<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1995
REGISTRATION NO. 33-63963
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
HERITAGE MEDIA CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
IOWA 42-1299303
(State of (I.R.S. Employer Identification
Incorporation) No.)
</TABLE>
--------------------------
13355 NOEL ROAD, SUITE 1500
DALLAS, TEXAS 75240
(214) 702-7380
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
--------------------------
DAVID N. WALTHALL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
HERITAGE MEDIA CORPORATION
13355 NOEL ROAD, SUITE 1500
DALLAS, TEXAS 75240
(214) 702-7380
(Address, including zip code, and telephone number, including area
code, of registrant's agent for service)
--------------------------
COPIES TO:
<TABLE>
<S> <C>
BRUCE H. HALLETT SARAH JONES BESHAR
Crouch & Hallett, L.L.P. Davis Polk & Wardwell
717 N. Harwood Street, Suite 1400 450 Lexington Avenue
Dallas, Texas 75201 New York, New York 10017
(214) 953-0053 (212) 450-4131
</TABLE>
--------------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE (1) REGISTRATION FEE (2)
<S> <C> <C>
Subordinated debentures or notes................................ $300,000,000 $103,449
</TABLE>
(1) Such amount in U.S. dollars or the equivalent thereof in foreign currencies
as shall result in an aggregate initial offering price for all securities of
$300,000,000.
(2) The registration fee has been calculated in accordance with the provisions
of Rule 457(c) under the Securities Act of 1933, as amended, and reflects
the offering price rather than the principal amount of any Subordinated
debentures or notes issued at a discount.
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 15, 1995
PROSPECTUS
$300,000,000
HERITAGE MEDIA CORPORATION
SUBORDINATED DEBENTURES AND NOTES
------------------
Heritage Media Corporation (the "Company") may offer and issue from time to
time its unsecured subordinated debentures or notes (the "Securities") for an
aggregate initial offering price not to exceed $300,000,000. The Securities may
be offered in one or more separate series, in amounts, at prices and on terms to
be determined by market conditions at the time of sale and to be set forth in a
supplement or supplements to this Prospectus (a "Prospectus Supplement"). Any
Securities may be offered with other Securities or separately.
Certain terms of any Securities in respect of which this Prospectus is being
delivered will be set forth in the accompanying Prospectus Supplement including,
where applicable, the specific designation, aggregate principal amount, purchase
price, authorized denominations, maturity, prepayment, interest rate and time
and dates of payment of interest (if any), terms (if any) for the redemption or
exchange thereof, listing (if any) on a securities exchange and any other
specific terms of the Securities.
The Securities will be subordinated in right of payment to all present and
future Senior Indebtedness (as defined herein) of the Company to the extent
described herein and in the Prospectus Supplement. The Prospectus Supplement
will also contain information about certain United States federal income tax
considerations relating to the Securities, if applicable.
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 HEREOF FOR A DISCUSSION OF CERTAIN
RISKS ASSOCIATED WITH AN INVESTMENT IN THE SECURITIES.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Securities may be sold on a negotiated or competitive bid basis to or
through underwriters or dealers designated from time to time or to other
purchasers directly or through agents designated from time to time. See "Plan of
Distribution." Certain terms of the offering and sale of the Securities,
including, where applicable, the names of the underwriters, dealers or agents,
if any, the principal amount or number of shares to be purchased, the purchase
price of the Securities and the proceeds to the Company from such sale, and any
applicable commissions, discounts and other items constituting compensation of
such underwriters, dealers or agents, will be set forth in the accompanying
Prospectus Supplement.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
------------------------
The date of this Prospectus is December , 1995
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Heritage Media Corporation (the "Company"
or "Heritage" and, where the context indicates, includes its subsidiaries) with
the Securities and Exchange Commission (the "Commission") are hereby
incorporated in this Prospectus by reference:
1. the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, as amended (the "Form 10-K");
2. the Company's Quarterly Reports on Form 10-Q, as amended, for the
quarters ended March 31, 1995, June 30, 1995 and September 30, 1995, which
contain the unaudited consolidated condensed financial statements of the
Company; and
3. the Company's Report on Form 8-K dated December 11, 1995.
All documents hereafter filed by the Company with the Commission, pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in and to be a part of this Prospectus
from the date of filing of such documents. Any statements contained in a
document all or a portion of which is incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified shall not be deemed a part of this Prospectus, except as so modified,
and any statement so superseded shall not be deemed to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner of a security, to whom a Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all of the
documents which are incorporated by reference herein, other than exhibits to
such information (unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to the Company at
its principal executive offices, One Galleria Tower, 13355 Noel Road, Suite
1500, Dallas, Texas 75240, Attention: Secretary, telephone: (214) 702-7380.
------------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS, IF ANY, MAY OVER-ALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE
SECURITIES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
THE COMPANY
Heritage Media Corporation, through its Actmedia, Inc. ("Actmedia")
subsidiary, is the world's largest independent provider of in-store marketing
products and services, primarily to consumer packaged goods manufacturers. The
Company is also a participant in the broadcast industry through its ownership of
four network affiliated television stations in small to mid-sized markets and 17
radio stations in seven major markets.
On October 23, 1995, the Company entered into an agreement to acquire DIMAC
Corporation ("DIMAC"). See "Recent Developments." DIMAC is the largest full
service, vertically integrated direct marketing services company in the United
States.
The Company's executive offices are located at One Galleria Tower, 13355
Noel Road, Suite 1500, Dallas, Texas 75240, and its telephone number is
214-702-7380.
RISK FACTORS
Prospective purchasers should consider carefully, in addition to the other
information contained in this Prospectus, the following factors:
LEVERAGE; RESTRICTIONS IMPOSED BY LENDERS
The Company has incurred substantial indebtedness in connection with the
acquisitions of its businesses. In June 1992, Heritage Media Services, Inc.
("HMSI"), a wholly-owned subsidiary of the Company, issued $150,000,000
principal amount of 11% Senior Secured Notes Due 2002 ("HMSI Notes") and entered
into a revolving credit and term loan agreement (the "Credit Agreement") under
which HMSI may borrow up to $130 million. As of September 30, 1995, HMSI had
borrowed $120.4 million under the Credit Agreement. In October 1992, the Company
issued $50,000,000 principal amount of 11% Senior Subordinated Notes (the "1992
Notes") due October 1, 2002. The Securities will rank PARI PASSU with the 1992
Notes and will be structurally subordinate to the HMSI Notes, the Credit
Agreement and all other indebtedness of the Company and its subsidiaries.
