SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the year ended
December 31, 1997
0-16690
(Commission File Number)
ML MEDIA OPPORTUNITY PARTNERS, L.P.
(Exact name of registrant as specified in its governing
instruments)
Delaware
(State or other jurisdiction of organization)
13-3429969
(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) 236-6472
Securities registered pursuant to Section 12(b) of the Act:
None
(Title of Class)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
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 .
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in a definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Part I.
Item l. Business.
Formation
ML Media Opportunity Partners, L.P. (the "Partnership" or
"Registrant"), a Delaware limited partnership, was organized on
June 23, 1987. Media Opportunity Management Partners, a New York
general partnership (the "General Partner"), is Registrant's sole
general partner. The General Partner is a joint venture,
organized as a general partnership under New York law, between RP
Opportunity Management, L.P. ("RPOM") and ML Opportunity
Management, Inc., ("MLOM"). MLOM is a Delaware corporation and
an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc.
and an affiliate of Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"). RPOM is organized as a limited
partnership under Delaware law, the general partners of which are
EHR Opportunity Management, Inc., and IMP Opportunity Management
Inc. As a result of the death of Elton H. Rule, the owner of EHR
Opportunity Management, Inc., the general partner interest of EHR
Opportunity Management, Inc. may either be acquired by IMP
Opportunity Management Inc. or its designee. The General Partner
was formed for the purpose of acting as general partner of
Registrant.
Registrant was formed to acquire, finance, hold, develop,
improve, maintain, operate, lease, sell, exchange, dispose of and
otherwise invest in and deal with media businesses and direct and
indirect interests therein.
Registrant received initial capitalization of $4,000 and $100
from the General Partner and initial limited partners,
respectively. On January 14, 1988, Registrant commenced the
offering through Merrill Lynch of up to 120,000 units of limited
partnership interest ("Units") at $1,000 per Unit. On March 23,
1988 and April 27, 1988, Registrant had its first and second
closings on the sale of 99,131 and 13,016 Units, respectively,
thereby admitting additional limited partners to Registrant. As
of December 31, 1997, total limited partners' and General
Partner's capital contributions were $112,147,100 and $1,132,800,
respectively.
Media Properties
Registrant has completed the sale of all its Media properties as
follows:
As of July 1, 1993, Registrant entered into three
transactions to sell the business of International Media
Publishing, L.P. ("IMPLP")/International Media Publishing, Inc.
("IMPI") and Intelidata Limited ("Intelidata"). On August 27,
1997, Registrant received the final deferred sale payment arising
from the July 1, 1993 sale of its interest in IMPLP and
Intelidata;
On September 30, 1993, Maryland Cable (as defined below)
consummated the sale of cable television systems owned and
operated in Leesburg, Virginia;
On May 18, 1994, Registrant completed the sale of the assets
of its cable television systems in North Carolina (the "Windsor
Systems");
Effective September 30, 1994, Registrant disposed of the
business and assets of its cable television systems in Maryland
("Maryland Cable");
On February 21, 1995, Registrant completed the sale of its
radio station in Virginia ("WMXN-FM");
On September 15, 1995, TCS Television Inc. ("TCS Inc.")
completed the sale of all of the outstanding capital stock of
Avant Development Corporation, the corporation which owned
television station WRBL-TV ("Avant");
On May 29, 1996, Registrant sold all of its shares of
Western Wireless Corporation ("WWC") in an initial public
offering of shares of common stock of WWC;
On May 31, 1996, Registrant completed the sale of films and
other projects developed by Paradigm Entertainment, L.P.
("Paradigm"), a California based company and a participating
interest in Bob Banner Associates Development ("BBAD");
On April 15, 1997, TCS Television Partners, L.P. ("TCS") and
TCS Inc. sold all of the outstanding stock of Fabri Development
Corporation ("Fabri"); and
On September 22, 1997, Registrant completed the sale of its
interest in MV Technology Limited ("MVT").
As of September 22, 1997, with the closing of the sale of MVT,
Registrant disposed of its last Media Business (as defined in the
Amended and Restated Agreement of Limited Partnership (the
"Partnership Agreement")). The only former investments as to
which Registrant retains an obligation to advance funds relates
to its former investments in IMPLP, IMPI, Intelidata, Paradigm
and the Windsor Systems, which in the aggregate equals
approximately $1.4 million. In addition, certain obligations and
contingent liabilities of approximately $4.7 million relating to
the sale of the TCS stations remain outstanding. These amounts
are recorded as liabilities as of December 31, 1997 in the
financial statements of Registrant. Registrant is attempting to
resolve these obligations as soon as practicable.
As a result of the outstanding litigation, Registrant expects a
delay in its liquidation (see Item 3).
Windsor Systems
On April 13, 1988, Registrant purchased all of the assets of the
community antenna television systems owned by Windsor
Cablevision, Inc. ("Windsor") serving four communities in North
Carolina (the "Windsor Systems"). The purchase price of the
Windsor Systems was $4,287,500, of which $1,257,500 was paid for
in cash and $3,030,000 was financed by a seller note (the
"Windsor Note").
On May 18, 1994, Registrant sold the assets of the Windsor
Systems for $3,443,200, subject to post-closing adjustments. At
closing, Registrant repaid the $2,050,058 of principal and
interest then due under the Windsor Note, as required by the
terms of the Windsor Note. In addition, as required by the Asset
Purchase Agreement, at closing, $342,160 (the "Escrowed Monies")
was placed into two separate escrow accounts to cover the
potential costs of improving pole attachments and other possible
post-closing expenses. The remaining $1,050,982 in sales
proceeds was applied or reserved to pay closing costs of the
transaction and certain pre-closing liabilities to third parties
other than the buyer. As of December 31, 1997, such reserved
amounts are reflected as liabilities in the Consolidated Balance
Sheet.
On August 29, 1996, approximately $190,000 was received by
Registrant as final settlement for post-closing adjustments
related to the sale of the Windsor Systems. As of September 30,
1996, Escrowed Monies of approximately $279,000 plus
approximately $34,000 of interest was received by Registrant in
full settlement of the post-closing expense escrow. In addition,
Escrowed Monies of approximately $63,000 plus approximately
$8,000 of interest was distributed to the buyer in full
settlement of the pole attachment escrow. As of December 31,
1996, no further amounts related to the Windsor Systems remain in
escrow.
Registrant recognized a gain of $600,000 for financial reporting
purposes in 1994 on the sale of the Windsor Systems and a gain of
approximately $469,000 in 1996 for settlement of escrows and
other post-closing adjustments.
TCS Television Partners, L.P.
On January 17, 1990, Registrant entered into a limited
partnership agreement with Riverdale Media Corporation
("Riverdale"), forming TCS. The agreement was subsequently
amended to include Commonwealth Capital Partners, L.P.
("Commonwealth"),which is not affiliated with Registrant, as a
limited partner. Initially, Riverdale was the general partner of
TCS, and owned 20.01% of the entity. Registrant and Commonwealth
were limited partners owning 41% and 38.99%, respectively.
Riverdale contracted with ML Media Opportunity Consulting
Partners, a wholly-owned subsidiary of Registrant, to provide
management services for TCS.
On June 19, 1990, TCS completed its acquisition of three network
affiliated television stations; WRBL-TV, the CBS affiliate
serving Columbus, Georgia; WTWO-TV, the NBC affiliate serving
Terre Haute, Indiana; and KQTV-TV, the ABC affiliate serving St.
Joseph, Missouri.
The purchase price of $49 million, a non-compete payment of $7
million, and starting working capital and closing costs of
approximately $5 million were funded by the sale by TCS of senior
notes totaling $35 million and subordinated notes totaling $10
million, and by equity contributions of $16 million, of which
approximately $8.15 million was contributed by Registrant.
Registrant's total equity contribution and incurred costs were
approximately $8.3 million as of December 31, 1994 (including
approximately $170,000 noted below). In addition, Registrant had
loaned TCS approximately $400,000 for working capital purposes
during 1991.
On December 14, 1992, Registrant concluded agreements to
restructure the debt and ownership arrangements of TCS. TCS had
been unable to generate sufficient funds from operations to meet
fully its original obligations under its note purchase
agreements. TCS's senior debt was amended to reschedule
principal payments, and its subordinated lenders agreed to defer
all scheduled interest and principal payments through December
15, 1995. As payment for a transaction fee, the senior lenders
were issued additional notes, due May 31, 1997, in the amount of
$350,000. All previous defaults under the senior and
subordinated debt were waived. The new debt arrangements were
structured to provide TCS with three years following the
restructuring in which to improve operating performance and avoid
selling TCS in the then-illiquid transaction market for broadcast
television stations.
Concurrently, the equity partners in TCS agreed to seek
regulatory approval to alter the ownership structure of the
company. On March 26, 1993, Registrant was granted such approval
by the FCC. As a result, on March 26, 1993, Registrant and
Commonwealth purchased the 20.01% ownership interest held by
Riverdale. On March 26, 1993, a wholly-owned subsidiary of
Registrant, TCS Management Corporation became the new sole
general partner of TCS and Registrant's total ownership interest
in TCS increased from 41% to 51.005% (1% of which is the general
partner interest). Registrant utilized approximately $170,000 of
its working capital reserve to acquire the additional 10.005%
interest.
TCS entered into an agreement (the "Sub-Debt Proceeds Sharing
Agreement") dated September 17, 1996 with the holders of its
subordinated debt under which the lenders agreed that TCS would
be entitled to share in the net proceeds of the sale of the TCS
stations in accordance with a formula set forth in such
agreement.
On September 15, 1995, TCS Inc. completed the sale to The Spartan
Radiocasting Company ("Spartan") of all of the outstanding
capital stock of Avant, a 100% owned corporate subsidiary of TCS
Inc., which owns WRBL-TV, for a net sales price of $22.7 million.
From the proceeds of the sale, a reserve of approximately $1.4
million was established to cover certain expenses and liabilities
relating to the sale and $1,250,000 was deposited into an
indemnity escrow account to secure TCS Inc.'s indemnification
obligations to Spartan for taxes and other liabilities. In
addition, approximately $18.9 million was applied to repay a
portion of TCS' total indebtedness, which was secured by a pledge
of the shares of Fabri. Approximately $1.1 million was applied
to closing costs. Registrant recognized a gain, for financial
reporting purposes, on the sale of Avant of approximately $17.6
million, partially offset by a reserve for estimated losses on
such future sale of the remaining television stations of TCS of
approximately $9.9 million. During 1997, $1 million plus accrued
interest of approximately $74,000 was returned to TCS from the
indemnity escrow relating to the sale of Avant.
On April 15, 1997, TCS and TCS Inc. (jointly, the "Sellers"),
completed the sale to Nexstar Broadcasting Group, L.L.C.
("Nexstar") of all of the outstanding capital stock of Fabri.
Before the consummation of the sale, Nexstar assigned its rights
under the Stock Purchase Agreement (the "Stock Purchase
Agreement") to Nexstar Broadcasting of the Midwest Inc. The base
purchase price for the outstanding shares of Fabri was
$31,323,922 after a working capital adjustment. Pursuant to the
terms of the Stock Purchase Agreement and the Sub-Debt Proceeds
Sharing Agreement, after application of the proceeds generated by
the sale to the payment of transaction expenses resulting from
the sale and to the establishment of two separate escrow accounts
totaling $1,750,000, the remaining proceeds received from the
sale were applied as follows: $23,757,072 to repay certain
amounts to TCS's lenders; $1,022,534 to repay outstanding
principal and accrued interest on a loan made to TCS by
Registrant; and $2,604,601 and $1,736,400 to pay Registrant and
Commonwealth Capital Partners, L.P., respectively, their share of
certain accrued and unpaid consulting fees. During 1997 and
early 1998, $1,750,000 plus accrued interest of approximately
$63,000 was returned to TCS from escrows related to the sale of
Fabri. The escrow accounts are included in cash and cash
equivalents as of December 31, 1997, in the accompanying
financial statements. Registrant recorded income of $5,359,986
during 1997 related to the sale of TCS (see Note 4).
Refer to Notes 2 and 4 of "Item 8. Financial Statements and
Supplementary Data" for further information regarding TCS's debt.
Paradigm Entertainment
On June 15, 1989, Registrant entered into a limited partnership
agreement (the "Paradigm Agreement") with ML Media Opportunity
Productions, Inc. ("Productions"), the Gary L. Pudney Co. ("GLP
Co."), and Bob Banner Associates Inc. ("Associates") to form
Paradigm Entertainment L.P. ("Paradigm"), a broadcast and cable
television production company based in California. Productions
is a corporation, 100% owned by Registrant, formed to hold a 1%
general partnership interest in Paradigm. Initially, Registrant
owned 49% of Paradigm as a limited partner, while GLP Co. and
Associates each had a 25% ownership share in Paradigm as general
partners. GLP Co. pledged the exclusive services of Gary L.
Pudney and Associates pledged the exclusive services of Bob
Banner for the duration of Paradigm's operations.
On May 31, 1991, Registrant, Productions, GLP Co. and Associates
entered into a new agreement (the "Revised Paradigm Agreement")
that amended the original Paradigm Agreement. Under the terms of
the Revised Paradigm Agreement, effective June 16, 1991 the
general partner interests of GLP Co. and Associates in Paradigm
were converted to limited partner interests. GLP Co. and
Associates each retained their 25% ownership in Paradigm and
Registrant retained its 50% beneficial interest. Under the terms
of the Revised Paradigm Agreement, Paradigm retained ownership of
all program concepts developed by Paradigm prior to June 15,
1991, but assigned the task of further developing these program
concepts to GLP Co. and/or Associates as independent contractors.
Per the Revised Paradigm Agreement, if GLP Co. or Associates were
to develop any new program concepts during the period in which
they were acting as independent contractors for Paradigm, GLP Co.
or Associates would be required to offer Paradigm the right to
finance the production of such program concepts. Regardless of
Paradigm's decision to finance the further development of the new
program concepts, Paradigm would receive a share of the profits
and fees, if any, from such new program concepts.
