, California. The sales
price of $30,100,000 is subject to certain closing adjustments including a
working capital adjustment, as provided for in the Agreement. The closing is
subject to various conditions, including FCC approval. Under the terms of the
Agreement, an escrow account will be established at closing with respect to
which Citicasters may make indemnification claims for a period of one year after
the closing.
Puerto Rico Radio
On June 3, 1998, the Venture consummated the sale of C-ML Radio pursuant to a
sales agreement entered into in October 1997 between the Venture and Madifide,
Inc. The base sales price for C-ML Radio was approximately $11.5 million, $5.8
million of which is Registrant's share, subject to closing adjustments. Pursuant
to a local marketing agreement ("LMA") entered into, effective as of October 1,
1997, the buyer was allowed to program the station through the consummation date
of the sale. Registrant collected a monthly LMA fee from the buyer which was
equal to the operating income for that month, provided however, that it not be
less than $50,000 nor more than $105,000. The monthly fee was recognized as
revenue during the LMA period and Registrant did not recognize any operating
revenues nor incur any net operating expenses of C-ML Radio during the LMA
period. At the closing, the Venture and Madifide, Inc. entered into an escrow
agreement pursuant to which the Venture deposited, in aggregate, approximately
$725,040, $362,520 of which is Registrant's share, into an escrow account with
respect to which indemnification, benefit, and chattel mortgage claims may be
made by Madifide, Inc. for a period of one year. This escrow is being classified
on the accompanying Consolidated Balance Sheet as Investments held by escrow
agents as of September 25, 1998.
Pursuant to the terms of the outstanding senior indebtedness that jointly
finances C-ML Radio and C-ML Cable, the net proceeds, and escrow amounts when
released, if any, from the resulting sale of C-ML Radio must be retained by the
Venture and cannot be distributed to Registrant or its partners.
Wincom-WEBE-WICC
On August 11, 1998, Registrant entered into a stock purchase agreement (the
"Wincom Agreement") with Chancellor Media Corporation of Los Angeles
("Chancellor") pursuant to which Registrant agreed to sell the stock of Wincom.
Wincom owns all of the outstanding stock of Win Communications, Inc. ("WIN"),
which owns and operates radio station WQAL-FM in Cleveland, Ohio. The closing is
subject to various conditions, including FCC approval. Under the terms of the
Wincom Agreement, the closing will not occur earlier than January 4, 1999 and,
at closing, an escrow account will be established with respect to which
indemnification claims may be made by Chancellor for a period of two years after
the closing.
In connection with the Wincom Agreement, WIN and Chancellor entered into a Time
Brokerage Agreement, pursuant to which WIN will make substantially all of the
time on the station available to Chancellor in exchange for a monthly payment by
Chancellor to WIN. The Time Brokerage Agreement became effective on October 1,
1998.
On December 31, 1997, the Wincom-WEBE-WICC Loan (the "Loan") matured and became
due and payable in accordance with its terms. As of that date, $4,244,038 of
such amount remained due and payable to the Wincom Bank. During the thirty-nine
week period ended September 25, 1998, $1,750,901 of principal was paid resulting
in an outstanding balance of $2,493,137 as of September 25, 1998. As a result of
such default, the Wincom Bank has the right to take actions to enforce its right
under the Loan including the right to foreclose on the properties of the
Wincom-WEBE-WICC group. The Loan is non-recourse to the other assets of
Registrant. Registrant and the Wincom Bank are negotiating the terms of a waiver
of the default and an amendment to the Loan that would, among other things,
extend the maturity date of the loan.
California Cable Systems
On November 28, 1994, Registrant entered into an agreement (the "Asset Purchase
Agreement") with Century Communications Corp. ("Century") to sell to Century
substantially all of the assets used in Registrant's California Cable Operation
serving the Anaheim, Hermosa Beach/Manhattan Beach, Rohnert Park/Yountville and
Fairfield communities (the "California Cable Systems"). On May 31, 1996,
Registrant consummated such sale pursuant to the terms of the Asset Purchase
Agreement. The base purchase price for the California Cable Systems was $286
million, subject to certain adjustments including an operating cash flow as well
as a working capital adjustment, as provided in the Asset Purchase Agreement.