As of September 30, 1995, Heritage had indebtedness (long-term debt,
including current installments and notes payable) of approximately $355.4
million and stockholders' equity of approximately $108.7 million, and
accordingly, a consolidated debt-to-equity ratio of approximately 3.3 to 1. The
Company expects to incur substantial additional indebtedness in connection with
the acquisition of DIMAC. See "Recent Developments." Such leverage may adversely
affect the ability of the Company to finance its future operations and capital
needs and may limit its ability to pursue other business opportunities which may
be in its interests. Other than as described under "Recent Developments," the
Company does not have any present intent to incur additional indebtedness.
The discretion of the management of the Company with respect to certain
business matters is limited by covenants contained in the Indenture with respect
to the Securities (the "Indenture"), the Credit Agreement, the Indenture with
respect to the 1992 Notes (the "1992 Indenture") and the Indenture with respect
to the HMSI Notes (the "HMSI Indenture"). The restricted activities include,
among other matters, certain mergers, acquisitions and asset sales, capital
expenditures, certain investments, the incurrence of additional debt, sale and
leaseback transactions, the payment of dividends and other similar payments and
transactions with affiliates. It is anticipated that the agreements governing
the indebtedness which may be incurred in connection with the acquisition of
DIMAC will contain similar restrictions.
As a result of its leverage and in order to repay existing indebtedness, the
Company will be required to continue to generate substantial operating cash
flow. The ability of the Company to meet these requirements will depend on,
among other things, prevailing economic conditions and financial, business and
other factors, some of which are beyond its control, and there can be no
assurance that it will be able to meet such requirements.
3
<PAGE>
HOLDING COMPANY STRUCTURE
As a holding company with no material operations of its own and no material
assets other than the stock of its operating subsidiaries, the Company is
dependent upon distributions from its operating subsidiaries to service its debt
obligations, including the Securities. The ability of the Company's subsidiaries
to make such distributions is subject to the following factors: the discretion
of the Company in causing its subsidiaries to make distributions; the ability of
such subsidiaries under state corporate laws to declare dividends; and the
prohibition of, or limitation on, distributions by such subsidiaries arising
under agreements governing indebtedness issued or incurred by the Company's
subsidiaries. Both the HMSI Indenture and the Credit Agreement contain
limitations on the ability of the Company's subsidiaries to pay dividends or
make other distributions to the Company. It is also anticipated that the
agreements governing the indebtedness which may be issued or incurred in
connection with the acquisition of DIMAC will contain similar restrictions. At
September 30, 1995, the HMSI Indenture and the Credit Agreement would have
permitted dividends by the Company's subsidiaries to the Company, subject to
certain exceptions, in the amount of approximately $76 million. The Company
presently expects, although is not required, to redeem the HMSI Notes and to
refinance the indebtedness under the Credit Agreement on June 15, 1997. Claims
of creditors of the Company's subsidiaries, including the holders of the HMSI
Notes and the lenders under the Credit Agreement, will generally have priority
to the assets of such subsidiaries over the claims of the Company and the
holders of the Company's indebtedness.
ABSENCE OF PUBLIC MARKET FOR THE SECURITIES
The Securities comprise a new issue of securities for which there is
currently no public market. If the Securities are traded after their initial
issuance, they may trade at a discount from their initial offering price,
depending upon prevailing interest rates, the market for similar securities,
performance of the Company and other factors. The Company does not intend to
apply for listing of the Securities on any securities exchange.
COMPETITION
Each of the marketing services and broadcast industries are highly
competitive. Several of the Company's competitors and potential competitors in
each of these industries may have greater access to financial resources than the
Company.
GOVERNMENTAL REGULATION
The broadcasting industry is highly regulated. The Company's operation of
its broadcast stations is dependent upon the maintenance and renewal of
broadcast licenses issued by the Federal Communications Commission and by the
continued compliance by the Company with applicable laws and regulations.
Significant changes in legislation affecting broadcasting companies are
anticipated to be enacted in 1996. There can be no assurance as to the ultimate
effect of any new legislation on the Company's operations or financial
condition.
USE OF PROCEEDS
Except as set forth in a Prospectus Supplement, the Company intends to use
the net proceeds from the sale of Securities for general corporate purposes,
including working capital, capital expenditures, investments in or loans to
subsidiaries, refinancing of debt, satisfaction of other obligations, possible
repurchases of capital stock and possible future acquisitions (including the
proposed acquisition of DIMAC) or such other purposes as may be specified in the
Prospectus Supplement. See "Recent Developments."
RECENT DEVELOPMENTS
On October 23, 1995, the Company entered into an agreement (the "Merger
Agreement") with DIMAC. Pursuant to the Merger Agreement, a subsidiary of the
Company would merge with DIMAC,
4
<PAGE>
resulting in DIMAC's becoming a wholly-owned subsidiary of the Company. As a
result of the merger, each share of DIMAC common stock would be converted into
the right to receive $28 in cash. The Company may elect to pay up to $7 of the
$28 merger price by issuing shares of the Company's Class A Common Stock.
Consummation of the merger with DIMAC is subject to approval of the
transaction by the DIMAC stockholders and certain other customary closing
conditions. The Company anticipates that the merger will be consummated in the
first quarter of 1996.
The Company will require financing of approximately $195 million to fund the
purchase price of the outstanding shares of DIMAC common stock and related
transaction expenses and approximately $70 million to refinance DIMAC's
indebtedness and provide an acquisition credit facility for DIMAC. The Company
presently expects to consummate an underwritten public offering of $150 million
principal amount of the Securities prior to the consummation of the merger. In
addition, the Company anticipates entering into a $175 million bank credit
agreement to be guaranteed by DIMAC. If the Company elects to issue shares of
its Class A Common Stock as a part of the merger consideration, the Company's
debt financing would be reduced by as much as $45 million.
DIMAC was founded in 1921 and has evolved into the largest full service,
vertically-integrated direct marketing services company in the United States.
DIMAC creates and implements comprehensive, custom-tailored marketing programs
to enable clients nationwide to focus their marketing expenditures on a highly
targeted potential customer base. As a full service, vertically-integrated firm,
DIMAC provides every component of a complete direct marketing program, including
customized market research, strategic and creative planning, creation and
management of relational databases, telemarketing, media buying, production
services, fulfillment services and subsequent program analysis. Throughout the
last thirty years, DIMAC has successfully expanded the range of its marketing
services and increased the size of its customer base to include major
corporations such as AT&T, American Express, Blockbuster Video, The Walt Disney
Company, several Blue Cross/Blue Shield organizations, Medco Containment
Services and a significant number of all U.S. public television stations.