The consulting agreements described above expired on December 31,
1991. Effective with the expiration, Associates continued,
without a formal agreement, to develop projects to offer to
Paradigm. As was the case under the Revised Paradigm Agreement,
Registrant had the option of financing such projects in return
for equity interests in such projects.
Effective June 23, 1992, Paradigm formed a general partnership
with Associates to start a new production company Bob Banner
Associates Development ("BBAD"). Paradigm and/or BBAD are not
currently producing television programs, and Registrant has not
advanced any funds to Paradigm and/or BBAD since the second
quarter of 1992. Paradigm and/or BBAD took several steps in 1992
and 1993 to reduce operating costs, primarily by reducing the
number, and compensation, of employees. However, Paradigm and/or
BBAD did not operate profitably during 1993, and were dependent
on outside sources, primarily Bob Banner Associates Inc.
("Associates"), to finance BBAD's monthly operating costs.
Registrant elected not to fund such operating costs. Due in part
to Registrant's unwillingness to advance additional funds to fund
the continuing operating losses and possible winding down of
Paradigm's and BBAD's operating activities, Registrant recorded
in 1993 a writedown of approximately $516,000 of its investment
in Paradigm and BBAD to reduce Registrant's net investment to
zero. Registrant actively sought a strategic partner that would
share in meeting Paradigm's and/or BBAD's potential future
funding needs but was unable to identify such a partner.
Paradigm and/or BBAD have no liability for borrowed funds.
Registrant has entered into an agreement with Associates under
which Paradigm retains the three television movies and the series
developed by it, and the other projects and program concepts
developed by Paradigm and/or BBAD were assigned to Associates,
and Paradigm retained a percentage interest in all such projects
and concepts.
During 1996, Registrant received proceeds of $135,000 from
Paradigm's sale of Registrant's remaining interests in the films
and other projects developed by Paradigm and assigned to Bob
Banner Associates Inc. Registrant recognized a gain for
financial reporting purposes of $135,000 on the sale of the films
and other projects in 1996, offset by operational losses of
$53,201. Although Registrant is no longer advancing funds for
continuing operations and Paradigm has no operating assets,
Registrant may be liable for certain liabilities of Paradigm.
These liabilities are reflected in the Consolidated Balance Sheet
as of December 31, 1997.
Investments and EMP, Ltd. and MVT
On September 1, 1989, Registrant entered into various agreements
with Peter Clark ("Clark") and Alan Morris ("Morris") to form
U.K. entities (the "Media Ventures Companies") that would develop
and invest in media businesses in Europe. Pursuant to the terms
of these agreements, Registrant advanced $2.0 million to Media
Ventures Investments ("Investments") and its predecessors between
1989 and December 31, 1991. During 1991, and following
Registrant's decision not to advance additional funds to the
Media Ventures Companies beyond Registrant's initial $2.0 million
commitment, the Media Ventures Companies secured funding from a
third party, ALP Enterprises, Inc. ("ALP Enterprises") to allow
the Media Ventures Companies to continue their operations. Due
to: (i) Registrant's unwillingness to advance additional funds to
the Media Ventures Companies; and (ii) the Media Ventures
Companies' resultant reliance on funding from ALP Enterprises,
Registrant's ownership in the Media Ventures Companies was
diluted -- through a number of restructurings of the ownership of
the Media Ventures Companies -- as ALP Enterprises advanced funds
to the Media Ventures Companies.
As of December 31, 1993, the Media Ventures Companies had
started, or made investments in, a number of media businesses,
including an investment in 1992 in Teletext U.K., Ltd.
("Teletext"), a newly formed U.K. corporation organized to
acquire U.K. franchise rights to provide data in text form to
television viewers via television broadcast sidebands. The
investment of the Media Ventures Companies in Teletext was
initially held by European Media Partners, Ltd. ("EMP, Ltd."),
the primary operating holding company organized by the Media
Ventures Companies. Following a July 30, 1993 restructuring,
EMP, Ltd. was owned 13.8% by Registrant, 45.6% by Clarendon (a
company controlled by the founders and management of the Media
Ventures Companies),and 40.6% by ALP Enterprises. Registrant
also owned 36.8% of the common stock of Investments (which was,
and remains, essentially inactive), ALP Enterprises owned 13.8%,
Clarendon owned 41.4%, and Charles Dawson (who manages a business
in which the Media Ventures Companies have an investment) owned
8.0%. Subsequently, Christopher Turner as nominee, purchased
Charles Dawson's interest for a nominal fee.
During 1995, the Media Ventures Companies continued to distribute
television programs, to monitor the Teletext investment held by
MV Technology Limited ("MVT") (see below), and to attempt to
expand the operations of the Media Ventures Companies into new
areas of European media.
Effective August 12, 1994, Registrant and EMP, Ltd. restructured
the ownership of EMP, Ltd. and certain of its subsidiaries in
order to enable EMP, Ltd. to attract additional capital from ALP
Enterprises and other potential third party investors. In the
restructuring, based on certain representations from EMP, Ltd.
and ALP Enterprises, Registrant sold to Clarendon and ALP
Enterprises for nominal consideration Registrant's shares in EMP,
Ltd. Simultaneously, Registrant and EMP, Ltd. entered into an
agreement whereby EMP, Ltd.'s 10% interest in Teletext was
transferred, together with a 350,000 pounds loan (approximately
$543,000 at then-current exchange rates) from EMP, Ltd. to a
newly formed entity, MVT. After the transfer, Registrant owned
13.8% of the issued common shares of MVT, while EMP, Ltd. owned
the remaining 86.2%. MVT's purpose was to manage its sole asset,
a 10% interest in Teletext, a United Kingdom corporation
organized to acquire United Kingdom franchising rights to provide
data in text form to television viewers via television broadcast
sidebands. Registrant had held an indirect 1.38% interest in
Teletext. MVT paid an annual fee to EMP, Ltd. for management
services provided by EMP, Ltd. in connection with overseeing
MVT's investment in Teletext. Following the restructuring,
Registrant no longer had any interest in EMP, Ltd.
Registrant had the right to require EMP, Ltd. to purchase
Registrant's interest in MVT at any time between December 31,
1994 and December 31, 1997. EMP, Ltd. had the right to require
Registrant to sell Registrant's interest in MVT to EMP, Ltd. at
any time between September 30, 1995 and September 30, 1998. In
January, 1996, EMP, Ltd. exercised its right to require
Registrant to sell its interest in MVT to EMP, Ltd., and notified
Registrant of its intention to acquire Registrant's interest.
On September 22, 1997, Registrant, pursuant to the option
exercised by EMP, Ltd., completed the sale of its investment, a
restructed 13.8% ownership interest in MVT for approximately
$481,000.
During 1996 and 1995, Registrant received approximately $108,000
and $87,000, respectively, in dividends from MVT.
IMPLP/IMPI and Intelidata
On June 22, 1990, Registrant entered into a limited partnership
agreement whereby Registrant and ML Media International, Inc. (a
wholly-owned subsidiary of Registrant), together with Venture
Media & Communications, L.P. and Tyler Information Strategies,
Inc. ("Tyler") formed International Media Publishing, L.P.
("IMPLP") and its wholly-owned subsidiary, International Media
Publishing, Inc. ("IMPI") to develop European business
information businesses. IMPLP/IMPI originally developed,
produced and marketed a newsletter and certain related products
focusing on European media business and finance. In the fourth
quarter of 1991, Registrant expanded IMPLP/IMPI's European
business information activities by acquiring -- through a newly-
formed corporation, Intelidata Limited ("Intelidata") -- a
division of Logica plc. IMPLP/IMPI/Intelidata did not operate
profitably, and were dependent on Registrant for working capital
advances. Registrant sought a strategic partner to invest in
IMPLP/IMPI/Intelidata, but was unable to identify such a partner.
Registrant therefore arranged to sell IMPLP/IMPI/Intelidata, and
consummated the sale of the businesses effective July 1, 1993
(see below). As of July 1, 1993, Registrant had advanced
approximately $4.2 million, and Tyler had advanced approximately
$100,000 (including $50,000 advanced to a predecessor company of
IMPLP) to IMPLP/IMPI/Intelidata.
Effective July 1, 1993, Registrant entered into three
transactions to sell the business and assets of IMPLP and its
wholly owned subsidiary IMPI and Intelidata. In two separate
transactions, Registrant sold the entire business and
substantially all of the assets of IMPLP/IMPI and a portion of
the business and assets of Intelidata to Phillips Business
Information, Inc. ("PBI") for future consideration based on the
revenues of IMPLP/IMPI and the portion of the Intelidata business
acquired by PBI. At closing, PBI made advances of $100,000 and
$150,000 to IMPLP/IMPI and Intelidata, respectively, which
advances would be recoverable by PBI from any future
consideration payable by PBI to Registrant. In addition, PBI
agreed to assume certain liabilities of IMPLP/IMPI and
Intelidata.
In the third transaction, Registrant sold the remaining business
and assets of Intelidata, which were not sold to PBI, to Romtec
plc. ("Romtec") in exchange for future consideration, based on
both the amount of assets and liabilities transferred to Romtec
and the combined profits of the portion of the Intelidata
business acquired by Romtec and another, existing division of
Romtec. In addition, certain liabilities of Intelidata were
assumed by Romtec. During 1997, it was determined that no
consideration would be payable from the sale to Romtec. As a
result of the above activity, Registrant has no remaining
interests in IMP/Intelidata.
Subsequent to the sale of the businesses, Registrant advanced net
additional funds totaling approximately $130,000 through December
31, 1997 to IMPLP/IMPI and Intelidata to fund cash shortfalls
resulting from the pre-sale claims of certain creditors.
Registrant anticipates that it will make additional such advances
to IMPLP/IMPI and Intelidata during 1998. These obligations are
reflected as a liability in the Registrant's Consolidated Balance
Sheet as of December 31, 1997.
On August 27, 1997, Registrant received approximately $160,000
representing the final deferred sale payment arising from the
July 1, 1993 sale of its interest in IMPLP and Intelidata.
Employees.
As of December 31, 1997, Registrant and its consolidated
subsidiaries did not employ any persons. The business of
Registrant is managed by the General Partner. RPOM, MLOM and ML
Leasing Management Inc., all affiliates of the General Partner,
employ individuals who perform the management and administrative
services for Registrant.
Item 2. Properties.
The offices of RPOM and MLOM are located at 350 Park Avenue -
16th Floor, New York, New York 10022 and at The World Financial
Center, South Tower - 14th Floor, New York, New York, 10080-
6114; respectively.
Item 3. 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 Opportunity Management Partners (the "General
Partner"), the General Partner's two partners, ML Opportunity
Management Inc. ("MLOM") and RP Opportunity Management, L.P.
("RPOM"), 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 RPOM.
Specifically, the plaintiffs allege breach of the Partnership
Agreement, breach of fiduciary duties and unjust enrichment by
the General Partner in that the General Partner allegedly: (1)
improperly failed to return to plaintiffs and the alleged class
members certain uninvested capital contributions in the amount of
$18.5 million (less certain reserves), (2) improperly paid itself
management fees in the amount of $18.3 million, and (3)
improperly paid MultiVision Cable TV Corp., an affiliate of RPOM,
supposedly duplicative management fees in an amount in excess of
$6 million. In addition, plaintiffs assert a claim for quantum
meruit, seeking credit for, and counsel fees based on, the
benefit supposedly received by the limited partners as a result
of a voluntary payment by Merrill Lynch to Registrant in March
1997 in the amount of approximately $23 million, representing
management fees, certain expenses, and interest paid by
Registrant to the General Partner since April 1990.
With respect to Merrill Lynch & Co., Inc., Merrill Lynch, MLOM
and RPOM, 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, return of uninvested capital
contributions, counsel fees, and compensatory and punitive
damages. On December 12, 1997, defendants served a motion to
dismiss the complaint and each claim for relief therein.
Plaintiffs' response to the defendants' motion was served on
March 20, 1998. Defendants' reply to plaintiffs' response is due
on April 29, 1998. Defendants believe that they have good and
meritorious defenses to the action.
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 suit 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 RPOM, MLOM or the General Partner, subject to
specified conditions. In connection with the purported class
action noted above, Registrant has received notices of requests
for indemnification from the following defendants named therein:
the General Partner, MLOM, RPOM, Merrill Lynch & Co., Inc. and
Merrill Lynch. As of December 31, 1997, Registrant accrued
approximately $160,000 for legal costs incurred through December
31, 1997, relating to such indemnification.
Registrant is not aware of any other material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
There were no matters which required a vote of the limited
partners of Registrant during the fourth quarter of the fiscal
year covered by this report.
Part II.
Item 5. Market for Registrant's Common Stock and Stockholder
Matters.
An established public market for Registrant's Units does not now
exist, and it is not anticipated that such a market will develop
in the future. Accordingly, accurate information as to the
market value of a Unit at any given date is not available.
As of February 5, 1998, the number of owners of Units was 14,763.
Beginning with the December 1994 client account statements,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch") implemented new guidelines for reporting estimated values
of limited partnerships and other direct investments on client
account statements. As a result, Merrill Lynch no longer reports
general partner estimates of limited partnership net asset value
on its client account statements, although the Registrant may
continue to provide its estimate of net asset value to Unit
holders. Pursuant to the new guidelines, Merrill Lynch will
report estimated values for limited partnership interests
originally sold by Merrill Lynch(such as Registrant's Units) two
times per year. Such estimated values will be provided to Merrill
Lynch by independent valuation services based on financial and
other information available to the independent services on (1)
the prior August 15th for reporting on December year-end and
subsequent client account statements through the following May's
month-end client account statements and on (2) March 31st for
reporting on June month-end and subsequent client account
statements through the November month-end client account
statements of the same year. Merrill Lynch clients may contact
their Merrill Lynch Financial Consultants or telephone the number
provided to them on their account statements to obtain a general
description of the methodology used by the independent valuation
services to determine their estimates of value. The estimated
values provided by the independent services and the Registrant's
current net asset value are not market values and Unit holders
may not be able to sell their Units or realize either amount upon
a sale of their Units. In addition, Unit holders may not realize
the independent estimated value or the Registrant's current net
asset value amount upon the liquidation of Registrant's assets
over its remaining life.