In addition, upon closing of the sale of the California Cable Systems,
Registrant set aside approximately $40.7 million in a cash reserve to cover
operating liabilities, current litigation, and litigation contingencies relating
to the California Cable Systems' operations prior to and resulting from their
sale, as well as a potential purchase price adjustment. In accordance with the
terms of the Partnership Agreement, any amounts which may be available for
distribution from any unused cash reserves, after accounting for certain other
expenses of Registrant including certain expenses incurred after May 31, 1996,
will be distributed to partners of record as of the date such unused reserves
are released, when Registrant determines such reserves are no longer necessary,
rather than to the partners of record on May 31, 1996, the date of the sale. As
of September 25, 1998, Registrant had approximately $23.0 million remaining in
cash reserves to cover operating liabilities, current litigation, and litigation
contingencies relating to the California Cable Systems prior to and resulting
from their sale.
KATC and WREX
During the thirteen week period ended September 26, 1997, Registrant recognized
a gain on sale of KATC-TV and WREX-TV of $1,479,522 and $1,844,358 respectively,
resulting from the reversal of previous accruals.
Year 2000 Compliance Issue
The inability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a two
digit year is commonly referred to as the Year 2000 Compliance issue. As the
year 2000 approaches, such systems may be unable to accurately process certain
data-based information. Many businesses may need to upgrade existing systems or
purchase new ones to correct the Year 2000 issue.
The total costs to Registrant of the Year 2000 Compliance is not anticipated to
be material to its financial position or results of operations in any given
year. However, there can be no guarantee that the systems of other companies on
which Registrant's systems rely will be timely converted, or that a failure to
convert by another company or a conversion that is incompatible with
Registrant's systems, would not have a material adverse effect on Registrant.
Recent Accounting Statements
Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosures about
Segments of an Enterprise and Related Information," was issued in June 1997 and
is effective for financial statements for periods beginning after December 15,
1997. This statement establishes standards for the way public companies report
information about operating segments in annual and interim financial statements.
Although currently effective, SFAS No. 131 does not require application to
interim financial statements in the initial year of application. Registrant
believes its current reporting systems will enable it to comply with the
implementation of SFAS No. 131 in the annual financial statements.
Cable Industry Regulation
The cable television industry is subject to significant regulation at both the
federal and local level. Federal regulation of cable television systems is
conducted primarily through the FCC, although the Copyright Office also
regulates certain aspects of cable television system operation pursuant to the
Copyright Act of 1976. The Copyright Act of 1976 imposes copyright liability on
all cable television systems for their primary and secondary transmissions of
copyrighted programming. Among other things, FCC regulations currently contain
detailed provisions concerning non-duplication of network programming, sports
program blackouts, program origination, ownership of cable television systems
and equal employment opportunities. There are also comprehensive registration
and reporting requirements and various technical standards. Moreover, pursuant
to the Cable Television Consumer Protection and Competition Act of 1992 (the
"1992 Cable Act"), the FCC has, among other things, established regulations
concerning mandatory signal carriage and retransmission consent, consumer
service standards, the rates for service, equipment, and installation that may
be charged to subscribers, and the rates and conditions for commercial channel
leasing. The FCC also issues permits, licenses or registrations for microwave
facilities, mobile radios and receive-only satellite earth stations, all of
which are commonly used in the operation of cable systems.
Rate Regulation
Under the Communications Act, cable systems that are not subject to "effective
competition" are subject to regulation by the FCC and local franchising
authorities regarding the rates that may be charged to subscribers.