For the year ended December 31, 1994 and for the nine months ended September
30, 1995, DIMAC had sales of approximately $100.0 million and $89.0 million,
respectively, and income before provision for income taxes and extraordinary
item of $4.85 million and $15.0 million, respectively.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratio of earnings to fixed
charges for the Company for the periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31
SEPTEMBER 30, ------------------------------------------
1995 1994 1993 1992 (2) 1991 (2) 1990 (2)
------------- ---- ---- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges (1).............................. 1.77 1.78 1.09 -- -- --
</TABLE>
- ------------------------
(1) For the purpose of computing the ratio of earnings to fixed charges,
"earnings" consists of income from continuing operations before income
taxes, extraordinary items, minority interest and fixed charges. "Fixed
charges" consists of interest expense, debt amortization costs and one-third
of rental expense representing the interest portion of rental payments made
under operating leases.
(2) For the years ended December 31, 1992, 1991 and 1990, earnings were
insufficient to cover fixed charges by $13.4 million, $18.8 million and
$26.0 million, respectively.
5
<PAGE>
BUSINESS
The Company, through its Actmedia subsidiary, is the world's largest
independent provider of in-store marketing products and services, primarily to
consumer packaged goods manufacturers. The Company also owns and operates four
network affiliated television stations in small to mid-sized markets and 17
radio stations in seven major markets. For the year ended December 31, 1994,
in-store marketing constituted approximately 72.4% of the Company's total
revenues, and television and radio constituted approximately 14.7% and 12.9%,
respectively of the Company's total revenues.
IN-STORE MARKETING
In-store marketing includes advertising displays, coupons, promotions and
product demonstrations provided within the store. Economic trends support the
continued growth of in-store marketing because this medium is inexpensive in
comparison to other marketing alternatives such as television, radio and
traditional print advertisements. In-store marketing products and services allow
advertisers to communicate with consumers at or near the point-of-purchase
before, or as, purchasing decisions are made. In addition, changing shopping
patterns have led to shorter supermarket visits, usually without shopping lists,
and declining brand loyalty, thus increasing the potential of in-store marketing
to influence consumer purchasing decisions. Industry sources estimate that a
significant percentage of brand purchase decisions are made in the supermarket.
PRODUCTS AND SERVICES. Actmedia offers advertisers a broad assortment of
in-store advertising and promotional products, which are highly effective in
increasing consumer awareness and purchases of targeted products. Advertising
products include print displays on shopping carts, aisle directories and
shelves, and audio advertising played throughout the store. Promotional products
consist of customized in-store demonstrations and merchandising, as well as
coupon and sampling programs. Actmedia can provide on-line reporting to
customers concerning the sales impact of its in-store programs.
INSTANT COUPON MACHINE. The ICM, which was developed by Actmedia and
introduced in 1992, is an electronic dispenser of coupons that is mounted on
shelf channels under or near featured products. Through independent market
research sponsored by the Company, the ICM was shown to increase brand
switching substantially and to encourage first-time purchases of featured
products. In market testing, coupons featured in Actmedia's ICM achieved an
average redemption rate of 17%, versus reported redemption rates of
approximately 2% for coupons in free-standing inserts, approximately 4% for
coupons sent to consumers in direct mailings and approximately 1% for run of
press coupons. The ICM generated approximately $82 million of revenues in
1994, as compared to approximately $63 million in 1993.
ACTNOW. Actmedia's Actnow program provides cooperative in-store coupon
and sampling programs for groups of advertisers, generally five times per
year. Under these programs, Actmedia's representatives distribute coupons,
samples and premiums inside the store entrance. Up to 16.5 million co-op
coupon booklets and up to 16.5 million solo coupons and samples are
distributed nationwide directly to shopping customers per event. In
addition, product awareness is reinforced through the placement of featured
products on a free-standing Actnow display.
IMPACT. Impact is the nation's leading in-store supermarket
demonstration program, offering advertisers complete customized events, such
as tastings, premiums, samplings and demonstrations. All demonstrations are
monitored every day by full-time and part-time supervisors at an average
ratio of one supervisor to 15 demonstrators. Impact's regular part-time
staff of demonstrators, who implement the programs, maintain a consistent
professional appearance (with matching aprons and materials). Special
display units are utilized in the programs and programs are sold on a
store-day basis. Events are generally conducted at the front of the store
but can be located elsewhere.
6
<PAGE>
CARTS. Actmedia's 8" by 10", four-color advertisements, mounted in
plastic frames on the inside and outside of shopping carts, offer
advertisers continuous storewide category-exclusive advertising delivery of
a print advertisement.
AISLEVISION. AisleVision features 28" by 18" four-color advertisement
posters inserted in stores' overhead aisle directory signs. An enhancement
of this product, AisleAction, allows the manufacturer to include motion on
the directory sign, enhancing shopper awareness of the sign.
SHELFTALK/SHELFTAKE-ONE. ShelfTalk features advertisements placed in
plastic frames mounted on supermarket or drug store shelves near its
featured product. ShelfTake-One includes rebate offers or recipe ideas which
consumers may remove from the plastic frame at the site of the featured
product.
ACTRADIO. Actradio, formerly POP (Point of Purchase) Radio, is the
nation's largest advertiser-supported, in-store radio network. Actradio
delivers its in-store audio advertising in conjunction with music
entertainment services provided by leading business music providers.
Actradio sells advertising time to manufacturers in units of 15 second, 20
second, and 30 second commercials each hour.
SALES MERCHANDISING. Through its Powerforce division, Actmedia conducts
in-store merchandising and promotional activities such as shelf restockings,
special retailer events, point of purchase installations and other sales
merchandising tasks previously performed by full-time sales forces of
consumer packaged goods manufacturers.
In September 1995, Actmedia introduced ACTPROMOTE, an electronic "paperless"
couponing network which supports price discounts distributed at the checkout
scanner with on-shelf advertising and in-store audio promotion. National rollout
of this network is expected during 1996.