Registrant does not distribute dividends, but rather distributes
Distributable Cash From Operations, Distributable Refinancing
Proceeds, and Distributable Sale Proceeds, to the extent
available. On June 6, 1989, Registrant made a federal tax
allowance cash distribution in an amount equal to 33% of the 1988
federal taxable income to all limited partners owning Units in
1988 in proportion to their federal taxable income from the
ownership of Units. The total amount distributed was $2,040,121.
In the fourth quarter of 1994, Registrant made a cash
distribution of $8,971,760 to its limited partners and $90,624 to
its General Partner following the disposition of Maryland Cable.
In the second quarter of 1995, Registrant made a cash
distribution of $2,915,822 to its limited partners and $29,453 to
its General Partner following the sale of radio station WMXN-FM.
On July 29, 1996, Registrant made a cash distribution of
$23,999,458 to its limited partners and $242,419 to its General
Partner following the sale of its stock of Western Wireless
Corporation and the remaining interests in films and other
projects developed by Paradigm Entertainment, L.P. On April 2,
1997, Registrant made a cash distribution of $23,671,989 to its
limited partners of record as of March 24, 1997. See the
"Liquidity and Capital Resources" section of Item 7 "Management's
Discussions and Analysis of Financial Condition and Results of
Operations" for additional information regarding the April 1997
cash distribution.
Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1993 1994 1995
<S> <C> <C> <C>
Interest income $ 130,302 $ 430,730 $ 105,808
Loss from Partnership
operations (4,093,928) (3,101,614) (2,270,461)
Loss from Discontinued
operations (30,223,491) (10,426,057) -
Gain on Sale of
Discontinued
operations - 600,000 9,471,059
Extraordinary Item - 130,330,596 -
Cash distributions
paid to partners - 9,062,384 2,945,275
Per Unit of Limited
Partnership Interest:
Loss from Partnership
operations $ (36.14 $ (27.38) $ (20.04)
)
Loss from Discontinued
operations (266.80) (92.04) -
Gain on Sale of
Discontinued
operations - 5.30 83.61
Extraordinary Item - 1,150.52 -
Cash distributions
paid to partners - 80.00 26.00
As of As of As of
December 31, December 31, December 31,
1993 1994 1995
<S> <C> <C> <C>
Total Assets $ 5,307,240 $ 3,950,040 $ 2,889,001
Number of Units 112,147.1 112,147.1 112,147.1
Year Ended Year Ended
December 31, December 31,
1996 1997
<S> <C> <C>
Interest income $ 290,820 $ 260,438
Income/(Loss) from
Partnership operations 21,433,458 (995,105)
Income from Discontinued
operations 81,799 5,359,986
Cash distributions paid
to partners 24,241,877 23,671,989
Per Unit of Limited
Partnership Interest:
Income/(Loss) from
Partnership operations $ 189.21 $ (8.78)
Income from Discontinued
operations .72 47.31
Cash distributions paid
to partners 214.00 211.08
As of As of
December 31, December 31,
1996 1997
<S> <C> <C>
Total Assets $ 2,387,661 $ 13,361,127
Number of Units 112,147.1 112,147.1
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Liquidity and Capital Resources.
As of December 31, 1997, Registrant had $13,324,291 in cash and
cash equivalents, approximately $6.4 million of which is held at
the TCS level pending the resolution of TCS' obligations and
contingent liabilities. Registrant's ongoing cash needs will be
to fund its existing obligations and required working capital as
well as providing for costs and expenses related to the purported
class action lawsuit described below. The General Partner
currently anticipates that the pendency of the lawsuit, the
claims against the Registrant for indemnification, and the
related costs, expenses and involvement of management, will
adversely effect (a) the timing of the dissolution of Registrant,
(b) the timing of the distribution to the limited partners of any
remaining net proceeds of the Registrant and (c) the amount of
proceeds which may be available for distribution.
As of September 22, 1997, with the closing of the sale of MV
Technology Limited ("MVT"), Registrant disposed of its last Media
Business (as defined in the Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement")). The only
former investments as to which Registrant retains an obligation
to advance funds relates to its former investments in
International Media Publishing, L.P. ("IMPLP"), International
Media Publishing Inc. ("IMPI"), Intelidata Limited
("Intelidata"), Paradigm Entertainment, L.P. ("Paradigm") and the
Windsor Systems, which in the aggregate equals approximately $1.4
million. In addition, certain obligations and contingent
liabilities of approximately $4.7 million relating to the sale of
the TCS stations remain outstanding. These amounts are recorded
as liabilities as of December 31, 1997 in the financial
statements of Registrant. Registrant is attempting to resolve
these obligations as soon as practicable.
On March 27, 1997, Registrant received a voluntary cash payment
of $23,671,989 (the "Cash Payment") from Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch"), an affiliate of
the General Partner, for distribution to limited partners.
Pursuant to an amendment to the Partnership Agreement dated March
24, 1997 (the "Amendment"), the Cash Payment was distributable
solely to limited partners. On April 2, 1997, Registrant
distributed all the proceeds of the Cash Payment, or $211.08 per
$1,000 limited partnership unit ("Unit"), to limited partners of
record as of March 24, 1997. The Cash Payment has been treated in
the accompanying financial statements as a capital contribution
by the General Partner and simultaneously as a transfer to the
limited partners' capital.
Also, pursuant to the Amendment, Registrant's obligation to pay a
Partnership Management Fee and a Property Management Fee for 1996
and subsequent periods has been terminated. However, the General
Partner continued to provide services on behalf of Registrant.
In accordance with the Amendment, Registrant has no obligation to
pay for these services and will not pay for such services.
However, in accordance with generally accepted accounting
principles, for financial reporting purposes, an amount equal to
these services for 1997 of $1,869,597 has been treated in the
accompanying income statements as an expense with a corresponding
increase in General Partner's capital. Similarly, an amount
representing these services for 1996 of $2,144,597 was treated as
an increase in General Partner's capital and a reduction of
management fee payable in the Partnership's first quarter 1997
financial statements. In conjunction with the General Partner's
capital increases mentioned above, a transfer was made to the
limited partners' capital in an aggregate amount of $3,974,052
during 1997, which represents the limited partners' share (99%)
of the capital contribution of such services. The foregoing
expense and capital transfer have no effect on the capital of the
limited partners or the General Partner.
In addition, in 1997, Merrill Lynch paid certain expenses of
$73,000 on behalf of Registrant which were incurred by Registrant
in 1996. In accordance with generally accepted accounting
principles, for financial reporting purposes, such amount was
treated in the 1996 statement of operations as an expense of
Registrant and, when payment was made in 1997, as an increase in
General Partner's capital. Simultaneously with the payment, a
transfer was made to the limited partners' capital in an amount
of $72,270, which represents the limited partners' share (99%) of
the amount of such expenses. The foregoing capital transactions
increased capital of the General Partner and the limited partners
in an amount corresponding to the decreases to capital recorded
for such expenses in 1996. Thus, there was no effect on the
General Partner or the limited partners' capital.
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 Opportunity Management Partners (the "General
Partner"), the General Partner's two partners, ML Opportunity
Management Inc. ("MLOM") and RP Opportunity Management, L.P.
("RPOM"), Merrill Lynch & Co., Inc. and 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 RPOM.
Specifically, the plaintiffs allege breach of the Partnership
Agreement, breach of fiduciary duties and unjust enrichment by
the General Partner in that the General Partner allegedly: (1)
improperly failed to return to plaintiffs and the alleged class
members certain uninvested capital contributions in the amount of
$18.5 million (less certain reserves), (2) improperly paid itself
management fees in the amount of $18.3 million, and (3)
improperly paid MultiVision Cable TV Corp., an affiliate of RPOM,
supposedly duplicative management fees in an amount in excess of
$6 million. In addition, plaintiffs assert a claim for quantum
meruit, seeking credit for, and counsel fees based on, the
benefit supposedly received by the limited partners as a result
of a voluntary payment by Merrill Lynch to Registrant in March
1997 in the amount of approximately $23 million, representing
management fees, certain expenses, and interest paid by
Registrant to the General Partner since April 1990.
With respect to Merrill Lynch & Co., Inc., Merrill Lynch, MLOM
and RPOM, 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, return of uninvested capital
contributions, counsel fees, and compensatory and punitive
damages. On December 12, 1997, defendants served a motion to
dismiss the complaint and each claim for relief therein.
Plaintiffs' response to the defendants' motion was served on
March 20, 1998. Defendants' reply to plaintiffs' response is due
on April 29, 1998. Defendants believe that they have good and
meritorious defenses to the action.
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 suit 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 RPOM, MLOM or the General Partner, subject to
specified conditions. In connection with the purported class
action noted above, Registrant has received notices of requests
for indemnification from the following defendants named therein:
the General Partner, MLOM, RPOM, Merrill Lynch & Co., Inc. and
Merrill Lynch. As of December 31, 1997, Registrant accrued
approximately $160,000 for legal costs incurred through December
31, 1997, relating to such indemnification.
Results of Operations.
1997
Registrant generated net income of approximately $4.4 million in
1997, which was comprised of the following components: (1) the
recognition of approximately $5.4 million in income resulting
from the sale of TCS; (2) one-time gains on the sale of MVT and
IMP/Intelidata of approximately $481,000 and $160,000,
respectively, and (3) interest income of approximately $260,000;
partially offset by services provided by the General Partner of
approximately $1.9 million and general and administrative
expenses of approximately $198,000.
Pursuant to the Amendment, Registrant's obligation to pay
management fees for 1996 and subsequent periods has been
terminated. However, during 1996 and subsequent periods, the
General Partner will provide services on behalf of Registrant.
In accordance with the Amendment, Registrant has no obligation to
pay for these services and will not pay for such services.
However, in accordance with generally accepted accounting
principles, for financial reporting purposes, an amount equal to
these services is treated as an expense with a corresponding
increase in General Partner's capital. The foregoing expense and
capital transfer have no effect on the capital of the limited
partners or the General Partner.
1996
Registrant generated net income of approximately $21.5 million in
1996, which was comprised of the following components: (1) a gain
of approximately $22.8 million on the sale of the stock of WWC,
(2) interest income of approximately $291,000, (3) income from
dividends received from MVT of approximately $87,000, (4)
approximately $469,000 from monies released from escrow and other
post closing adjustments relating to the sale of the Windsor
Systems, (5) a gain of $135,000 on the sale of Registrant's
interests in films and other projects developed by Paradigm
partially offset by (a) management fee expenses of approximately
$2.1 million, (b) operational losses at Paradigm of approximately
$53,000 and (c) general and administrative expenses of
approximately $112,000.
1995
Registrant generated net income of approximately $7.2 million in
1995, which was comprised of the following components: (1) gains
of approximately $17.6 million on the sale of capital stock of
Avant Development Corporation and approximately $1.7 million on
the sale of radio station WMXN-FM, partially offset by additional
anticipated losses on the sale of the remaining TCS stations of
approximately $9.9 million, (2) income related to management
services it provided to Maryland Cable prior to its disposition
of Maryland Cable of approximately $128,000, (3) income from
dividends received from MVT of approximately $108,000 and
interest income of approximately $106,000, partially offset by
(a) management fee expenses of approximately $2.4 million and (b)
general and administrative expenses of approximately $228,000.
1997 vs. 1996
The decrease in net income of approximately $17.2 million from
1996 is primarily attributable to the one-time gain in 1996 on
the sale of the stock of WWC of approximately $22.8 million,
partially offset by the recognition of approximately $5.4 million
in income resulting from the sale of TCS.
1996 vs. 1995
The increase in net income of approximately $14.3 million from
1995 is primarily attributable to the one-time gain on the sale
of the stock of WWC of approximately $22.8 million in 1996,
offset by the one-time gain on sale of radio station WMXN-FM of
approximately $1.7 million and a gain of approximately $17.7
million on the sale of Avant, offset by a reserve for estimated
losses on the sale of the remaining television stations of TCS of
approximately $9.9 million in 1995.
Forward Looking Information
In addition to historical information contained or incorporated
by reference in this report on Form 10-K, 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-K. Registrant undertakes
no responsibility to update publicly or revise any forward-
looking statements.
Item 8. Financial Statements and Supplementary Data.
TABLE OF CONTENTS
ML Media Opportunity Partners, L.P.
Independent Auditors' Report
Consolidated Balance Sheets as of December 31,
1997 and 1996
Consolidated Income Statements for the three
years ended December 31, 1997
Consolidated Statements of Cash Flows for the
three years ended December 31, 1997
Consolidated Statements of Changes in Partners'
Capital/(Deficit) for the three years ended
December 31, 1997
Notes to Consolidated Financial Statements for
the three years ended December 31, 1997
No financial statement schedules are included
because of the absence of the conditions under
which they are required or because the
information is included in the financial
statements or the notes thereto.
INDEPENDENT AUDITORS' REPORT
ML Media Opportunity Partners, L.P.:
We have audited the accompanying consolidated financial
statements of ML Media Opportunity Partners, L.P. (the
"Partnership") and its affiliated entities, as listed in the
accompanying table of contents. These consolidated financial
statements are the responsibility of the Partnership's general
partner. Our responsibility is to express an opinion on the
consolidated financial statements based on our audits.
We conducted our audits 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 the general partner, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of the
Partnership and its affiliated entities as of December 31, 1997
and 1996, and the results of their operations and their cash
flows for each of the three years in the period ended December
31, 1997 in conformity with generally accepted accounting
principles.