Under the 1992 Cable Act, a local franchising authority may certify with the FCC
to regulate the basic service tier ("BST") and associated subscriber equipment
of a cable system within its jurisdiction. By law, the BST must include all
broadcast signals (with the exception of national "superstations"), including
those required to be carried under the mandatory carriage provisions of the 1992
Cable Act, as well as public, educational, and governmental access channels
required by the franchise. Pursuant to FCC rules, the Telecommunications
Regulatory Board of Puerto Rico (the "Board") filed for certification to
regulate the rates of the cable system operated by the Venture. The cable system
operator contested the certification, claiming that it was subject to effective
competition, and therefore exempt from rate regulation, because fewer than 30
percent of the households in the system's franchise area subscribe to the
system. The Commission denied the operator's petition and the cable operator has
filed an application for review of the decision, as well as a request for stay.
Under FCC rules, a cable system remains subject to rate regulation until the FCC
finds that effective competition exists. The franchising authority for the San
Juan Cable System in Puerto Rico has been authorized by the FCC to regulate the
basic cable service and equipment rates and charges of the system. The
franchising authority has not yet sent a notice to the system to initiate rate
regulation. Regulation may result in reduced revenues going forward and in
refunds to customers for charges above those allowed by the FCC's rate
regulations for up to 12 months retroactively from when the new rates are
initiated or the franchising authority issues a potential refund accounting
order. Registrant is currently assessing the impact of this regulation.
The FCC has jurisdiction over the cable programming service tier ("CPST"), which
generally includes programming other than that carried on the BST or offered on
a per-channel or per-program basis. The Telecommunications Act of 1996 (the
"1996 Act"), however, confines rate regulation to the BST after three years: on
March 31, 1999, the CPST will be exempted from rate regulation. Under procedures
mandated by the 1996 Act, only a local franchising authority may file an FCC
complaint regarding CPST rates, and then only if the franchising authority
receives "subscriber complaints" within 90 days of the effective date of a rate
increase. The FCC must issue a final order within 90 days after receiving a
franchising authority's complaint.
Under regulations promulgated by the FCC to implement the 1992 Cable Act, cable
operators were required to set an "initial permitted" rate for regulated service
using either (i) a "benchmark" approach which, essentially involved a reduction
in rates of approximately 17% from those existing on September 30, 1992; or (ii)
a "cost of service" approach, which, much like the method historically used to
regulate the rates of local exchange carriers, allows cable system operators to
recover through regulated rates their normal operating expenses, and a
reasonable return on investment. Once set, cable systems were allowed to adjust
their initial permitted rate on a going forward basis, either quarterly or
annually under the FCC's "price cap" mechanism, which accounts for inflation,
changes in "external costs," and changes in the number of regulated channels.
External costs include state and local taxes applicable to the provision of
cable television service, franchise fees, the costs of complying with certain
franchise requirements, annual FCC regulatory fees and retransmission consent
fees and copyright fees incurred for the carriage of broadcast signals. In
addition, a cable system was allowed to treat as external (and thus pass through
to its subscribers) the costs, plus a 20 cent per channel mark-up, for certain
channels added to a CPST. Through 1997, each cable system was subject to an
aggregate cap on the amount it may increase CPST rates due to channel additions.
The FCC has also adopted "tier flexibility" rules that allow cable operators to
reduce BST rates and take a corresponding, revenue neutral, increase in CPST
rates.
Beginning in late 1995, the FCC demonstrated an increased willingness to settle
some or all of the rate cases pending against a multiple system operator ("MSO")
by entering into a "social contract" or rate settlement (collectively "social
contract/settlement"). While the terms of each social contract/settlement vary
according to the underlying facts unique to the relevant cable systems, the
common elements include an agreement by an MSO to make a specified subscriber
refund (generally in the form of in-kind service or a billing credit) in
exchange for the dismissal, with prejudice, of pending complaints and rate
proceedings. In addition, the FCC has adopted or proposed measures that may
mitigate the negative effect of the Commission's rate regulations on cable
systems' revenues and profits, and allow systems to more efficiently market
cable service. The FCC implemented an abbreviated cost-of-service mechanism for
cable systems of all sizes that permits systems to recover the costs of
"significant" upgrades (e.g., expansion of system bandwidth capacity) that
provide benefits to subscribers to regulated cable service. This mechanism could
make it easier for cable systems to raise rates to cover the costs of an
upgrade. The Commission also has proposed an optional rate-setting methodology
under which a cable operator serving multiple franchise areas could establish
uniform rates for uniform cable service tiers offered in multiple franchise
areas.