IN-STORE NETWORK. Actmedia's in-store network delivers some or all of its
products and services in over 24,000 supermarkets, 13,000 drug stores and 2,400
mass merchandiser stores across the country, a network substantially larger than
that of any other in-store marketing company in the United States. By
contracting to purchase the Company's in-store advertising and promotional
products, advertisers gain access to up to approximately 200 of the nation's 214
ADIs covering over 70% of the households in the United States. Through the
Powerforce division, Actmedia also delivers sales merchandising services to toy,
hardware, computer retail, office products and department stores.
Actmedia currently has contracts with approximately 300 store chains, which
contracts generally grant it the exclusive right to provide its customers with
those in-store advertising services which are contractually specified. The
contracts are of various durations, generally extending from three to five years
and provide for a revenue-sharing arrangement with the stores. Actmedia's store
contract renewals are staggered and many of its relationships have been
maintained for almost two decades.
Actmedia's advertising and promotional programs are executed through one of
the nation's largest independent in-store distribution and service
organizations, although certain chains require the Company to utilize their own
employees. Actmedia believes the training, supervision and size of its field
service staff (approximately 300 full-time managers and up to approximately
23,800 available part-time employees) provide it with a significant competitive
advantage as its competitors generally do not have a comparable field service
staff.
7
<PAGE>
CUSTOMER BASE. Actmedia's customer base includes approximately 250
companies and 700 brands. This customer base includes the 25 largest advertisers
of consumer packaged goods. In 1994, the Company's largest customers included
the following:
<TABLE>
<S> <C>
Andrew Jergens Kraft Foods
Chesebrough-Pond's Lever Brothers
Coca-Cola McNeil
General Mills Procter & Gamble
Heinz Quaker Oats
Hunt-Wesson Ralston Purina
James River RJR Nabisco
Kelloggs
</TABLE>
INTERNATIONAL OPERATIONS. Actmedia's strategy includes the establishment of
a significant business presence outside of the United States. The majority of
the Company's advertisers are large, multinational companies for whom the use of
in-store marketing products in overseas markets is expected to be a logical
extension of their advertising and promotional budgets. The Company's
international operations are conducted principally in Canada, Australia, New
Zealand and the Netherlands. International sales in 1994 accounted for $23.2
million (approximately 10.0%) of the in-store revenues.
TELEVISION
The following table sets forth selected information relating to the
television stations owned by Heritage (excluding KEVN-TV, the Company's Rapid
City, South Dakota NBC affiliate which is scheduled to be sold during December
1995):
<TABLE>
<CAPTION>
OTHER
DMA COMMERCIAL STATION STATION
CHANNEL NETWORK TV HOMES IN MARKET STATIONS IN MARKET RANK IN
STATION AND LOCATION NUMBER AFFILIATION DMA (1) RANK (1) DMA SHARE (2) MARKET (3)
- ---------------------- ------- ----------- ----------- -------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
KOKH-TV 25 FOX 572,300 43 4 8 4
(UHF)
Oklahoma City, OK
WCHS-TV 8 ABC 473,200 56 3 15 2
(VHF)
Charleston/
Huntington, WV
WEAR-TV 3 ABC 422,340 62 4 19 2
(VHF)
Mobile, AL/
Pensacola, FL
WPTZ-TV 5 NBC 282,740(4) 92(4) 2 13 2
(VHF)
Burlington, VT/
Plattsburgh, NY
WNNE-TV 31 NBC 282,740(4) 92(4) 3 4 4
(UHF) (5)
Hartford, VT/
Hanover, NH
</TABLE>
- ------------------------
(1) Source: Nielsen Television Designated Market Area ("DMA") rankings 1994-5.
(2) "Sign on-sign off" market shares as reported in the November 1994 Nielsen
ratings.
8
<PAGE>
(3) Rankings based on relative "sign on-sign off" market shares in the November
1994 ratings of Nielsen.
(4) Does not reflect any homes in southern Quebec (including most of Montreal)
which received the WPTZ-TV signal off the air or by cable. WPTZ-TV's signal
is accessible to approximately 3.4 million people in the city of Montreal.
(5) Operated as a satellite of WPTZ-TV, but maintains some local programming and
sells advertising locally.
Heritage operates its television stations in accordance with a cost-benefit
strategy that stresses primarily revenue and cash flow generation and
secondarily audience share and ratings. The objective of this strategy is to
deliver acceptable profit margins while maintaining a balance between the large
programming investment usually required to maintain a number one ranking (with
its resultant adverse effect on profit margins), and the unfavorable impact on
revenues that results from lower audience ratings.
Components of the Company's operating strategy include management's emphasis
on obtaining local advertising revenues by market segmentation, which provides a
competitive advertising advantage, focusing on local news programming and
tightly controlling operating expenses. By emphasizing advertising sales from
local businesses, the Company's stations produce a higher percentage of local
business (approximately 63% local and 37% national) than the national average.
RADIO
The Company owns and operates five AM and 12 FM radio stations in seven of
the top 50 markets. The following table sets forth certain information regarding
Heritage's radio stations (excluding ratings information for stations acquired
during 1995):
<TABLE>
<CAPTION>
FM STATION FM STATION RANK
METRO RANK STATIONS IN FORMAT IN TARGET
LOCATION (1) CALL SIGN FORMAT MARKET RANK (2) AUDIENCE (3)
- --------------------------- ------------- --------------- ----------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Seattle-Tacoma, WA 13 KRPM-AM Country 31
KRPM-FM Country 2 14
St. Louis, MO 17 WRTH-AM Standards 32
WIL-FM Country 1 4
KIHT-FM Rock Oldies 1 7
Portland, OR 24 KKSN-AM Standards 28
KKSN-FM Oldies 1 3
WXYQ-FM Rock Oldies --(5) --(5)
Cincinnati, OH 25 WOFX-FM Classic Rock 25 --(4) --(4)
Milwaukee, WI 26 WEMP-AM Oldies 26
Adult
WMYX-FM Contemporary 1 8
Adult
WEZW-FM Contemporary 3 12
Rochester, NY 44 WBBF-AM Standards 17
WBEE-FM Country 1 1
WKLX-FM Oldies 1 5
Kansas City, MO-KS 27 KCFX-FM Rock Oldies 25 1 1
KICY-FM Smooth Jazz --(6) --(6)
</TABLE>
- ------------------------
(1) Metropolitan areas as defined and ranked by Arbitron, Fall 1994.
(2) Heritage's FM station ranking against all radio stations in its market with
the same programming format, based on persons aged 25 to 54 listening during
the 6:00 a.m. to midnight time period. (Source: Fall 1994 Arbitron ratings)
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(3) The target ranking against all radio stations in the market, based on
listenership by adults aged 25 to 54 during the 6:00 a.m. to midnight time
period. (Source: Fall 1994 Arbitron ratings.)