/s/ Deloitte & Touche LLP
New York, New York
March 20, 1998
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1997 AND 1996
Notes 1997 1996
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents $13,324,291 $ 2,383,444
Interest and other
receivables 36,836 4,217
TOTAL ASSETS $13,361,127 $ 2,387,661
LIABILITIES AND PARTNERS'
CAPITAL/(DEFICIT):
Liabilities:
Accounts payable and accrued
liabilities $ 6,396,354 $ 1,671,454
Management fee payable - 2,144,597
Net Liabilities of
Discontinued Operations:
Production Segment - 58,912
Television and Radio Station
Segment - -
Total Liabilities 6,396,354 3,874,963
Commitments and Contingencies
2,7
</TABLE>
(Continued on the following page.)
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1997 AND 1996
(continued)
Notes 1997 1996
<S> <C> <C> <C>
Partners' Capital/(Deficit):
General Partner:
Capital contributions, net of
offering expenses 1,019,428 1,019,428
Additional capital contributions 2 27,759,183 -
Transfer from General Partner
to Limited partners 2 (27,718,311) -
Cash distributions (362,496) (362,496)
Cumulative loss (607,664) (651,313)
90,140 5,619
Limited partners:
Capital contributions, net of
offering expenses (112,147.1
Units of Limited Partnership
Interest) 100,914,316 100,914,316
Transfer from General Partner
to Limited partners 2 27,718,311 -
Tax allowance cash distribution (2,040,121) (2,040,121)
Other cash distributions 2 (59,559,029) (35,887,040)
Cumulative loss (60,158,844) (64,480,076)
6,874,633 (1,492,921)
Total Partners' Capital/(Deficit) 6,964,773 (1,487,302)
TOTAL LIABILITIES AND PARTNERS'
CAPITAL/(DEFICIT) $ 13,361,127 $ 2,387,661
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED INCOME STATEMENTS
FOR THE THREE YEARS ENDED DECEMBER 31, 1997
1997 1996 1995
<S> <C> <C> <C>
Interest income $ 260,438 $ 290,820 $ 105,808
Other income 170,718 555,489 236,283
Gain on Sale of:
MVT 481,200 - -
IMP/Intelidata 159,901 - -
Western Wireless
Corporation stock - 22,843,249 -
1,072,257 23,689,558 342,091
Partnership
Operating Expenses:
General and
administrative 197,765 111,503 228,486
Services provided by
the General Partner
1,869,597 2,144,597 2,384,066
2,067,362 2,256,100 2,612,552
(Loss)/Income from
Partnership
operations (995,105) 21,433,458 (2,270,461)
Discontinued
operations:
Income from
Discontinued
operations of:
Production Segment
- 81,799 -
Television and Radio
Station Segment
5,359,986 - -
(Continued on the following page.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED INCOME STATEMENTS
FOR THE THREE YEARS ENDED DECEMBER 31, 1997
(continued)
1997 1996 1995
<S> <C> <C> <C>
Gain on Sale of
Discontinued
Television and
Radio Station
Segment - - 9,471,059
Income from
discontinued
operations 5,359,986 81,799 9,471,059
NET INCOME $ 4,364,881 $21,515,257 $ 7,200,598
Per Unit of Limited
Partnership
Interest:
(Loss)/Income from
Partnership
operations $ (8.78) $ 189.21 $ (20.04)
Income from
discontinued
operations 47.31 .72 -
Gain on sale of
discontinued
operations - - 83.61
NET INCOME $ 38.53 $ 189.93 $ 63.57
Number of Units 112,147.1 112,147.1 112,147.1
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE YEARS ENDED DECEMBER 31, 1997
1997 1996 1995
<S> <C> <C> <C>
Cash flows from operating
activities:
Net Income $ 4,364,881 $ 21,515,257 $ 7,200,598
Adjustments to reconcile
net income to net
cash provided by/(used
in) operating
activities:
Services provided by
the General Partner 1,869,597 - -
Income from
discontinued (5,359,986) - -
operations
Gain on sale of
Discontinued
Television
and Radio Station - - (9,471,059)
Segment
Gain on sale of MVT (481,200) - -
Gain on sale of
IMP/Intelidata (159,901) - -
Gain on sale of
Western Wireless
Corporation stock - (22,843,249) -
</TABLE>
(Continued on the following page.)
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE YEARS ENDED DECEMBER 31, 1997
(continued)
1997 1996 1995
<S> <C> <C> <C>
Changes in operating
assets and liabilities:
Accounts payable and
accrued liabilities 4,724,900 120,309 820,684
Interest and other
receivables (32,619) (2,904) 3,866
Other assets - 86,041 446,681
Management fee payable - 2,144,597 -
Change in Net Liabilities
of Discontinued Operations
- Production Segment (58,912) (81,799) -
Net cash provided
by/(used in) operating
activities 4,866,760 938,252 (999,230)
</TABLE>
(Continued on the following page.)
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE YEARS ENDED DECEMBER 31, 1997
(continued)
1997 1996 1995
<S> <C> <C> <C>
Cash flows from investing
activities:
Proceeds from discontinued
operations 5,359,986 - -
Net proceeds from
sale of Western Wireless
Corporation stock - 24,147,088 -
Net proceeds from sale of
radio station WMXN-FM - - 3,334,013
Proceeds from sale of MVT 481,200 - -
Proceeds from sale of
IMP/Intelidata 159,901 - -
Net cash provided by
investing activities 6,001,087 24,147,088 3,334,013
</TABLE>
(Continued on the following page.)
<PAGE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE YEARS ENDED DECEMBER 31, 1997
(continued)
1997 1996 1995
<S> <C> <C> <C>
Cash flows from financing
activities:
Additional capital
contributions 23,744,989 - -
Cash distributions (23,671,989) (24,241,877) (2,945,275)
Net cash provided
by/(used in) financing
activities 73,000 (24,241,877) (2,945,275)
Net increase/(decrease)
in cash and cash
equivalents 10,940,847 843,463 (610,492)
Cash and cash
equivalents 2,383,444 1,539,981 2,150,473
at beginning of year
Cash and cash equiva-
lents at end of year $ 13,324,291 $ 2,383,444 $ 1,539,981
Cash paid for interest
by TCS $ 2,290,177 $ 1,269,914 $ 3,138,731
See Notes to Consolidated Financial Statements.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL/(DEFICIT)
FOR THE THREE YEARS ENDED DECEMBER 31, 1997
General Limited
Partner Partners Total
<S> <C> <C> <C>
1995:
Partners' Deficit
as of January 1, 1995 $ (9,668) $ (3,006,337) $ (3,016,005)
Net Income 72,006 7,128,592 7,200,598
Cash Distribution (29,453) (2,915,822) (2,945,275)
Partners' Capital
as of December 31,
1995 32,885 1,206,433 1,239,318
1996:
Net Income 215,153 21,300,104 21,515,257
Cash Distribution (242,419) (23,999,458) (24,241,877)
Partners'
Capital/(Deficit)
as of December 31,
1996 5,619 (1,492,921) (1,487,302)
1997:
Net Income 43,649 4,321,232 4,364,881
Additional capital
contributions 27,759,183 - 27,759,183
Transfer from General
Partner to Limited
Partners (27,718,311) 27,718,311 -
Cash Distribution - (23,671,989) (23,671,989)
Partners' Capital as
of December 31, 1997 $ 90,140 $ 6,874,633 $ 6,964,773
See Notes to Consolidated Financial Statements.
</TABLE>
ML MEDIA OPPORTUNITY PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE YEARS ENDED DECEMBER 31, 1997
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ML Media Opportunity Partners, L.P. (the "Partnership") was
formed and the Certificate of Limited Partnership was filed under
the Delaware Revised Uniform Limited Partnership Act on June 23,
1987. Operations commenced on March 23, 1988 with the first
closing of the sale of units of limited partnership interest
("Units"). Subscriptions for an aggregate of 112,147.1 Units
were accepted and are now outstanding.
Media Opportunity Management Partners (the "General Partner") is
a joint venture, organized as a general partnership under the
laws of the State of New York, between RP Opportunity Management,
L.P. ("RPOM"), a limited partnership under Delaware law, and ML
Opportunity Management Inc. ("MLOM"), a Delaware corporation and
an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc.
The General Partner was formed for the purpose of acting as
general partner of the Partnership. The General Partner's total
capital contribution amounted to $1,132,800 which represents 1%
of the total Partnership capital contributions.
Pursuant to the terms of the Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement"), the General
Partner is liable for all general obligations of the Partnership
to the extent not paid by the Partnership. The limited partners
are not liable for the obligations of the Partnership in excess
of the amount of their contributed capital.
The Partnership was formed to acquire, finance, hold, develop,
improve, maintain, operate, lease, sell, exchange, dispose of and
otherwise invest in and deal with media businesses and direct and
indirect interests therein. As of September 22, 1997, with the
closing of the sale of MV Technology Limited ("MVT"), the
Partnership disposed of its last Media Business (as defined in
the Partnership Agreement).
Reclassifications
Certain reclassifications were made to the 1996 and 1995
financial statements to conform with the current period's
presentation.
Basis of Accounting and Fiscal Year
The Partnership's records are maintained on the accrual basis of
accounting for financial reporting and tax purposes. Prior to
their dispositions, MVT and General Cellular Corporation
("GCC")/Western Wireless Corporation ("WWC") were accounted for
on the cost method of accounting. The fiscal year of the
Partnership is the calendar year.
See Note 3 regarding discontinued operations.
Fair Value of Financial Instruments
Statement of Financial Accounting Standards ("SFAS") No. 107,
"Disclosures about Fair Value of Financial Instruments", requires
companies to report the fair value of certain on- and off-balance
sheet assets and liabilities which are defined as financial
instruments.
Considerable judgment is required in interpreting data to develop
the estimates of fair value. Accordingly, the estimates
presented herein are not necessarily indicative of the amounts
that the Partnership could realize in a current market exchange.
The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair
value amounts.
Assets, including cash and cash equivalents and accounts
receivable and liabilities, such as trade payables, are carried
at amounts which approximate fair value.
Management Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Income Taxes
The Partnership accounts for income taxes pursuant to SFAS No.
109 "Accounting for Income Taxes". No provision for income taxes
has been made for the Partnership because all income and losses
are allocated to the partners for inclusion in their respective
tax returns. However, the Partnership owns certain entities
which are consolidated in the accompanying financial statements
which are taxable entities.
For entities owned by the Partnership which are consolidated in
the accompanying financial statements, SFAS No. 109 requires the
recognition of deferred income taxes for the tax consequences of
differences between the bases of assets and liabilities for
income tax and financial statement reporting, based on enacted
tax laws. Valuation allowances are established, when necessary,
to reduce deferred tax assets to the amount expected to be
realized. For the Partnership, SFAS No. 109 requires the
disclosure of the difference between the tax bases and the
reported amounts of the Partnership's assets and liabilities (see
Note 6).
Cash Equivalents
Short-term investments which have an original maturity of ninety
days or less are considered cash equivalents.
2. Liquidity and Summary of Investment Status
As of December 31, 1997 and 1996 the Partnership had $13,324,291
and $2,383,444 in cash and cash equivalents.
The only former investments as to which the Partnership retains
an obligation to advance funds relates to its former investments
in International Media Publishing, L.P. ("IMPLP"), International
Media Publishing Inc. ("IMPI"), Intelidata Limited
("Intelidata"), Paradigm Entertainment, L.P. ("Paradigm") and the
Windsor Systems, which in the aggregate equals approximately $1.4
million. In addition, certain obligations and contingent
liabilities of approximately $4.7 million relating to the sale of
the TCS stations remain outstanding. These amounts are recorded
as liabilities as of December 31, 1997 in the financial
statements of the Partnership. The Partnership is attempting to
resolve these obligations as soon as practicable.
As a result of the outstanding litigation, the Partnership
expects a delay in its liquidation (see Note 7).
On March 27, 1997, the Partnership received a voluntary cash
payment of $23,671,989 (the "Cash Payment") from Merrill Lynch
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), an
affiliate of the General Partner, for distribution to limited
partners. Pursuant to an amendment to the Partnership Agreement
dated March 24, 1997 (the "Amendment"), the Cash Payment was
distributable solely to limited partners. On April 2, 1997, the
Partnership distributed all the proceeds of the Cash Payment, or
$211.08 per $1,000 limited partnership unit ("Unit"), to limited
partners of record as of March 24, 1997. The Cash Payment has
been treated in the accompanying financial statements as a
capital contribution by the General Partner and simultaneously as
a transfer to the limited partners' capital.
Also, pursuant to the Amendment, the Partnership's obligation to
pay a Partnership Management Fee and a Property Management Fee
for 1996 and subsequent periods has been terminated. However,
the General Partner continued to provide services on behalf of
the Partnership. In accordance with the Amendment, the
Partnership has no obligation to pay for these services and will
not pay for such services. However, in accordance with generally
accepted accounting principles, for financial reporting purposes,
an amount equal to these services for 1997 of $1,869,597 has been
treated in the accompanying income statements as an expense with
a corresponding increase in General Partner's capital.
Similarly, an amount representing these services for 1996 of
$2,144,597 was treated as an increase in General Partner's
capital and a reduction of management fee payable in the
Partnership's first quarter 1997 financial statements. In
conjunction with the General Partner's capital increases
mentioned above, a transfer was made to the limited partners'
capital in an aggregate amount of $3,974,052 during 1997, which
represents the limited partners' share (99%) of the capital
contribution of such services. The foregoing expense and capital
transfer have no effect on the capital of the limited partners or
the General Partner.
In addition, in 1997, Merrill Lynch paid for certain expenses of
$73,000 on behalf of the Partnership which were incurred by the
Partnership in 1996. In accordance with generally accepted
accounting principles, for financial reporting purposes, such
amount was treated in the 1996 statement of operations as an
expense of the Partnership and, when payment was made in 1997, as
an increase in General Partner's capital. Simultaneously with
the payment, a transfer was made to the limited partners' capital
in an amount of $72,270, which represents the limited partners'
share (99%) of the amount of such expenses. The foregoing
capital transactions increased capital of the General Partner and
the limited partners in an amount corresponding to the decreases
to capital recorded for such expenses in 1996. Thus, there was
no effect on the General Partner or the limited partners'
capital.