Pending before the FCC is a petition calling for a freeze on cable rates and
increased rate regulation. Congress has also expressed some interest in cable
rates and programming costs. In addition, the Chairman of the FCC has expressed
concern that the March 31, 1999 sunset for regulation of CPST rates may be
unrealistic given that competition to cable has not developed as rapidly as
expected following enactment of the 1996 Act. Registrant cannot predict the
outcome of FCC or congressional action on these issues.
Must-Carry
On March 31, 1997, the United States Supreme Court, in a 5-4 decision, upheld
the constitutionality of the must-carry provisions of the 1992 Cable Act. As a
result, the regulations promulgated by the FCC to implement the must-carry
provisions will remain in effect. Under those rules, cable operators generally
are required to devote up to one-third of their activated channel capacity to
the carriage of local commercial television stations. The FCC currently is
considering whether cable operators are, or should be, obligated to carry the
digital signals of broadcast stations. Registrant cannot predict the effect of
the requirement that cable operators carry digital broadcast signals in addition
to existing analog signals, nor the outcome of this proceeding on its
operations.
Concentration of Ownership
The 1992 Cable Act directed the FCC to establish reasonable limits on the number
of cable subscribers a single company may reach through cable systems it owns
(horizontal concentration) and the number of system channels that a cable
operator could use to carry programming services in which it holds an ownership
interest (vertical concentration). The horizontal ownership restrictions of the
1992 Cable Act were struck down by a federal district court as an
unconstitutional restriction on speech. Pending final judicial resolution of
this issue, the FCC voluntarily stayed the effective date of its horizontal
ownership limitations, which would place a 30 percent nationwide limit on
subscribers served by any one entity. Thereafter, a Motion to lift the Stay and
Petitions for Reconsideration were filed. A challenge was also brought against
the rules in federal court. In August 1996, the United States Court of Appeals
for the District of Columbia Circuit decided to hold court proceedings in
abeyance pending the Commission's reconsideration of the rules. The FCC recently
sought further comment on the issue. The FCC's vertical ownership restriction
consists of a "channel occupancy" standard which places a 40 percent limit on
the number of channels (up to 75 channels) that may be occupied by services from
programmers in which the cable operator has an attributable ownership interest.
Further, the 1992 Cable Act and FCC rules restrict the ability of programmers in
which cable operators hold an attributable interest to enter into exclusive
contracts with cable operators.
Broadcast/Cable Cross-Ownership
The 1996 Act eliminated the statutory ban on broadcast station/cable
cross-ownership. This cleared the way for the Commission to reconsider its rules
which prohibit the common ownership of a broadcast television station and a
cable system in the same local community. The Commission is now reviewing these
rules.
Radio Industry Regulation
The 1996 Act completely revised the radio ownership rules by, among other
things, eliminating the national radio ownership restriction. Any number of AM
or FM broadcast stations may be owned or controlled by one entity nationally.
The 1996 Act also greatly eased local radio ownership restrictions. As with the
old rules, the maximum varies depending on the number of radio stations within
the market. In markets with more than 45 stations, one company may own, operate,
or control eight stations, with no more than five in any one service (AM or FM).
In markets of 30-44 stations, one company may own seven stations, with no more
than four in any one service. In markets with 15-29 stations, one entity may own
six stations, with no more than four in any one service. In markets with 14
commercial stations or less, one company may own up to five stations or 50% of
all of the stations, whichever is less, with no more than three in any one
service.
This new regulatory flexibility has engendered aggressive local, regional,
and/or national acquisition campaigns. Removal of previous station ownership
limitations on leading major station groups has increased the competition for
and the prices of attractive stations. In 1992, the FCC placed limitations on
LMAs through which the licensee of one radio station provides the programming
for another licensee's station in the same market. Stations operating in the
same service (e.g., where both stations are AM) and in the same market are
prohibited from simulcasting more than 25% of their programming. Moreover, in
determining the number of stations that a single entity may control in a local
market, an entity programming a station pursuant to an LMA is required, under
certain circumstances, to count that station toward its maximum even though it
does not own the station.