(4) Station changed its call letters to WVAE-FM and launched a new smooth jazz
format in September 1995.
(5) Format was launched in July 1995.
(6) Format was launched in June 1995.
In September 1995, the Company entered into an agreement to purchase radio
stations WMYV-FM and WWST-FM, both serving the Knoxville, Tennessee market, for
an aggregate purchase price of $6.5 million. The acquisition is expected to
close in early 1996.
The Company's strategy is to identify and acquire under performing radio
stations or groups and effect management and operational changes to increase
their profitability. Implementation of Heritage's strategy typically involves
the following four-step process: (1) instituting operational improvements,
usually including a change in management personnel and additional capital
investments when appropriate; (2) creating increases in audience ratings through
programming and promotional changes; (3) improving revenues as a result of the
turnaround process; and (4) increasing EBITDA. Heritage radio stations strive to
be top rated in their programming formats, and universally program a mass appeal
music format directed at a target audience of 25 to 54 year olds. Presently,
seven of the Company's 12 FM stations are format leaders in their markets.
The FCC limits radio ownership both in the number of stations commonly
owned, operated or controlled in any one market, and in total. In late 1992, the
FCC relaxed its rules to increase the number of AM or FM stations one entity can
own in one market, if certain requirements are met. This new combination is
commonly known as a duopoly. The Company has created duopoly ownership in five
of its seven radio markets.
Each of Heritage's FM facilities is of the highest class of service
permitted by the FCC (B or C) with comprehensive signal coverage of its markets.
The AM stations operate as full-time facilities on regional or clear channels.
DESCRIPTION OF SECURITIES
The following sets forth certain general terms and provisions of the
Indenture under which the Securities may be issued. The particular terms of any
such securities will be set forth in the Prospectus Supplement relating thereto.
GENERAL
The Securities will be issued under the Indenture (the "Indenture") between
the Company and The Bank of New York, as Trustee (the "Trustee").
The statements under this caption relating to the Securities and the
Indenture are summaries and do not purport to be complete, and where reference
is made to particular provisions of the Indenture, such provisions, including
the definition of certain terms, are qualified in their entireties by reference
to all of the provisions of the Indenture. Capitalized terms not otherwise
defined below or elsewhere in this Prospectus have the meanings given to them in
the Indenture. A copy of the Indenture has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part.
The Indenture does not limit the aggregate principal amount of Securities
that may be issued by the Company thereunder and provides that Securities may be
issued from time to time in a series.
The Securities will be unsecured obligations of the Company and subordinate
in payment to certain other debt obligations of the Company, as described below
under "Subordination."
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Substantially all of the operations of the Company are and will be conducted
through its subsidiaries, and therefore the Company is dependent on the cash
flow of its subsidiaries to meet the Company's obligations, including its
obligations under the Securities. See "Risk Factors -- Leverage; Restrictions
Imposed by Lenders."
Unless otherwise specified in the applicable Prospectus Supplement,
Securities will be issued in denominations of $1,000 or any integral multiples
of $1,000.
The applicable Prospectus Supplement will describe the following terms of
the Securities of any series: (1) the title; (2) any limit on the aggregate
principal amount; (3) the date or dates on which the principal and premium is
payable or the method of determination thereof; (4) the interest rate or rates
or the method of calculating such rate or rates, the date or dates from which
such interest will accrue and on which such interest will be payable, any right
of the Company to defer such payment, and the record dates for the determination
of holders to whom interest is payable on any such interest payment dates; (5)
the place or places where the principal, premium, if any, and any interest will
be payable, and where transfers or exchanges may be registered; (6) any periods
within which, prices at which, and any terms and conditions upon which, the
Securities of the series may be redeemed at the option of the Company; (7) any
obligation of the Company to redeem or purchase the Securities of the series
pursuant to any sinking fund or analogous provisions or upon the happening of a
specified event or at the option of a holder thereof and any periods within
which, the prices at which and other terms and conditions upon which, the
Securities of the series will be so redeemed or purchased pursuant to any such
obligation; (8) any restrictions on the registration, transfer or exchange of
the Securities of the series; (9) any addition to, or modification of, or
deletion from, any Events of Default or covenants provided for with respect to
the Securities of the series; (10) if the amount of principal of, or any premium
or interest on, any of the Securities of the series may be determined with
reference to an index or pursuant to a formula or other method, the manner in
which such amounts will be determined; (11) any provisions granting special
rights to the holders of Securities of the series upon the occurrence of such
events as may be specified; (12) if other than the principal amount thereof, the
portion of the principal amount of the Securities of the series which will be
payable upon declaration of the acceleration thereof; (13) the applicability, if
any, of the defeasance or covenant defeasance provisions of the Indenture to the
Securities of the series; (13) any circumstances under which the Company will
pay additional amounts on the Securities of the series held by non-U.S. persons
in respect of taxes, assessments or similar charges; (14) whether the Securities
of the series are to be issued in whole or in part in the form of one or more
temporary or permanent global securities and, if so, the identity of the
Depositary for such global security or securities; (15) subject to the
subordination provisions of the Indenture, the relative degree to which the
Securities of the series shall be senior to or be subordinated to other
Indebtedness of the Company; (16) if the Securities of the series may be issued
or delivered or any installment of principal or interest is payable only upon
the satisfaction of other conditions in addition to those specified in the
Indenture, the form and terms of such conditions; (17) the identity of any
Registrar or Paying Agent if other than the Trustee, for the Securities of the
series; and (18) any other terms and provisions of the Securities of the series
which are not inconsistent with the applicable Indenture.
If not otherwise specified in the applicable Prospectus Supplement, the
Indenture does not restrict the ability of the Company to engage in certain
highly leveraged transactions, such as reorganizations, restructurings, mergers,
management leveraged buyouts or similar transactions, that may adversely affect
the holders of Securities. The ability of the Company to engage in such
transactions, however, is significantly restricted by the terms of the
agreements pursuant to which the material indebtedness of the Company and its
subsidiaries have been issued.
If not otherwise specified in the applicable Prospectus Supplement, the
Indenture does not protect the holders of Securities in the event of a change of
control of the Company's board of directors. Other agreements pursuant to which
the material indebtedness of the Company and its subsidiaries have been issued
require the Company to either redeem, or offer to repurchase, such indebtedness
in the event of a change of control of the Company or HMSI.