TCS Television Partners, L.P.
On September 15, 1995, TCS Television Inc. ("TCS Inc.").
completed the sale to The Spartan Radiocasting Company
("Spartan") of all of the outstanding capital stock of Avant
Development Corporation ("Avant"), a 100% owned corporate
subsidiary of TCS Inc., which owned WRBL-TV, for a net sales
price of $22.7 million. From the proceeds of the sale, a reserve
of approximately $1.4 million was established to cover certain
expenses and liabilities relating to the sale and $1,250,000 was
deposited into an indemnity escrow account to secure TCS Inc.'s
indemnification obligations to Spartan for taxes and other
liabilities. In addition, approximately $18.9 million was
applied to repay a portion of TCS Television Partners, L.P.'s
("TCS") total indebtedness, which was secured by a pledge of the
shares of Fabri Development Corporation ("Fabri"). Approximately
$1.1 million was applied to closing costs. The Partnership
recognized a gain, for financial reporting purposes, on the sale
of Avant of approximately $17.6 million, partially offset by a
reserve for estimated losses on such future sale of the remaining
television stations of TCS of approximately $9.9 million (see
Note 3). During 1997, $1 million plus accrued interest of
approximately $74,000 was returned to TCS from the indemnity
escrow related to the sale of Avant.
TCS entered into an agreement (the "Sub-Debt Proceeds Sharing
Agreement") dated September 17, 1996, with the holders of its
subordinated debt under which the lenders agreed that TCS would
be entitled to share in the net proceeds of the sale of such TCS
stations in accordance with a formula set forth in such
agreement.
On April 15, 1997, TCS and TCS Inc. (jointly, the "Sellers"),
completed the sale to Nexstar Broadcasting Group, L.L.C.,
("Nexstar") of all of the outstanding capital stock of Fabri.
Fabri, a 100% owned corporate subsidiary of TCS Inc., owned two
television stations, WTWO-TV in Terre Haute, Indiana and KQTV in
St. Joseph, Missouri. Before the consummation of the sale,
Nexstar assigned its rights under the Stock Purchase Agreement
(the "Stock Purchase Agreement") to Nexstar Broadcasting of the
Midwest Inc. The base purchase price for the outstanding shares
of Fabri was $31,323,922 after a working capital adjustment.
Pursuant to the terms of the Stock Purchase Agreement and the Sub-
Debt Proceeds Sharing Agreement, after application of the
proceeds generated by the sale to the payment of transaction
expenses resulting from the sale and to the establishment of two
separate escrow accounts totaling $1,750,000, the remaining
proceeds received from the sale were applied as follows:
$23,757,072 to repay certain amounts to TCS's lenders; $1,022,534
to repay outstanding principal and accrued interest on a loan
made to TCS by the Partnership; and $2,604,601 and $1,736,400 to
pay the Partnership and Commonwealth Capital Partners, L.P.,
respectively, their share of certain accrued and unpaid
consulting fees. During 1997 and early 1998, $1,750,000 plus
accrued interest of approximately $63,000 was returned to TCS
from escrows related to the sale of Fabri. The escrow accounts
are included in cash and cash equivalents as of December 31,
1997, in the accompanying financial statements. The Partnership
recorded income of $5,359,986 during 1997 (see Note 4) related to
the sale of TCS.
Refer to Note 4 for further information regarding TCS's debt.
Investments and EMP, Ltd. and MVT
Effective August 12, 1994, the Partnership owned 13.8% of the
issued common shares of MVT, while EMP, Ltd. owned the remaining
86.2%. MVT's purpose was to manage its sole asset, a 10%
interest in Teletext, a United Kingdom corporation organized to
acquire United Kingdom franchising rights to provide data in text
form to television viewers via television broadcast sidebands.
The Partnership had held an indirect 1.38% interest in Teletext.
MVT paid an annual fee to EMP, Ltd. for management services
provided by EMP, Ltd. in connection with overseeing MVT's
investment in Teletext. Following the restructuring, the
Partnership no longer had any interest in EMP, Ltd.
In January, 1996, EMP, Ltd. exercised its right to require the
Partnership to sell its interest in MVT to EMP, Ltd. and notified
the Partnership of its intention to acquire the Partnership's
interest. On September 22, 1997, the Partnership, pursuant to
the option exercised by EMP, Ltd., completed the sale of its
remaining investment, a restructed 13.8% ownership interest in
MVT for approximately $481,000.
During 1995 and 1996, the Partnership received approximately
$108,000 and $87,000, respectively, in dividends from MVT.
Maryland Cable
During 1995, the Partnership received an additional management
fee of $128,212 for managing the Maryland Cable Systems from
January 1, 1994 through September 30, 1994. The Maryland Cable
Systems were disposed of by the Partnership in 1994.
Sale of Windsor
On May 18, 1994, the Partnership sold the assets of its cable
television systems in North Carolina (the "Windsor Systems") for
$3,443,200, subject to post-closing adjustments. At closing, the
Partnership repaid the $2,050,058 of principal and interest then
due under the Windsor Note, as required by the terms of the
Windsor Note. In addition, as required by the Asset Purchase
Agreement, at closing, $342,160 (the "Escrowed Monies") was
placed into two separate escrow accounts to cover the potential
costs of improving pole attachments and other possible post-
closing expenses. The remaining $1,050,982 in sales proceeds was
applied or reserved to pay closing costs of the transaction and
certain pre-closing liabilities to third parties other than the
buyer. As of December 31, 1997, such reserved amounts are
reflected as liabilities in the Consolidated Balance Sheet.
On August 29, 1996, approximately $190,000 was received by the
Partnership as final settlement for post-closing adjustments
related to the sale of the Windsor Systems. As of September 30,
1996, Escrowed Monies of approximately $279,000 plus
approximately $34,000 of interest was received by the Partnership
in full settlement of the post-closing expense escrow. In
addition, Escrowed Monies of approximately $63,000 plus
approximately $8,000 of interest was distributed to the buyer in
full settlement of the pole attachment escrow. As of December
31, 1996, no further amounts related to the Windsor Systems
remain in escrow.
The Partnership recognized a gain of approximately $469,000 in
1996 for settlement of escrows and other post-closing adjustments
related to the sale of the Windsor Systems.
Sale of WMXN-FM
On February 21, 1995, US Radio of Norfolk, Inc. purchased WMXN-FM
for approximately $3.5 million. Following payment of a
transaction fee to a third party unaffiliated with the
Partnership and/or its affiliates, approximately $3.3 million was
remitted to the Partnership. The Partnership recognized a gain
of $1.7 million for financial reporting purposes in 1995 on the
sale of WMXN-FM.
Disposition of WWC
On May 29, 1996, the Partnership sold all of its 1,090,162 shares
of WWC at a price of $23.50 per share in an initial public
offering of shares of common stock of WWC. The 1,090,162 shares
of WWC sold by the Partnership represented all of the shares held
by the Partnership, after giving effect to a 3.1 to 1 stock split
immediately prior to the offering. As a result, on May 29, 1996,
the Partnership received $24,147,088 in net proceeds for its
1,090,162 shares, after payment of underwriter's commission in
connection with the sale. The Partnership recognized a gain of
approximately $22.8 million on the sale of its WWC stock.
On July 29, 1996, the Partnership made a cash distribution to
limited partners of record on May 31, 1996, of $214 per Unit
totaling $23,999,458 and $242,419 to the General Partner of net
distributable sale proceeds from the sale of its stock of WWC and
the remaining interests in films and other projects developed by
Paradigm (see below).
Disposition of IMPLP/IMPI and Intelidata
Effective July 1, 1993, the Partnership entered into three
transactions to sell the business and assets of IMPLP and its
wholly owned subsidiary IMPI and Intelidata. In two separate
transactions, the Partnership sold the entire business and
substantially all of the assets of IMPLP/IMPI and a portion of
the business and assets of Intelidata to Phillips Business
Information, Inc. ("PBI") for future consideration based on the
revenues of IMPLP/IMPI and the portion of the Intelidata business
acquired by PBI. At closing, PBI made advances of $100,000 and
$150,000 to IMPLP/IMPI and Intelidata, respectively, which
advances would be recoverable by PBI from any future
consideration payable by PBI to the Partnership. In addition,
PBI agreed to assume certain liabilities of IMPLP/IMPI and
Intelidata.
In a third transaction, the Partnership sold the remaining
business and assets of Intelidata, which were not sold to PBI, to
Romtec plc. ("Romtec") in exchange for future consideration,
based on both the amount of assets and liabilities transferred to
Romtec and the combined profits of the portion of the Intelidata
business acquired by Romtec and another, existing division of
Romtec. In addition, certain liabilities of Intelidata were
assumed by Romtec. During 1997, it was determined that no
consideration would be payable from the sale to Romtec. As a
result of the above activity, the Partnership has no remaining
interests in IMP/Intelidata.
Subsequent to the sale of the businesses, the Partnership
advanced net additional funds totaling approximately $130,000
through December 31, 1997 to IMPLP/IMPI and Intelidata to fund
cash shortfalls resulting from the pre-sale claims of certain
creditors. The Partnership anticipates that it will make
additional such advances to IMPLP/IMPI and Intelidata during
1998. These obligations are reflected as a liability in the
Partnership's Consolidated Balance Sheet as of December 31, 1997.
On August 27, 1997, the Partnership received and recognized a
gain for financial reporting purposes of approximately $160,000
representing the final deferred sale payment arising from the
July 1, 1993 sale of its interest in IMPLP and Intelidata. These
funds represented the contractual royalty fee for sales generated
by Intelidata since the 1993 sale.
Paradigm/BBAD
During 1996, the Partnership received $135,000 from Paradigm's
sale of the Partnership's remaining interests in the films and
other projects developed by Paradigm. The Partnership recognized
a gain for financial reporting purposes of $135,000 on the sale
of the films and other projects in 1996, offset by operational
losses of $53,201. Although the Partnership is no longer
advancing funds for continuing operations and Paradigm has no
operating assets, the Partnership may be liable for certain
liabilities of Paradigm. These liabilities are reflected in the
Consolidated Balance Sheet as of December 31, 1997.
3. DISCONTINUED OPERATIONS
Production Segment
Although the Partnership disposed of its remaining interest in
films and other projects owned by Paradigm in 1996, the
Partnership may be liable for certain liabilities of Paradigm.
As of December 31, 1997, the Partnership has consolidated the
remaining cash and liabilities of Paradigm.
<PAGE>
During 1996, the Partnership's Production Segment was presented
as discontinued operations. (see Note 2). The net liabilities of
the discontinued operations of the Production Segment on the
Consolidated Balance Sheet as of December 31, 1996 are comprised
of the following:
<TABLE>
<CAPTION>
<S> <C>
Cash $ 65,082
Accounts payable and accrued liabilities (123,994)
Net liabilities of discontinued operations $ (58,912)
</TABLE>
In 1996, the Partnership recorded a gain of $135,000 on the sale
of films and other projects owned by Paradigm offset by
operational losses of $53,201 (see Note 2).
Summarized results of the discontinued operations of the
Production Segment on the Consolidated Income Statement for the
year ended December 31, 1996 are as follows:
<TABLE>
<CAPTION>
<S> <C>
Operating Revenues $158,468
Less: Operating Expenses 59,956
Operating Income 98,512
Minority Interest (16,713)
Income from discontinued operations $ 81,799
</TABLE>
Television and Radio Station Segment
During 1997, the Partnership disposed of its remaining operating
properties in the Television and Radio Station Segment. The
Partnership still retains an interest in the remaining assets of
TCS.
During 1996, the Partnership presented its Television and Radio
Station Segment as discontinued operations. The Partnership sold
two of its stations in 1995 and the remaining two stations in
1997 (see Note 2).
The net liabilities of discontinued operations of the Television
and Radio Station Segment on the Consolidated Balance Sheet as of
December 31, 1996 are comprised of the following:
<TABLE>
<CAPTION>
<S> <C>
Property, plant and equipment, net
$ 2,856,611
Intangible assets, net 27,791,054
Other assets 8,493,912
Borrowings (See Note 4) (22,106,254)
Other liabilities (17,035,323)
Net liabilities of discontinued
operations $ 0
</TABLE>
Included in 1996 net liabilities of discontinued operations was
the reserve established for expected losses on the disposition of
the then remaining stations which comprised the Television and
Radio Station Segment (inclusive of expected operating losses
through the date of disposal) (see Note 2).
<PAGE>
The Partnership recorded a gain of $1,684,328 on the sale of WMXN-
FM during the first quarter of 1995 (see Note 2). In addition,
the Partnership recognized a gain, for financial reporting
purposes, on the sale of Avant of approximately $17.7 million,
offset by a reserve for estimated losses on the sale of the
remaining television stations of TCS for approximately $9.9
million. During 1997, the Partnership recorded income of
$5,359,986 during 1997 as a result of the sale of the remaining
TCS television stations (see Note 2).
4. BORROWINGS
The aggregate amount of borrowings reflected on the Consolidated
Balance Sheet as of December 31, 1996 of the Partnership
(included in the net liabilities of discontinued operations of
the Television and Radio Station Segment) is as follows:
<TABLE>
<CAPTION>
<S> <C>
Senior Secured Notes-TCS $ 10,779,450
Senior Secured Subordinated Notes-
TCS 11,326,804
$ 22,106,254
</TABLE>
The Senior Secured Notes totaled $10,779,450 as of December 31,
1996 and accrued interest at the rate of 10.69% per annum. The
Senior Secured Subordinated Notes totaled $11,326,804 as of
December 31, 1996 and accrued interest at the rate of 12.69% per
annum compounded quarterly.