The 1996 Act did not alter the FCC's newspaper/broadcast cross-ownership
restrictions. However, the FCC is considering whether to change the policy
pursuant to which it considers waivers of the radio/newspaper cross-ownership
rule and, as part of a biennial review of its regulations required by the 1996
Act, has sought comment on whether to revise or eliminate the rule.
In January 1995, the FCC adopted rules to allocate spectrum for satellite
digital audio radio service ("DARS"). Satellite DARS systems potentially could
provide for regional or nationwide distribution of radio programming with
fidelity comparable to compact disks. An auction for DARS spectrum was held on
April 1, 1997 and the Commission has issued two authorizations to launch and
operate satellite DARS services. The FCC also has undertaken an inquiry into the
terrestrial broadcast of DARS signals, addressing, among other things, the need
for spectrum outside the existing FM band and the role of existing broadcasters
in providing such a service. Registrant cannot predict the outcome of these
proceedings or the ultimate impact of DARS on its stations.
The foregoing does not purport to be a complete summary of the provisions of the
Communications Act, the 1992 Cable Act, or the 1996 Act or of the regulations
and policies of the FCC thereunder. Moreover, proposals for additional or
revised statutory or regulatory requirements are considered by Congress and the
FCC from time to time. It is not possible to predict what legislative,
regulatory or judicial changes, if any, may occur or their impact on the
Registrant's business or operations.
Forward Looking Information
In addition to historical information contained or incorporated by reference in
this report on Form 10-Q, Registrant may make or publish forward-looking
statements about management expectations, strategic objectives, business
prospects, anticipated financial performance, and other similar matters. In
order to comply with the terms of the safe harbor for such statements provided
by the Private Securities Litigation Reform Act of 1995, Registrant notes that a
variety of factors, many of which are beyond its control, affect its operations,
performance, business strategy, and results and could cause actual results and
experience to differ materially from the expectations expressed in these
statements. These factors include, but are not limited to, the effect of
changing economic and market conditions, trends in business and finance and in
investor sentiment, the level of volatility of interest rates, the actions
undertaken by both current and potential new competitors, the impact of current,
pending, and future legislation and regulation both in the United States and
throughout the world, and the other risks and uncertainties detailed in this
Form 10-Q, and as more fully detailed in Form 10-K incorporated by reference
herein. Registrant undertakes no responsibility to update publicly or revise any
forward-looking statements.
Results of Operations.
For the thirteen week periods ended September 25, 1998 and September 26, 1997:
Net Income.
Registrant's net income for the thirteen week period ended September 25, 1998
was approximately $3.3 million, as compared to net income of approximately $6.9
million for the 1997 period. The decrease in net income for the 1998 period
resulted primarily from the approximate $3.3 million gain on the sales of WREX
and KATC which were reported in the 1997 period as well as the effect of the
factors described below.
Operating Revenues.
During the thirteen week periods ended September 25, 1998 and September 26,
1997, Registrant had total operating revenues of approximately $13.9 million and
$13.7 million, respectively. The approximate $163,000 increase in operating
revenues was primarily due to an increase of approximately $680,000 in operating
revenues at C-ML Cable, partially offset by a decrease of approximately $543,000
in operating revenues at C-ML Radio. The increase in operating revenues at C-ML
Cable reflects an increase in the number of basic subscribers from 121,193 at
the end of the third quarter of 1997, to 128,752 at the end of the third quarter
of 1998, an increase in premium revenues due to an increase in premium
subscriptions, as well as an increase in advertising sales. The decrease in
operating revenues at C-ML Radio is due to the sale of C-ML Radio on June 3,
1998. The remaining increases or decreases in operating revenues at Registrant's
other properties were immaterial, either individually or in the aggregate.