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<PAGE>
The Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. Certain federal income tax consequences and
special considerations applicable to any such Securities will be described in
the applicable Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement,
principal of and premium, if any, and interest on, each Security will be
payable, and such Securities may be presented for registration of transfer or
exchange, at the office or agency of the Company maintained for such purpose. At
the option of the Company, payment of cash interest on any Security may be made
by check mailed to registered Holders thereof at the addresses set forth on the
registry books (the "Register") maintained by the Trustee, which will initially
act as registrar (the "Registrar"). Unless otherwise indicated in the applicable
Prospectus Supplement, scheduled interest payments on any Security will be made
to the person in whose name such Security is registered at the close of business
on the Regular Record Date for such interest.
No service charge will be made for any exchange or registration of transfer
of Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. Unless
otherwise specified in the applicable Prospectus Supplement or otherwise
designated by the Company, the Company's office or agency will be the Corporate
Trust Office of the Trustee.
GLOBAL SECURITIES
The Securities of a series may be issued in whole or in part in the form of
one or more fully registered global Securities (a "Registered Global Security").
Each Registered Global Security will be registered in the name of a depositary
(the "Depositary") or a nominee for the Depositary identified in the applicable
Prospectus Supplement, will be deposited with such Depositary or a custodian
therefor and will bear a legend regarding the restrictions on exchanges and
registration of transfer thereof. Unless and until it is exchanged in whole or
in part for Securities in definitive certificated form as described hereinafter,
a Registered Global Security may not be transferred or exchanged except as a
whole by the Depositary for such Registered Global Security to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee such
Depositary or any such nominee to a successor Depositary for such series or a
nominee of such successor Depositary.
The specific terms of the depository arrangement with respect to any portion
of a series of Securities to be represented by a Registered Global Security will
be described in the applicable Prospectus Supplement.
Upon the issuance of any Registered Global Security, and the deposit of such
Registered Global Security with or on behalf of the Depositary for such
Registered Global Security, the Depositary will credit on its book-entry
registration and transfer system the respective principal amounts of the
Securities represented by such Registered Global Security to the accounts of
institutions ("Participants") that have accounts with the Depositary. The
accounts to be credited will be designated by the underwriters or agents
engaging in the distribution of such Securities or by the Company, if such
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in a Registered Global Security will be limited to Participants or
persons that may hold interests through Participants. Ownership of beneficial
interests in a Registered Global Security will be shown on, and the transfer of
that ownership will be effected only through, records maintained by the
Depositary for such Registered Global Security or by its nominee. Ownership of
beneficial interests in such Registered Global Security by persons who hold
through Participants will be shown on, and the transfer of such beneficial
interests within such Participants will be effected only through, records
maintained by such Participants.
So long as the Depositary for a Registered Global Security or its nominee,
is the owner of such Registered Global Security, such Depositary or such
nominee, as the case may be, will be considered
12
<PAGE>
the sole owner or Holder of the Security represented by such Registered Global
Security for all purposes under the Indenture. Accordingly, each person owning a
beneficial interest in such Registered Global Security must rely on the
procedures of the Depositary and, if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest, to
exercise any rights of a holder under such Indenture. The Company understands
that under existing industry practices, if it requests any action of holders or
if an owner of a beneficial interest in a Registered Global Security desires to
give or take any instruction or action which a holder is entitled to give or
take under the Indenture, the Depositary would authorize the Participants
holding the relevant beneficial interests to give or take such instruction or
action, and such Participants would authorize beneficial owners owning through
such Participants to give or take such instruction or action or would otherwise
act upon the instructions of beneficial owners holding through them.
Unless otherwise specified in the applicable Prospectus Supplement, payments
with respect to principal of, and, premium, if any, and interest, if any, on,
the Securities represented by a Registered Global Security registered in the
name of the Depositary or its nominee will be made to such Depositary or its
nominee, as the case may be, as the registered owner of such Registered Global
Security. The Company expects that the Depositary for any Securities represented
by a Registered Global Security, upon receipt of any payment in respect of such
Registered Global Security, will credit immediately Participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the Registered Global Security as shown on the records of the Depositary. The
Company also expects that payments by Participants to owners of beneficial
interests in such Registered Global Security held through such Participants will
be governed by standing instructions and customary practices of the
Participants, and will be the responsibility of such Participants. None of the
Company, the Trustee or any agent of the Company or the Trustee shall have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial interests in any Registered Global
Security, or for maintaining, supervising or reviewing any records relating to
such beneficial interests.
Unless otherwise specified in the applicable Prospectus Supplement, if the
Depositary for any Security represented by a Registered Global Security is at
any time unwilling or unable to continue as Depositary of such Registered Global
Security and a successor depository is not appointed by the Company within 90
days, or if an Event of Default is continuing upon request from the Depositary,
the Company will issue Securities in certificated form in exchange for such
Registered Global Security. In addition, the Company in its sole discretion may
at any time determine not to have any of the Securities of a series represented
by one or more Registered Global Securities and, in such event, will issue
Securities of such series in certificated form in exchange for all of the
Registered Global Securities representing such series of Securities.
OPTIONAL REDEMPTION
The terms, if any, of the optional redemption of the Securities by the
Company will be set forth in detail in the applicable Prospectus Supplement.
Notice of redemption will be sent, by first-class mail, at least 30 days and not
more than 60 days prior to the date fixed for redemption to each Holder of
Securities to be redeemed at the last address for such Holder then shown on the
Register. If less than all of the Securities are to be redeemed, the Trustee
shall select, in such manner as in its sole discretion it shall deem appropriate
and fair, the particular Securities to be redeemed or any portion thereof that
is an integral multiple of $1,000. Any notice that relates to a Security to be
redeemed only in part shall state the portion of the principal amount to be
redeemed and that on or after the redemption date, upon surrender of the
Security, a new Security will be issued in a principal amount equal to the
unredeemed portion thereof. On and after the redemption date (unless the Company
shall default in the payment of such Security at the redemption price, together
with accrued interest to the redemption date), interest will cease to accrue on
the Securities or part thereof called for redemption.