TCS entered into an agreement (the "Sub-Debt Proceeds Sharing
Agreement") dated September 17, 1996 with the holders of its
subordinated debt under which the lenders agreed that TCS would
be entitled to share in the net proceeds of the sale of the TCS
stations in accordance with a formula set forth in such
agreement. In accordance with the Sub-Debt Proceeds Sharing
Agreement, TCS used a portion of the sales proceeds to pay down
the outstanding borrowings (see Note 2).
5. TRANSACTIONS WITH THE GENERAL PARTNER AND ITS AFFILIATES
During the three years ended December 31, 1997, the General
Partner provided the following services to the Partnership:
<TABLE> For the Year For the Year For the Year
Ended Ended Ended
<CAPTION> December 31, December 31, December 31,
1997 1996 1995
<S> <C> <C> <C>
Media Opportunity Management
Partners (General Partner):
Partnership Management Fee $ 943,391 $ 913,253 $ 884,080
Property Management Fee 926,206 1,231,344 1,499,986
$1,869,597 $2,144,597 $2,384,066
</TABLE>
During the first quarter of 1997, the Partnership's obligation to
pay a management fee as of December 31, 1996 or thereafter was
terminated. The Partnership did not pay the General Partner a
management fee for 1996 or 1997 (see Note 2).
In addition, RP Television, an affiliate of the General Partner,
provided certain administrative and accounting services to the
television stations owned by TCS. The television stations paid
for these services at cost. The reimbursed cost incurred by RP
Television on behalf of TCS totaled approximately $109,000,
$238,000 and $279,000 for 1997, 1996 and 1995, respectively.
These reimbursed costs are included in the Consolidated Income
Statements.
6. ACCOUNTING FOR INCOME TAXES
Certain entities owned by the Partnership were taxable entities
and thus were required under SFAS No. 109 to recognize deferred
income taxes. During 1997, the Partnership disposed of its last
taxable entity. Therefore, as of December 31, 1997, the only
entities remaining are classified as partnerships for tax
purposes. Hence, all items of income and deductions at the
Partnership level will flow up to the partners of the Partnership
and there will be no income tax liability imposed at the
Partnership level. Additionally, since all the taxable entities
have been liquidated, there is no deferred tax asset or liability
as of December 31,1997. The components of the net deferred tax
asset (included in the net liabilities of discontinued operations
in the accompanying Consolidated Balance Sheet) as of December
31, 1996 are as follows:
<TABLE>
<CAPTION>
<S> <C>
Deferred tax assets:
Net operating loss carryforward
$ 1,267,827
Allowance for doubtful accounts
52,848
1,320,675
Deferred tax liabilities:
Basis of property, plant and
equipment (530,047)
Total 790,628
Less: valuation allowance (790,628)
Net deferred tax asset $ 0
</TABLE>
For the Partnership, the differences between the tax bases of
assets and liabilities and the reported amounts are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
As of As of
December 31, December 31,
1997 1996
Partners' Capital/(Deficit) -
financial statements $ 6,964,773 $(1,487,302)
Differences:
Offering expenses 11,346,156 11,346,156
Basis of property, plant and equipment
and intangible assets
4,206,605 4,206,605
Cumulative (income)/losses of stock
investments (corporations) (12,542,110) 2,032,195
Management fees 4,176,677 4,176,677
Other 6,425,298 7,110,273
Partners' Capital - income tax basis
$20,577,399 $27,384,604
</TABLE>
7. 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 General
Partner, the General Partner's two partners, MLOM and RPOM,
Merrill Lynch & Co., Inc. and 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 RPOM.
Specifically, the plaintiffs allege breach of the Partnership
Agreement, breach of fiduciary duties and unjust enrichment by
the General Partner in that the General Partner allegedly: (1)
improperly failed to return to plaintiffs and the alleged class
members certain uninvested capital contributions in the amount of
$18.5 million (less certain reserves), (2) improperly paid itself
management fees in the amount of $18.3 million, and (3)
improperly paid MultiVision Cable TV Corp., an affiliate of RPOM,
supposedly duplicative management fees in an amount in excess of
$6 million. In addition, plaintiffs assert a claim for quantum
meruit, seeking credit for, and counsel fees based on, the
benefit supposedly received by the limited partners as a result
of a voluntary payment by Merrill Lynch to the Partnership in
March 1997 in the amount of approximately $23 million,
representing management fees, certain expenses, and interest paid
by the Partnership to the General Partner since April 1990.
With respect to Merrill Lynch & Co., Inc., Merrill Lynch, MLOM
and RPOM, 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, return of uninvested capital
contributions, counsel fees, and compensatory and punitive
damages. On December 12, 1997, defendants served a motion to
dismiss the complaint and each claim for relief therein.
Plaintiffs' response to defendants' motion was served on March
20, 1998. Defendants' reply to plaintiffs' response is due on
April 29, 1998. Defendants believe that they have good and
meritorious defenses to the action.
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 suit 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 RPOM, MLOM or the General Partner, subject to
specified conditions. In connection with the purported class
action noted above, the Partnership has received notices of
requests for indemnification from the following defendants named
therein: the General Partner, MLOM, RPOM, Merrill Lynch Co.,
Inc., and Merrill Lynch. As of December 31, 1997, the
Partnership accrued approximately $160,000 for legal costs
incurred through December 31, 1997, relating to such
indemnification.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
Part III.
Item 10. Directors and Executive Officers of the Registrant
Registrant has no executive officers or directors. The General
Partner manages Registrant's affairs and has general
responsibility and authority in all matters affecting its
business. The responsibilities of the General Partner are
carried out either by executive officers of EHR Opportunity
Management, Inc. and IMP Opportunity Management, Inc. as general
partners of RP Opportunity Management, L.P. or executive officers
of ML Opportunity Management Inc. acting on behalf of the General
Partner. The executive officers and directors of RP Opportunity
Management, L.P. and ML Opportunity Management Inc. are:
RP Opportunity Management, L.P. (the "Management Company or
"RPOM")
Served in Present
Name Capacity Since (1) Position Held
Director and President
I. Martin Pompadur 6/15/87 IMP Opportunity Management
Executive Vice President
Elizabeth McNey Yates 4/01/88 IMP Opportunity Management
(1) The Director holds office until a successor is elected and
qualified. All executive officers serve at the pleasure of
the Director.
ML Opportunity Management Inc. ("MLOM")
Served in Present
Name Capacity Since (1) Position Held
Kevin K. Albert 2/19/91 President
6/22/87 Director
Robert F. Aufenanger 2/02/93 Executive Vice President
3/28/88 Director
Michael E. Lurie 8/10/95 Vice President
8/11/95 Director
Steven N. Baumgarten 3/07/94 Vice President
David G. Cohen 8/11/95 Vice President
Diane T. Herte 8/11/95 Treasurer
(1) Directors hold office until their successors are elected and
qualified. All executive officers serve at the pleasure of
the Board of Directors.
I. Martin Pompadur, 62, Director and President of RP Opportunity
Management, L.P. Mr. Pompadur is also the Chairman and Chief
Executive Officer of GP Station Partners which is the General
Partner of Television Station Partners, L.P., a private limited
partnership that owned and operated four network affiliated
television stations. These stations were sold in January 1996
and this partnership is currently in its liquidation phase. Mr.
Pompadur is the Chairman and Chief Executive Officer of PBTV,
Inc., the Managing General Partner of Northeastern Television
Investors Limited Partnership, a private limited partnership
which owned and operated WBRE-TV, a network affiliated station in
Wilkes-Barre/Scranton, Pennsylvania. This station was sold in
January 1998 and is currently in its liquidation phase. Mr.
Pompadur is also the President and a Director of RP Media
Management ("RPMM"), a joint venture which is a partner in Media
Management Partners ("MMP"), an affiliate of the General Partner
and the general partner of ML Media Partners, L.P.("ML Media")
which presently owns cable television systems and several radio
stations. Mr. Pompadur was the Principal Executive Officer and
principal owner of RP Radio Management Inc.("RP Radio"), a
company owned principally by Mr. Pompadur to provide
administrative and day-to-day management services to ML Media's
radio properties. On December 27, 1997, RP Radio Management Inc.
was merged into RP Radio Management LLC, an entity wholly owned
by ML Media. Mr. Pompadur is also Chief Executive Officer of
MultiVision Cable TV Corp. ("MultiVision"), a cable television
multiple system operator ("MSO") organized in January 1988 and
owned principally by Mr. Pompadur and the estate of Elton H. Rule
to provide MSO services to cable television systems acquired by
entities under his control. Mr. Pompadur is a principal owner,
member of the Board of Directors and Secretary of Caribbean
International News Corporation ("Caribbean"). Caribbean owns and
publishes EL Vocero, the largest Spanish language daily newspaper
in the United States.
Elizabeth McNey Yates, 34, Executive Vice President of RP
Opportunity Management, L.P., joined RP Companies Inc., an entity
controlled by Mr. Pompadur, in April 1988 and has senior
executive responsibilities in the areas of finance, operations,
administration, acquisitions and dispositions. Ms. Yates is
Chief Operating Officer and Executive Vice President of RP
Companies, Inc., Executive Vice President of RPMM, Chief
Operating Officer and Executive Vice President of RP Radio. In
addition, Ms Yates is the President and Chief Operating Officer
of MultiVision.
Kevin K. Albert, 45, a Managing Director of Merrill Lynch
Investment Banking Group ("ML Investment Banking"), joined
Merrill Lynch in 1981. Mr. Albert works in the Equity Private
Placement Group and is involved in structuring and placing a
diversified array of private equity financing including common
stock, preferred stock, limited partnership interests and other
equity-related securities. Mr. Albert is also a director of ML
Media Management Inc. ("ML Media"), an affiliate of MLOM and a
joint venturer of Media Management Partners, the general partner
of ML Media Partners, L.P.; a director of ML Film Entertainment
Inc. ("ML Film"), an affiliate of MLOM and the managing general
partner of the general partners of Delphi Film Associates IV, V
and ML Delphi Premier Partners, L.P.; a director of ML Mezzanine
II Inc. ("ML Mezzanine II"), an affiliate of MLOM and sole
general partner of the managing general partner of ML-Lee
Acquisition Fund II, L.P. and ML-Lee Acquisition Fund (Retirement
Accounts) II, L.P.; a director of ML Mezzanine Inc. ("ML
Mezzanine"), an affiliate of MLOM and the sole general partner of
the managing general partner of ML-Lee Acquisition Fund, L.P.; a
director of Merrill Lynch Venture Capital Inc. ("ML Venture"), an
affiliate of MLOM and the general partner of the Managing General
Partner of ML Venture Partners II, L.P. ("Venture II") and ML
Oklahoma Venture Partners Limited Partnership ("Oklahoma"); and a
director of Merrill Lynch R&D Management Inc. ("ML R&D"), an
affiliate of MLOM and the general partner of the General Partner
of ML Technology Ventures, L.P.; Mr. Albert also serves as an
independent general partner of Venture II.
Robert F. Aufenanger, 44, a Vice President of Merrill Lynch & Co.
Corporate Credit and a Director of the Partnership Management
Department, joined Merrill Lynch in 1980. Mr. Aufenanger is
responsible for the ongoing management of the operations of
various real estate and project related limited partnerships for
which subsidiaries of ML Leasing Equipment Corp. and Merrill
Lynch, Hubbard Inc., affiliates of Merrill Lynch, are general
partners. Mr. Aufenanger is also a director of ML Media, MLH
Real Estate Inc., an affiliate of MLOM and the general partner of
the Associate General Partner of ML/EQ Real Estate Portfolio,
L.P., MLH Property Managers Inc., an affiliate of MLOM and the
Managing General Partner of MLH Income Realty Partnership VI, ML
Film, ML Venture, ML R&D, ML Mezzanine and ML Mezzanine II.
Michael E. Lurie, 54, a First Vice President of Merrill Lynch &
Co. Corporate Credit and the Director of the Asset Recovery
Management Department, joined Merrill Lynch in 1970. Prior to
his present position, Mr. Lurie was the Director of Debt and
Equity Markets Credit responsible for the global allocation of
credit limits and the approval and structuring of specific
transactions relating to debt and equity products. Mr. Lurie
also served as Chairman of the Merrill Lynch International Bank
Credit Committee. Mr. Lurie is also a director of ML Media, ML
Film, ML Venture, ML R&D and MLH Real Estate Inc.
Steven N. Baumgarten, 42, a Vice President of Merrill Lynch & Co.
Corporate Credit joined Merrill Lynch in 1986. Mr. Baumgarten
shares responsibility for the ongoing management of the
operations of various project related limited partnerships for
which subsidiaries of ML Leasing Equipment Corp., an affiliate of
Merrill Lynch, are general partners. Mr. Baumgarten is also a
director of ML Film.
David G. Cohen, 35, a Vice President of Merrill Lynch & Co.
Corporate Credit joined Merrill Lynch in 1987. Mr. Cohen shares
responsibility for the ongoing management of the operations of
various project related limited partnerships for which
subsidiaries of ML Leasing Equipment Corp., an affiliate of
Merrill Lynch, are general partners.
Diane T. Herte, 37, a Vice President of Merrill Lynch & Co.
Investment Banking Group since 1996 and previously an Assistant
Vice President of Merrill Lynch & Co. Corporate Credit Group
since 1992, joined Merrill Lynch in 1984. Ms. Herte's
responsibilities include controllership and financial management
functions for certain partnerships and other entities for which
subsidiaries of Merrill Lynch are the general partner, manager or
administrator.
Mr. Pompadur and Ms. Yates were each executive officers of
Maryland Cable Corp. and Maryland Cable Holdings Corp. at and
during the two years prior to the filing by both companies on
March 10, 1994 of a consolidated plan of reorganization under
Chapter 11 of the United States Bankruptcy Code with the United
States Bankruptcy Court for the Southern District of New York.
For more information regarding such filings, refer to "Item 1.
Business -- Maryland Cable Corp.".