Interest Income.
During the third quarters of 1998 and 1997, Registrant earned interest income of
approximately $653,000 and $853,000, respectively. The decrease is due primarily
to the lower cash reserve balances that existed during the third quarter of 1998
due to the fourth quarter 1997 cash distribution.
Property Operating Expense.
During the third quarters of 1998 and 1997, Registrant incurred property
operating expenses from year to year of approximately $4.5 million and $4.9
million, respectively. The approximate $456,000 decrease in property operating
expenses was primarily due to a decrease of approximately $380,000 resulting
from the sale of C-ML Radio on June 3, 1998. The remaining increases or
decreases in property operating expenses at Registrant's other properties were
immaterial, either individually or in the aggregate.
General and Administrative Expense.
During the third quarters of 1998 and 1997, Registrant incurred general and
administrative expenses of approximately $3.4 million and $2.7 million,
respectively. Registrant's total general and administrative expenses increased
by approximately $646,000 from year to year primarily due to an increase of
approximately $1.3 million at C-ML Cable primarily due to an increase in the
provision for income taxes for the 1998 period, partially offset by a decrease
of approximately $425,000 resulting from the sale of C-ML Radio on June 3, 1998.
The remaining increases or decreases in general and administrative expenses at
Registrant's other properties were immaterial, either individually or in the
aggregate.
Depreciation and Amortization Expense.
Registrant's depreciation and amortization expense totaled approximately $1.8
million during both the third quarters of 1998 and 1997. Registrant's total
depreciation and amortization expense remained flat from year to year primarily
due to an increase of approximately $172,000 at C-ML Cable partially due to an
increase in the asset base resulting from the plant expansion, partially offset
by a combined decrease of approximately $39,000 at the Wincom-WEBE-WICC Group
due to certain assets becoming fully amortized at the end of 1997 and a decrease
of approximately $50,000 resulting from the sale of C-ML Radio on June 3, 1998.
The remaining increases or decreases in depreciation and amortization expense at
Registrant's other properties were immaterial, either individually or in the
aggregate.
For the thirty-nine week periods ended September 25, 1998 and September 26,
1997:
Net Income.
Registrant's net income for the thirty-nine week period ended September 25, 1998
was approximately $12.0 million, as compared to net income of approximately
$13.7 for the 1997 period. The decrease in net income for the 1998 period
resulted primarily from the approximate $3.3 million gain from the sales of WREX
and KATC which were reported in the 1997 period, partially offset by the
approximate $2.8 million gain from the sale of C-ML Radio in 1998 as well as the
effect of the factors described below.
Operating Revenues.
During the thirty-nine week periods ended September 25, 1998 and September 26,
1997, Registrant had total operating revenues of approximately $41.0 million and
$39.5 million, respectively. The approximate $1.5 million increase in operating
revenues was primarily due to a increase of approximately $2.5 million in
operating revenues at C-ML Cable as well as a combined increase of approximately
$711,000 at the Wincom-WEBE-WICC Group, partially offset by a decrease of
approximately $1.8 million in operating revenues at C-ML Radio. The increase in
operating revenues at C-ML Cable reflects an increase in the number of basic
subscribers from 121,193 at the end of the third quarter of 1997 to 128,752 at
the end of the third quarter of 1998, an increase in premium revenues due to an
increase in premium subscriptions, as well as an increase in advertising sales.
The combined increase in operating revenues at the Wincom-WEBE-WICC Group is due
to an increase in advertising revenues resulting from the use of sales incentive
programs. The decrease in operating revenues at C-ML Radio is due to the
recognition of a monthly fee in the 1998 period, instead of actual operating
revenues and expenses, in accordance with the LMA entered into during the fourth
quarter of 1997, and its sale on June 3, 1998. The remaining increases or
decreases in operating revenues at Registrant's other properties were
immaterial, either individually or in the aggregate.
Interest Income.
Registrant earned interest income of approximately $2.2 million and $2.5 million
during the first thirty-nine weeks of 1998 and 1997, respectively. The decrease
is due primarily to the lower cash reserve balances that existed during the
thirty-nine weeks of 1998 due to the fourth quarter 1997 cash distribution.