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<PAGE>
SUBORDINATION TO SENIOR INDEBTEDNESS
The Securities are expressly subordinate and subject in right of payment to
the prior payment of all Senior Indebtedness, whether outstanding at the date of
the issuance of the Securities or thereafter incurred. "Senior Indebtedness"
means (i) all principal of or interest on or in connection with Indebtedness
(whether outstanding at the date of the issuance of the Securities or thereafter
incurred), (ii) all charges, fees, expenses (including reasonable attorneys'
fees and expenses) and other amounts owing to holders of Indebtedness described
in clause (i) above in connection with such Indebtedness, and (iii) all
renewals, extensions, refundings and replacements of such Indebtedness, unless
in each case, the instrument or document evidencing such Indebtedness expressly
provides that such Indebtedness (a) is expressly subordinate to other
Indebtedness of the Company or (b) is not superior in right of payment to the
Securities; PROVIDED, HOWEVER, that Senior Indebtedness shall not include the
Securities or the 1992 Notes, or any renewals, extensions or refundings thereof.
In addition, as a result of the Company's holding company structure, the
creditors of the Company (including the holders of the Securities), effectively
rank junior to all creditors of the Company's subsidiaries, including trade
creditors. At September 30, 1995, the aggregate outstanding principal amount of
Senior Indebtedness and liabilities of the Company's subsidiaries on a
consolidated basis was approximately $292.1 million. Subject to certain
restrictions contained in the Indenture, the 1992 Indenture, the Credit
Agreement and the HMSI Indenture, the Company and its subsidiaries are permitted
to incur additional Senior Indebtedness.
REPORTS TO HOLDERS
At all times from and after the effective date of the Indenture, whether or
not the Company is then required by the Exchange Act to file reports with the
Commission, the Company shall, to the extent required or permitted, file with
the Commission all such reports and other information as would be required to be
filed with the Commission by the Exchange Act. The Company shall supply the
Trustee and each Holder, or shall supply to the Trustee for forwarding to each
Holder, without cost to such Holder, copies of such reports or other
information. The Company also shall comply with the provisions of Trust
Indenture Act Section 314(a).
EVENTS OF DEFAULT
The following will be Events of Default with respect to the Securities of
any series under the Indenture: (i) failure to pay any interest on any Security
of that series when due, continued for 30 days; (ii) failure to pay principal of
(or premium, if any, on) any Security of that series when due; (iii) failure to
perform or a breach of the obligations of the Company with respect to Mergers,
Consolidations, Sales and Purchases of Assets as set forth in the Indenture;
(iv) failure to perform any other covenant or warranty of the Company in the
Indenture, continued for 60 days after written notice as provided in the
Indenture; (v) failure to pay when due, or acceleration of, the principal of any
Indebtedness of the Company or any Subsidiary of the Company in an aggregate
principal amount in excess of $1,500,000; (vi) the rendering of a final judgment
or judgments (not subject to appeal) against the Company or any of its
Subsidiaries in an aggregate principal amount in excess of $2,000,000 which
remains unstayed, in effect and unpaid for a period of 60 consecutive days
thereafter, and (vii) certain events in bankruptcy, insolvency or reorganization
affecting the Company or any Subsidiary of the Company.
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the Trustee reasonable indemnity. Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Securities of any series will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or exercising any trust or power conferred
on the Trustee in respect of such Securities.
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If an Event of Default shall occur and be continuing, either the Trustee or
the Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of such series may accelerate the maturity of all Securities of such
series; provided, however, that after such acceleration, but before a judgment
or decree based on acceleration, the Holders of a majority in aggregate
principal amount of Outstanding Securities of such series may, under certain
circumstances with respect to the Securities of any series, rescind and annul
such acceleration if all Events of Default, other than the non-payment of
accelerated principal, have been cured or waived as provided in the Indenture.
For information as to waiver of defaults, see "Modification and Waiver."
No Holder of any Security of any series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Securities of such series and
unless the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of such series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in aggregate principal amount of the Outstanding Securities of such series a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days. However, such limitations do not apply to a suit
instituted by a Holder of a Security for enforcement of payment of the principal
of (and premium, if any) or interest on such Security on or after the respective
due dates expressed in such Security.
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.
DISCHARGE AND DEFEASANCE
The Indenture provides that the Indenture shall cease to be of further
effect (except as to registration of transfers and exchanges of Securities and
certain other matters) with respect to the Securities of any series when all
such Securities have or will within one year at their Stated Maturity or
Redemption Date become due and payable and the Company has paid or deposited in
trust with the Trustee a sufficient amount of funds to pay all amounts due with
respect to such Securities.
Additionally, with respect to the Securities of any series as to which the
applicable Prospectus Supplement indicates the applicability of either or both
of the defeasance and covenant defeasance provisions described hereinafter, the
Company at its option may be discharged (i) from all Indenture obligations
(except as to registration of transfers and exchanges of Securities and certain
other matters) ("defeasance") or (ii) from certain of its obligations under
various covenants ("covenant defeasance") and its failure to observe such
obligations will not constitute an Event of Default, upon irrevocable deposit
with the Trustee, in trust, of money and/or government obligations which will
provide money in an amount sufficient in the opinion of a nationally recognized
accounting firm to pay the principal of and premium, if any, and each
installment of interest, if any, on the Outstanding Securities of such series.
With respect to clause (ii), the obligations under the Indenture other than with
respect to such covenants and the Events of Default other than the Event of
Default relating to such covenants above shall remain in full force and effect.
Such additional conditions include, among other things (1) with respect to
clause (i), the Company has received from, or there has been published by, the
Internal Revenue Service of a ruling or there has been a change in law, which in
the opinion of counsel to the Company provides that Holders of the Securities of
such series will not recognize gain or loss for Federal income tax purposes as a
result of such deposit, defeasance and discharge and will be subject to Federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if such deposit, defeasance and discharge had not occurred;
or, with respect to clause (ii), the Company has delivered to the Trustee an
opinion of its counsel to the effect that the Holders of the Securities of such
series will not recognize gain or loss for Federal income tax purposes as a
result of such deposit and defeasance and will be subject to Federal income tax
on the same amount, in the same manner and at the same times as would have been
the case if such deposit and
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<PAGE>
defeasance had not occurred; (2) no Event of Default or event that, with the
passing of time or the giving of notice, or both, shall constitute an Event of
Default shall have occurred and be continuing and no bankruptcy Event of Default
shall have occurred and be continuing on the 121st day after the date of such
deposit; and (3) the Company has delivered to the Trustee an opinion of its
counsel to the effect that such deposit shall not cause the Trustee or the trust
so created to be subject to the Investment Company Act of 1940.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of a majority in aggregate principal
amount of the Outstanding Securities of any series; provided, however, that no
such modification or amendment may, without the consent of the Holder of each
Outstanding Security of such series affected thereby, (i) change the Stated
Maturity of the principal of, or any installment of interest on, any Security of
such series, (ii) reduce the principal amount of (or the premium) or interest
on, any Security of such series, (iii) change the place of payment of principal
of (or premium) or interest on, any Security of such series, (iv) impair the
right to institute suit for the enforcement of any payment on or with respect to
any Security of such series, (v) reduce the above-stated percentage of
Outstanding Securities of such series necessary to modify or amend the
Indenture, (vi) reduce the percentage of aggregate principal amount of
Outstanding Securities of such series necessary for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults or (vii)
modify any provisions of the Indenture relating to the modification and
amendment of the Indenture or the waiver of past defaults or covenants, except
as otherwise specified.