Mr. Aufenanger is an executive officer of Mid-Miami Diagnostics
Inc. ("Mid-Miami Inc."). On October 28, 1994 both Mid-Miami Inc.
and Mid-Miami Diagnostics, L.P. filed voluntary petitions for
protection from creditors under Chapter 7 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the
Southern District of New York.
An Investment Committee of Registrant was established to have the
responsibility and authority for developing, in conjunction with
the Management Company, diversification objectives for the
investments to be made by Registrant, for reviewing and approving
each investment proposed by the Management Company for Registrant
and for evaluating and approving dispositions of investments of
Registrant. The Investment Committee will also establish
reserves for Registrant for such purposes and in such amounts as
it deems appropriate. A simple majority vote shall be required
for any proposed investment or disposition. The Investment
Committee also has the responsibility and authority for
monitoring the management of the investments of Registrant by the
Management Company.
The current members of the Investment Committee are as follows:
RPOM Representative MLOM Representatives
I. Martin Pompadur Kevin K. Albert
Robert F. Aufenanger
Item 11. Executive Compensation.
Registrant does not pay the executive officers or directors of
the General Partner any remuneration. The General Partner does
not presently pay any remuneration to any of its executive
officers or directors. See Note 5 to the Financial Statements
included in Item 8 hereof, however, for amounts paid by
Registrant to the General Partner and its affiliates for the
three years ended December 31, 1997.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
As of February 5, 1998, no person was known by the Registrant to
be the beneficial owner of more than 5 percent of the Units.
To the knowledge of the General Partner, as of February 5, 1998,
the officers and directors of the General Partner in aggregate
own less than 1% of the outstanding common stock of Merrill Lynch
& Co., Inc.
RP Opportunity Management, L.P. ("RPOM") is organized as a
limited partnership, the general partners of which are EHR
Opportunity Management, Inc., and IMP Opportunity Management,
Inc. IMP Opportunity Management, Inc. is wholly-owned by Mr. I.
Martin Pompadur and EHR Opportunity Management, Inc. is wholly-
owned by The Rule Trust.
Item 13. Certain Relationships and Related Transactions.
Refer to Note 5 to the Financial Statements included in Item 8
hereof, and in Item 1 for a description of the relationship of
the General Partner and its affiliates to Registrant and its
subsidiaries.
Part IV.
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
(a) Financial Statements, Financial Statement Schedules and
Exhibits.
(1) Financial Statements
See Item 8. "Financial Statements and Supplementary
Data."
(2) Financial Statement Schedules
No financial statement schedules are included
because of the absence of the conditions which
require their inclusion or because the required
information is included in the financial statement
or set forth herein the notes thereto.
(3) Exhibits
<TABLE>
<CAPTION>
Exhibits Incorporated by Reference to
<C> <C>
3.1 Certificate of Limited Exhibit 3.1 to Registrant's
Partnership Form S-1 the Registration
Statement
(File No. 33-15502)
3.2 Amended and Restated Agreement of Exhibit 3.2 to Registrant's
Limited Partnership Annual Report on Form 10-K
for the fiscal year ended
December 31, 1987
(File No. 33-15502)
3.3 Amendment No. 1 to Amended and Exhibit 3.3 to Registrant's
Restated Agreement of Limited Annual Report on Form 10-K
Partnership for the fiscal year ended
December 31, 1996
(File No. 0-16690)
10.1.1 Exchange Agreement dated December Exhibit 10.1 to Registrant's
31, 1993 Form 8-K Report dated
January 12, 1994
(File No. 33-15502)
10.1.2 Consolidated Prepackaged Plan of Exhibit to Registrant's Form
Reorganization of Maryland Cable 8-K Report dated March 10,
Corp. and Maryland Cable Holdings 1994
Corp. (File No. 33-15502)
10.1.3 Letter Agreement to Purchase and Exhibit 10.1 to Registrant's
Sell all of the Assets of the Annual Report on Form 10-K
community antenna television for the fiscal year ended
systems owned by Windsor December 31, 1988
Cablevision, Inc. between (File No. 33-15502)
Williamston Cable Television,
Inc. and Windsor Cablevision,
Inc. dated as of March 7, 1988
10.1.4 Agreement between TCS, Exhibit 10.1 to Registrant's
Registrant, Commonwealth Capital Form 8-K Report dated
Partners, L.P., and other December 14, 1992
parties, dated December 14, 1992 (File No. 0-16690)
10.1.5 Management Agreement dated as of Exhibit 10.1.1 to
June 30, 1992 between ML Media Registrant's Annual Report on
Opportunity Partners, L.P. and Form 10-K for the fiscal year
Cablevision Systems Corporation ended December 31, 1992
(File No. 0-16690)
10.2 Promissory Note from Williamston Exhibit 10.2 to Registrant's
Cable Television, Inc. to Windsor Annual Report on Form 10-K
Cablevision, Inc. for the fiscal year ended
December 31, 1988
(File No. 33-15502)
10.2.0 Services Agreement between Exhibit 10.2 to Registrant's
Registrant, TCS Management Corp., Form 8-K Report dated
and Commonwealth Capital December 14, 1992
Partners, L.P., dated December (File 0-16690)
14, 1992
10.2.1 Asset Purchase Agreement dated Exhibit 10.2.1 to
November 16, 1993 between Tar Registrant's Quarterly Report
River Communications, Inc. and on Form 10-Q for the quarter
Registrant ended September 30, 1993
(File No. 0-16690)
10.3.1 Securities Purchase Agreement Exhibit 28.1 to Registrant's
dated May 13, 1988 relating to Quarterly Report on Form 10-Q
Prime Cable Systems for the quarter ended
June 30, 1988
(File No. 0-16690)
10.3.2 Amendment No. 1 to Securities Exhibit 2(b) to Amendment No.
Purchase Agreement, dated as of 2 to the Registration
October 21, 1988 Statement of Maryland Cable
Corp.
(File No. 33-23679)
10.3.3 Amendment No. 2 to Securities Exhibit 2(c) to Maryland
Purchase Agreement, dated as of Cable Corp.'s Annual Report
October 28, 1988 on Form 10-K for the fiscal
year ended December 31, 1989
(File No. 33-23679)
10.3.4 Purchase and Sale Agreement dated Exhibit 10.3.4 to
January 22, 1993 between Maryland Registrant's Annual Report on
Cable Corp. and Benchmark Form 10-K for the fiscal year
Acquisition Fund I Limited ended December 31, 1992
Partnership (File No. 0-16690)
10.4 Credit Agreement dated November Exhibit 28.2 to Registrant's
4, 1988 between Maryland Cable Quarterly Report on Form 10-Q
Corp., and Citibank, N.A., as for the quarter ended
agent June 30, 1988
(File No. 0-16690)
10.5 Maryland Cable Corp. to Security Exhibit 4(a) to Maryland
Pacific National Trust Company Cable Corp.'s Annual Report
(New York) Trustee - Indenture on Form 10-K for the fiscal
Dated as of November 15, 1988 - year ended December 31, 1989
$162,406,000 Senior Subordinated (File No. 33-23679)
Discount Notes due 1988
10.6 Asset Purchase Agreement dated Exhibit 10.6 to Registrant's
December 21, 1988 by and between Annual Report on Form 10-K
CBN Continental Broadcasting for the fiscal year ended
Network, Inc., and ML Media December 31, 1988
Opportunity Partners, L.P. (File No. 33-15502)
10.7 Agency and Cost Allocation Exhibit 10(a) to Maryland
Agreement, as amended Cable Corp.'s Annual Report
on Form 10-K for the fiscal
year ended December 31, 1989
(File No. 33-23679)
10.8 Fee Sharing Agreement between ML Exhibit 10(b) to Maryland
Media Opportunity Partners, L.P. Cable Corp.'s Annual Report
and Maryland Cable Corp. on Form 10-K for the fiscal
year ended December 31, 1989
(File No. 33-23679)
10.9 Subordination Agreement by and Exhibit 28(a) to Maryland
among ML Media Opportunity Cable Corp.'s Annual Report
Partners, L.P., Maryland Cable on Form 10-K for the fiscal
Corp. and Security Pacific year ended December 31, 1989
National Trust Company (New York) (File No. 33-23679)
as trustee
10.10.1Guaranty of Cellular Holdings, Exhibit 10.10.1 to
Inc. dated May 19, 1989 Registrant's Quarterly Report
on Form 10-Q for the quarter
ended June 30, 1989
(File No. 0-16690)
10.10.2Security and Pledge Agreement Exhibit 10.10.2 to
between Cellular Holdings, Inc. Registrant's Quarterly Report
and ML Media Opportunity on Form 10-Q for the quarter
Partners, L.P. dated as of May ended June 30, 1989
19, 1989 (File No. 0-16690)
10.10.3Subscription and Purchase Exhibit 10.10.3 to
Agreement 666,667 shares of Registrant's Quarterly Report
Series A Convertible Preferred on Form 10-Q for the quarter
Stock of General Cellular Corp. ended June 30, 1989
Dated as of May 19, 1989 (File No. 0-16690)
10.10.4Certificate of Designations, Exhibit 10.10.4 to
Preferences, and Relative Rights Registrant's Quarterly Report
of Series A Convertible Preferred on Form 10-Q for the quarter
Stock of General Cellular ended June 30, 1989
Corporation (File No. 0-16690)
10.10.5Registration Rights Agreement Exhibit 10.10.5 to
Dated as of May 19, 1989 between Registrant's Quarterly Report
General Cellular Corp. and ML on Form 10-Q for the quarter
Media Opportunity Partners, L.P. ended June 30, 1989
(File No. 0-16690)
10.11 Limited Partnership Agreement Exhibit 10.11 to Registrant's
between Bob Banner Associates, Quarterly Report on Form 10-Q
the Gary L. Pudney Co. and ML for the quarter ended June
Media Opportunity Productions, 30, 1989
Inc. and ML Media Opportunity (File No. 0-16690)
Partners, L.P.
10.12 Stockholders Agreement dated as Exhibit 10.12 to Registrant's
of September 1, 1989 among Annual Report on Form 10-K
Mediaventures International for the fiscal year ended
Limited, ML Media Opportunity December 31, 1991
Partners, L.P., Peter Clark and (File No. 0-16690)
Alan Morris
10.13 Limited Partnership Agreement of Exhibit 10.13 to Registrant's
European Media Partners dated as Annual Report on Form 10-K
of September 1, 1989 among for the fiscal year ended
Mediaventures Limited, ML Media December 31, 1991
Opportunity Europe, Inc. and ML (File No. 0-16690)
Media Opportunity Partners, L.P.
10.14 Stock Purchase Agreement dated as Exhibit 10.14 to Registrant's
of January 17, 1990 between Annual Report on Form 10-K
Malcolm Glazer and TCS Television for the fiscal year ended
Partners, L.P. December 31, 1991
(File No. 0-16690)
10.15 Limited Partnership Agreement of Exhibit 10.15 to Registrant's
TCS Television Partners, L.P. Annual Report on Form 10-K
dated January 17, 1990 between for the fiscal year ended
Riverdale Media Corp. and ML December 31, 1991
Media Opportunity Partners, L.P. (File No. 0-16690)
10.16 First Amendment to Credit Exhibit 10.16 to Registrant's
Agreement dated as of November Annual Report on Form 10-K
14, 1989 by and among Maryland for the fiscal year ended
Cable Corp., and Citibank, N.A., December 31, 1991
as Agent (File No. 0-16690)
10.17 Second Amendment to Credit Exhibit 10.17 to Registrant's
Agreement dated March 30, 1990 by Annual Report on Form 10-K
and among Maryland Cable Corp. for the fiscal year ended
and Citibank, N.A., as Agent December 31, 1991
(File No. 0-16690)
10.18 Security and Pledge Agreement Exhibit 10.18 to Registrant's
between General Cellular Annual Report on Form 10-K
Corporation and ML Media for the fiscal year ended
Opportunity Partners, L.P. dated December 31, 1991
as of June 15, 1990 (File No. 0-16690)
10.19 Employment Agreement dated June Exhibit 10.19 to Registrant's
22, 1990 between Jessica J. Annual Report on Form 10-K
Josephson and International Media for the fiscal year ended
Publishing, Inc. December 31, 1991
(File No. 0-16690)
10.19.1Agreement dated November 1, 1992 Exhibit 10.19.1 to
between Venture Media and Registrant's Annual Report on
Communications, L.P., ML Media Form 10-K for the fiscal year
Opportunity Partners, L.P., ended December 31, 1992
Jessica J. Josephson, (File No. 0-16690)
International Media Strategies,
Inc. and International Media
Publishing, L.P.