Property Operating Expense.
During the first thirty-nine weeks of 1998 and 1997, Registrant incurred
property operating expenses of approximately $13.7 million and $14.4 million,
respectively. The approximate $703,000 decrease in property operating expenses
from year to year was primarily due to a decrease of approximately $1.2 million
at C-ML Radio, which resulted from the recognition of a monthly fee instead of
actual operating revenues and expenses, in accordance with the LMA entered into
during the fourth quarter of 1997, and its sale on June 3, 1998. This decrease
was partially offset by an increase of approximately $409,000 at C-ML Cable,
which resulted from expenses directly related to the increase in operating
revenues, as well as increased maintenance costs. The remaining increases or
decreases in property operating expenses at Registrant's other properties were
immaterial, either individually or in the aggregate.
General and Administrative Expense.
During the first thirty-nine weeks of 1998 and 1997, Registrant incurred general
and administrative expenses of approximately $10.0 million and $7.3 million,
respectively. Registrant's total general and administrative expenses increased
by approximately $2.7 million from year to year primarily due to an increase of
approximately $2.9 million at C-ML Cable and approximately $700,000 at C-ML
Radio, both primarily due to an increase in the provision for income taxes for
the 1998 period. These increases were partially offset by a decrease of
approximately $367,000 in connection with the sale of C-ML Radio on June 3, 1998
and approximately $380,000 resulting from the receipt in 1998 of tax assessment
refunds related to the California Cable Systems. The remaining increases or
decreases in general and administrative expenses at Registrant's other
properties were immaterial, either individually or in the aggregate.
Depreciation and Amortization Expense.
Registrant's depreciation and amortization expense totaled approximately $5.5
million and $5.3 million in the first thirty-nine weeks of 1998 and 1997,
respectively. Registrant's total depreciation and amortization expense increased
by approximately $187,000 from year to year due to an increase of approximately
$423,000 at C-ML Cable due to an increase in the asset base resulting from the
plant expansion, partially offset by a combined decrease of approximately
$128,000 at the Wincom-WEBE-WICC Group due to certain assets becoming fully
amortized at the end of 1997 and a decrease of approximately $59,000 resulting
from the sale of C-ML Radio on June 3, 1998. The remaining increases or
decreases in depreciation and amortization expense at Registrant's other
properties were immaterial, either individually or in the aggregate.
<PAGE>
<PAGE>
PART II - OTHER INFORMATION.
Item 1. Legal Proceedings.
On August 29, 1997, a purported class action was commenced in New York Supreme
Court, New York County, on behalf of the limited partners of Registrant, against
Registrant, Registrant's general partner, Media Management Partners (the
"General Partner"), the General Partner's two partners, RP Media Management
("RPMM") and ML Media Management Inc. ("MLMM"), Merrill Lynch & Co., Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"). The action
concerns Registrant's payment of certain management fees and expenses to the
General Partner and the payment of certain purported fees to an affiliate of
RPMM.
Specifically, the plaintiffs allege breach of the Amended and Restated Agreement
of Limited Partnership (the "Partnership Agreement"), breach of fiduciary
duties, and unjust enrichment by the General Partner in that the General Partner
allegedly: (1) improperly deferred and accrued certain management fees and
expenses in an amount in excess of $14.0 million, (2) improperly paid itself
such fees and expenses out of proceeds from sales of Registrant assets, and (3)
improperly paid MultiVision Cable TV Corp., an affiliate of RPMM, supposedly
duplicative fees in an amount in excess of $14.4 million.
With respect to Merrill Lynch & Co., Inc., Merrill Lynch, MLMM and RPMM,
plaintiffs claim that these defendants aided and abetted the General Partner in
the alleged breach of the Partnership Agreement and in the alleged breach of the
General Partner's fiduciary duties. Plaintiffs seek, among other things, an
injunction barring defendants from paying themselves management fees or expenses
not expressly authorized by the Partnership Agreement, an accounting,
disgorgement of the alleged improperly paid fees and expenses, and compensatory
and punitive damages. Defendants have moved to dismiss the complaint and each
claim for relief therein; the court has not yet ruled on the motion. Defendants
believe that they have good and meritorious defenses to the action, and
vigorously deny any wrongdoing with respect to the alleged claims.
The Partnership Agreement provides for indemnification, to the fullest extent
provided by law, for any person or entity named as a party to any threatened,
pending or completed lawsuit by reason of any alleged act or omission arising
out of such person's activities as a General Partner or as an officer, director
or affiliate of either RPMM, MLMM or the General Partner, subject to specified
conditions. In connection with the purported class action filed on August 29,
1997, Registrant has received notices of requests for indemnification from the
following defendants named therein: the General Partner, RPMM, MLMM, Merrill
Lynch & Co., Inc. and Merrill Lynch. For the thirteen and thirty-nine week
periods ended September 25, 1998, Registrant incurred approximately $2,000 and
$194,000, respectively, for legal costs relating to such indemnification. Such
cumulative costs amount to approximately $474,000 through September 25, 1998.
Registrant is not aware of any other material legal proceedings.
Item 2. Changes in Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
A). Exhibits:
Exhibit # Description
27. Financial Data Schedule
B). Reports on Form 8-K
During the period covered by this report, on August 27, 1998, Registrant filed
with the Commission a Current Report on Form 8-K dated August 11, 1998. This
Current Report contained details regarding the stock purchase agreement entered
into with Chancellor Media Corporation of Los Angeles to sell the stock of
Wincom Broadcasting Corporation.
In addition, on September 17, 1998, Registrant filed with the Commission a
Current Report on Form 8-K dated September 14, 1998. This Current Report
contained details regarding the Asset Purchase Agreement entered into with
Citicasters Co. to sell substantially all of the assets used in the operations
of the KEZY-FM and KORG-AM radio stations.
<PAGE>
SIGNATURES
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 thereunto duly authorized.
ML MEDIA PARTNERS, L.P.
By: Media Management Partners
General Partner
By: ML Media Management Inc.
Dated: November 9, 1998 /s/ Kevin K. Albert
-------------------
Kevin K. Albert
Director and President
Dated: November 9, 1998 /s/ Diane T. Herte
------------------
Diane T. Herte
Treasurer
(principal accounting officer
and principal financial
officer of the Registrant)
<PAGE>
SIGNATURES
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 thereunto duly authorized.
ML MEDIA PARTNERS, L.P.
By: Media Management Partners
General Partner
By: RP Media Management
By: IMP Media Management, Inc.
Dated: November 9, 1998 /s/ I. Martin Pompadur
---------------------
I. Martin Pompadur
President, Secretary and
Director
(principal executive officer of
the Registrant)
Dated: November 9, 1998 /s/ Elizabeth McNey Yates
------------------------
Elizabeth McNey Yates
Executive Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted
from the quarter September 25, 1998 Form 10Q Consolidated Balance Sheets and
Consolidated Statements of Operations as of September 25, 1998, and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-25-1998
<PERIOD-END> SEP-25-1998
<CASH> 109,651
<SECURITIES> 0
<RECEIVABLES> 6,361
<ALLOWANCES> 448
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 40,116
<DEPRECIATION> 15,077
<TOTAL-ASSETS> 168,453
<CURRENT-LIABILITIES> 0
<BONDS> 52,493
<COMMON> 0
0
0
<OTHER-SE> 90,609
<TOTAL-LIABILITY-AND-EQUITY> 168,453
<SALES> 0
<TOTAL-REVENUES> 45,973
<CGS> 0
<TOTAL-COSTS> 34,001
<OTHER-EXPENSES> 6,430
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,812
<INCOME-PRETAX> 11,972
<INCOME-TAX> 0
<INCOME-CONTINUING> 11,972
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,972
<EPS-PRIMARY> 63.05
<EPS-DILUTED> 0
</TABLE>