10.20 Limited Partnership Agreement of Exhibit 10.20 to Registrant's
International Media Publishing Annual Report on Form 10-K
L.P. dated June 22, 1990 for the fiscal year ended
December 31, 1991
(File No. 0-16690)
10.20.1Bill of Sale and Agreement dated Exhibit 10.20.1 to
as of July 16, 1993 between Registrant's Quarterly Report
International Media Publishing, on Form 10-Q for the quarter
L.P. and Phillips Business ended June 30, 1993
Information Inc. (File No. 0-16690)
10.20.2Bill of Sale and Agreement dated Exhibit 10.20.2 to
as of July 16, 1993 between Registrant's Quarterly Report
Intelidata Limited and Phillips on Form 10-Q for the quarter
Business Information Inc. ended June 30, 1993
(File No. 0-16690)
10.20.3Sale and Purchase Agreement dated Exhibit 10.20.3 to
as of August 6, 1993 between Registrant's Quarterly Report
Intelidata Limited and Romtec on Form 10-Q for the quarter
plc. ended September 30, 1993
(File No. 0-16690)
10.21 TCS Television Partners, L.P. Exhibit 10.21 to Registrant's
Note Purchase Agreement dated Annual Report on Form 10-K
June 1, 1990 for the fiscal year ended
December 31, 1991
(File No. 0-16690)
10.22 Amended and Restated Credit Exhibit 10.22 to Registrant's
Agreement dated as of September Annual Report on Form 10-K
6, 1991, among Maryland Cable for the fiscal year ended
Corp., Maryland Cable Holdings December 31, 1991
Corp. and Citibank, N.A. as Agent (File No. 0-16690)
10.23 Participation Agreement dated as Exhibit 10.23 to Registrant's
of September 6, 1991, among ML Annual Report on Form 10-K
Cable Partners, L.P. and for the fiscal year ended
Citibank, N.A., as Agent December 31, 1991
(File No. 0-16690)
10.24 Limited Partnership Agreement of Exhibit 10.24 to Registrant's
ML Cable Partners, L.P. dated as Annual Report on Form 10-K
of September 4, 1991 for the fiscal year ended
December 31, 1991
(File No. 0-16690)
10.25 Certificate of Limited Exhibit 10.25 to Registrant's
Partnership of ML Cable Partners, Annual Report on Form 10-K
L.P. for the fiscal year ended
December 31, 1991
(File No. 0-16690)
10.26 Warrant Purchase Agreement dated Exhibit 10.26 to Registrant's
as of September 6, 1991, among Annual Report on Form 10-K
Maryland Cable Holdings Corp. and for the fiscal year ended
Citibank, N.A., as Agent December 31, 1991
(File No. 0-16690)
10.27 Class A Warrant to Purchase Exhibit 10.27 to Registrant's
Common Stock of Maryland Cable Annual Report on Form 10-K
Holdings Corp., dated September for the fiscal year ended
6, 1991 December 31, 1991
(File No. 0-16690)
10.28 Amended and Restated Exhibit 10.28 to Registrant's
Subordination Agreement dated as Annual Report on Form 10-K
of September 6, 1991, among for the fiscal year ended
Registrant, Maryland Cable Corp., December 31, 1991
Maryland Cable Holdings Corp. and (File No. 0-16690)
Citibank, N.A. as Agent
10.29 Amendatory Agreement, dated as of Exhibit 10.29 to Registrant's
September 6, 1991 among Maryland Annual Report on Form 10-K
Cable Corp., Maryland Cable for the fiscal year ended
Holdings Corp., and Citibank, December 31, 1991
N.A. as Agent (File No. 0-16690)
10.30 Amended and Restated Guaranty to Exhibit 10.30 to Registrant's
Maryland Cable Corp., dated as of Annual Report on Form 10-K
September 6, 1991, by Citibank, for the fiscal year ended
N.A. as Agent, and Maryland Cable December 31, 1991
Holdings Corp. (File No. 0-16690)
10.31 Agent's Fee Agreement dated as of Exhibit 10.31 to Registrant's
September 6, 1991, between Annual Report on Form 10-K
Citibank, N.A. and Maryland Cable for the fiscal year ended
Corp. December 31, 1991
(File No. 0-16690)
10.32 Co-Sale Agreement dated as of Exhibit 10.32 to Registrant's
September 6, 1991, among Annual Report on Form 10-K
Registrant and Maryland Cable for the fiscal year ended
Holdings Corp. December 31, 1991
(File No. 0-16690)
10.33 Agreement for the Sale and Exhibit 10.33 to Registrant's
Purchase of Information Research Annual Report on Form 10-K
Division of Logica UK Limited, for the fiscal year ended
dated December 17, 1991 December 31, 1991
(File No. 0-16690)
10.34 Memorandum and Articles of Exhibit 10.34 to Registrant's
Association of Intelidata Annual Report on Form 10-K
Limited, dated as of October 18, for the fiscal year ended
1991 December 31, 1991
(File No. 0-16690)
10.35 Agreement among Bob Banner Exhibit 10.35 to Registrant's
Associates, The Gary L. Pudney Annual Report on Form 10-K
Co., ML Media Opportunity for the fiscal year ended
Productions, Inc., and Registrant December 31, 1991
for withdrawal of Bob Banner (File No. 0-16690)
Associates and the Gary L. Pudney
Co. as General Partners from
Paradigm Entertainment L.P. dated
May 31, 1991
10.35.1Partnership Agreement dated June Exhibit 10.35.1 to
23, 1992 among Bob Banner Registrant's Annual Report on
Associates, Inc. and Paradigm Form 10-K for the fiscal year
Entertainment, L.P. ended December 31, 1992
(File No. 0-16690)
10.36a Articles of Association of Media Exhibit 10.36a to Quarterly
Ventures Investments Ltd. Report on Form 10-Q for the
quarter ended
March 31, 1992
(File No. 0-16690)
10.36b Special Resolution of Media Exhibit 10.36b to Quarterly
Ventures Investments Ltd. Report on Form 10-Q for the
quarter ended March 31, 1992
(File No. 0-16690)
10.36c Articles of Association of Exhibit 10.36c to Quarterly
European Media Partners, Ltd. Report on Form 10-Q for the
quarter ended March 31, 1992
(File No. 0-16690)
10.36d Special Resolution of European Exhibit 10.36d to Quarterly
Media Partners, Ltd. Report on Form 10-Q for the
quarter ended March 31, 1992
(File No. 0-16690)
10.36e Certificate of Incorporation on Exhibit 10.36e to Quarterly
Change of Name (various) Report on Form 10-Q for the
quarter ended March 31, 1992
(File No. 0-16690)
10.36f Resolution of Investment by ALP Exhibit 10.36f to Quarterly
Enterprises in European Media Report on Form 10-Q for the
Partners, Ltd. quarter ended March 31, 1992
(File No. 0-16690)
10.36g Resolution of initial ownership Exhibit 10.36g to Quarterly
structure of European Media Report on Form 10-Q for the
Partners, Ltd. quarter ended March 31, 1992
(File No. 0-16690)
10.36h Agreement to transfer of Exhibit 10.36h to Quarterly
International Programme Ventures Report on Form 10-Q for the
Limited to European Media quarter ended March 31, 1992
Partners, Ltd. (File No. 0-16690)
10.36i Agreement for the Sale and Exhibit 10.36i to Quarterly
Purchase of 50% of the issued Report on Form 10-Q for the
Share Capital of Neomedion Ltd. quarter ended March 31, 1992
(File No. 0-16690)
10.36j Listing of Shareholders at May Exhibit 10.36j to Quarterly
14, 1992 of Mediaventures Report on Form 10-Q for the
Investments Ltd., European Media quarter ended March 31, 1992
Partners, Ltd. and Neomedion Ltd. (File No. 0-16690)
10.37 Management Agreement by and Exhibit 10.37 to Quarterly
between Fairfield Communications, Report on Form 10-Q for the
Inc. and ML Media Partners, L.P. quarter ended June 30, 1993
and Registrant dated May 15, 1993 (File No. 0-16690)
10.37.1Sharing Agreement by and among ML Exhibit 10.37.1 to Quarterly
Media Partners, L.P., Registrant, Report on Form 10-Q for the
RP Companies, Inc., Radio Equity quarter ended June 30, 1993
Partners, Limited Partnership and (File No. 0-16690)
Fairfield Communications, Inc.
10.37.2Option Agreement by and between Exhibit 10.37.2 to
U.S. Radio, Inc. and Registrant Registrant's Annual Report on
relating to station WMXN-FM dated Form 10-K for the fiscal year
January 25, 1994 ended December 31, 1993
(File No. 0-16690)
10.37.3Time Brokerage Agreement by and Exhibit 10.37.3 to
between U.S. Radio, L.P. and Registrant's Annual Report on
Registrant relating to station Form 10-K for the fiscal year
WMXN-FM dated January 25, 1994 ended December 31, 1993
(File No. 0-16690)
10.38 Order of the United States Exhibit 10.01 to Quarterly
Bankruptcy Court, Southern Report on Form 10-Q for the
District of New York, approving quarter ended
nonmaterial modifications to the March 31, 1994
consolidated prepackaged plan of (File No. 0-16690)
reorganization of Maryland Cable
Corp. and Maryland Cable Holdings
Corp.
10.39 Order of the United States Exhibit 10.02 to Quarterly
Bankruptcy Court, Southern Report on Form 10-Q for the
District of New York, confirming quarter ended
debtors' first amended March 31, 1994
consolidated prepackaged debtors' (File No. 0-16690)
first amended consolidated
prepackaged plan of
reorganization under Chapter 11
of the United States Bankruptcy
Code
10.40 Exchange agreement and plan of Exhibit 10.01 to Quarterly
merger by and among Registrant, Report on Form 10-Q for the
Western Wireless Corporation, quarter ended
Markets Cellular Limited June 30, 1994
Partnership and others dated July (File No. 0-16690)
20, 1994
10.41 Stockholders agreement by and Exhibit 10.02 to Quarterly
among Western Wireless Report on Form 10-Q for the
Corporation, Registrant and quarter ended
others dated July 29, 1994 June 30, 1994
(File No. 0-16690)
10.42 Asset purchase agreement between Exhibit 10.01 to Quarterly
ML Media Opportunity Partners, Report on Form 10-Q for the
L.P. and US Radio of Norfolk, quarter ended
Inc. dated October 26, 1994 September 30, 1994
(File No. 0-16690)
10.43 Agreement between ML Media Exhibit 10.02 to Quarterly
Opportunity Partners, L.P., MV Report on Form 10-Q for the
Technology Limited, ALP quarter ended
Enterprises Inc., European Media September 30, 1994
Partners Limited, and others (File No. 0-16690)
dated August 12, 1994
10.44 Share sale agreement between ML Exhibit 10.03 to Quarterly
Media Opportunity Partners, L.P., Report on Form 10-Q
ALP Enterprises, Inc., European for the quarter ended
Media Partners Limited, and September 30, 1994
others dated August 12, 1994 (File No. 0-16690)
10.45 Agreement by and among Bob Banner Exhibit 10.01 to Quarterly
Associates, Inc. and Paradigm Report on Form 10-Q
for the quarter ended
September 30, 1995
(File No. 0-16690)
10.46 Agreement dated as of Exhibit 10.01 to Quarterly
September 17, 1996, between TCS Report on Form 10-Q
and CIGNA Investments Inc. for the quarter ended
September 30, 1996
(File No. 0-16690)
10.47 Stock purchase agreement dated Exhibit 10.1 to Registrant's
December 30, 1996 among TCS Form 8-K Report dated
Television Partners, L.P., TCS December 30, 1996
Television, Inc., Fabri (File No. 0-16690)
Development Corporation and
Nexstar Broadcasting Group,
L.L.C.
27.0 Financial Data Schedule to Form
10-K Report for the fiscal year
ended December 31, 1997
99.1 Pages 13 through 21 and 41 Exhibit 28.1 to Registrant's
through 50 of Prospectus of the Annual Report on Form 10-K
Partnership dated December 31, for the fiscal year ended
1987, filed pursuant to Rule December 31, 1987
424(b) under the Securities Act (File No. 33-15502)
of 1933
99.2 Pages 12 through 15, 17, 18, 22 Exhibit 28.2 to Registrant's
through 25, 41 through 53 and 55 Annual Report on Form 10-K
through 72 of Prospectus for for the fiscal year ended
Maryland Cable Corp.'s offering December 31, 1988
of $162,406,000 Senior (File No. 33-15502)
Subordinated Discount Notes due
1998 and Maryland Cable Holdings
Corp.'s offering of 2,000,000
Shares of Class B common Stock
99.3 Registrant's Proposed Letter to Exhibit 99.3 to Registrant's
Limited Partners dated April 2, Annual Report on Form 10-K
1997 for the fiscal year ended
December 31, 1996
(File No. 0-16690)
99.4 Merrill Lynch, Pierce, Fenner & Exhibit 99.4 to Registrant's
Smith Incorporated's Proposed Annual Report on Form 10-K
Letter to Limited Partners dated for the fiscal year ended
April 2, 1997 December 31, 1996
(File No. 0-16690)
</TABLE>
(b) Reports on Form 8-K.
None.
(c) Exhibits.
See (a)(3) above.
(d) Financial Statement Schedules.
See (a)(2) above.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ML MEDIA OPPORTUNITY PARTNERS, L.P.
By: Media Opportunity Management Partners
General Partner
By: ML Opportunity Management Inc.
Dated: March 31, 1998 /s/ Kevin K. Albert
Kevin K. Albert
Director and President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of Registrant in the capacities and on the dates
indicated.
RP OPPORTUNITY MANAGEMENT, L.P.
By: IMP Opportunity Management Inc.
a general partner
Signature Title Date
/s/ I. Martin Pompadur Director and March 31, 1998
(I. Martin Pompadur) President(principal
executive officer of
the Registrant)
/s/Elizabeth McNey Yates Executive Vice March 31, 1998
(Elizabeth McNey Yates) President
ML OPPORTUNITY MANAGEMENT INC. ("MLOM")
Signature Title Date
Each with respect to
MLOM unless otherwise
noted)
/s/ Kevin K. Albert Director and March 31, 1998
(Kevin K. Albert) President
/s/ Robert F. Aufenanger Director and March 31, 1998
(Robert F. Aufenanger) Executive Vice
President
/s/ Michael E. Lurie Director and Vice March 31, 1998
(Michael E. Lurie) President
/s/ Diane T. Herte Treasurer March 31, 1998
(Diane T. Herte) (principal accounting
officer and principal
financial officer of
the Registrant)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial
information extracted from the year ended 1997 Form 10-
K Consolidated Balance Sheets and Consolidated
Statements of Operations as of December 31, 1997, and
is qualified in its entirety by reference to such
financial statements.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 13,324
<SECURITIES> 0
<RECEIVABLES> 37
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 13,361
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,361
<CURRENT-LIABILITIES> 6,396
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 6,965
<TOTAL-LIABILITY-AND-EQUITY> 13,361
<SALES> 0
<TOTAL-REVENUES> 1,072
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,067
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (995)
<INCOME-TAX> 0
<INCOME-CONTINUING> (995)
<DISCONTINUED> 5,360
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,365
<EPS-PRIMARY> 38.53
<EPS-DILUTED> 0
</TABLE>