The Indenture also permits certain modifications and amendments of such
Indenture to be made by the Company and the Trustee, without the consent of the
Holders for any of the following purposes: (i) to evidence the succession of
another person to the Company and the assumption by any such successor to the
covenants of the Company, (ii) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power conferred upon the
Company by the Indenture, (iii) to comply with any requirements of the
Commission to maintain the qualification of the Indenture under the Trust
Indenture Act, or (iv) to cure any ambiguity, to correct or supplement any
provision in the Indenture which may be inconsistent with any other provision of
the Indenture which does not adversely affect the interests of the Holders in
any material respect. The Indenture also provides that a supplemental indenture
which changes or eliminates any covenant or other provision of such Indenture
which has expressly been included solely for the benefit of one or more
particular series of Securities, or which modified the rights of the Holders of
such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under such Indenture of the Holders of Securities of
any other series.
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of any series may waive compliance by the Company with certain
restrictive covenants contained in the Indenture. The Holders of a majority in
aggregate principal amount of the Outstanding Securities of such series may
waive any past default under the Indenture, except a default in the payment of
principal, premium, if any, or interest.
GOVERNING LAW
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
THE TRUSTEE
The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set forth
in the Indenture. During the existence of an Event of Default, the Trustee will
exercise such rights and powers vested in it under the Indenture and use the
same degree of care and skill in its exercise as a prudent person would exercise
under the circumstances in the conduct of such person's own affairs.
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PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby in four ways: (i)
through agents, (ii) through underwriters, (iii) through dealers and (iv)
directly to certain purchasers (through a specific bidding or auction process or
otherwise). The distribution of Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices relating to such
prevailing market prices or at negotiated prices.
Offers to purchase Securities may be solicited by agents designated by the
Company from time to time. Any such agent, who may be deemed to be an
underwriter as that term is defined in the Securities Act, involved in the offer
or sale of the Securities in respect of which this Prospectus is delivered, will
be named, and any commissions payable by the Company to such agent will be set
forth, in a Prospectus Supplement. Unless otherwise indicated in a Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment. Agents may be entitled under agreements which may be entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act.
If any underwriters are utilized in the sale of the Securities, the Company
will enter into an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction,
including compensation of the underwriters and dealers, will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales of
the Securities in respect of which this Prospectus is delivered to the public.
The underwriters may be entitled, under the relevant underwriting agreement, to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and to reimbursement by the Company for
certain expenses.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to the
dealer, as principal. The dealer may then resell such Securities to the public
at varying prices to be determined by such dealer at any time of resale. Dealers
may be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, and to reimbursement by the
Company for certain expenses.
Offers to purchase the Securities may be solicited directly by the Company
and sales thereof may be made by the Company directly to institutional investors
or others. The terms of any such sales, including the terms of any bidding or
auction process, if utilized, will be described in the Prospectus Supplement
relating thereto.
The Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms ("remarketing firms"), acting as principals for their own
accounts or as agents for the Company. Any remarketing firm will be identified
and the terms of its agreement, if any, with the Company and its compensation
will be described in the Prospectus Supplement. Remarketing firms may be deemed
to be underwriters in connection with the Securities remarketed thereby.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters or dealers to solicit offers by certain purchasers to
purchase Securities from the Company at the public offering price set forth in
the Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject to only those conditions set forth in the Prospectus Supplement and the
Prospectus Supplement will set forth the commission payable for solicitation of
such efforts.
Certain of the underwriters, agents or dealers and their associates may be
customers or engage in transactions with and perform services for the Company in
the ordinary course of business.
17
<PAGE>
VALIDITY OF SECURITIES
The validity of the Securities offered hereby will be passed upon for the
Company by Crouch & Hallett, L.L.P., Dallas, Texas, and will be passed upon for
the Underwriters by Davis Polk & Wardwell, New York, New York. Crouch & Hallett,
L.L.P. and Davis Polk & Wardwell may rely as to all matters of Iowa law upon the
opinion of Wayne Kern, Esq., Senior Vice President and Secretary of the Company.
EXPERTS
The consolidated financial statements and schedules of Heritage Media
Corporation and subsidiaries as of December 31, 1994 and 1993, and for each of
the years in the three-year period ended December 31, 1994 have been
incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
The consolidated financial statements of DIMAC at December 31, 1993 and
1994, and for each of the three years in the period ended December 31, 1994,
appearing in Heritage Media Corporation's Report on Form 8-K, have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files reports and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at its offices at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's Regional Offices at Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material can
be obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,
such material may also be inspected and copied at the offices of the American
Stock Exchange, 86 Trinity Place, New York, New York 10006-1881.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is hereby made
to the Registration Statement.
18
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses will be paid by the Company in connection with this
offering:
<TABLE>
<CAPTION>
ITEM AMOUNT
- ------------------------------------------------------------------------------------------- -----------
<S> <C>
SEC registration fee....................................................................... $ 103,449
State securities filing fees and expenses.................................................. 25,000
Printing and engraving expenses............................................................ 75,000
Legal fees and expenses.................................................................... 125,000
Accounting fees and expenses............................................................... 75,000
Trustee and registrar fees and expenses.................................................... 15,000
Miscellaneous.............................................................................. 81,551
-----------
Total.................................................................................... $ 500,000
-----------
-----------
</TABLE>
All amounts estimated except for SEC registration fees.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 851 and 856 of the Iowa Business Corporation Act provide that a
corporation has the power to indemnify its directors and officers against
liabilities and expenses incurred by reason of such person serving in the
capacity of director or officer, if such person has acted in good faith and in a
manner reasonably believed by the individual to be in or not opposed to the best
interests of the corporation, and in any criminal proceeding if such person had
no reasonable cause to believe the individual's conduct was unlawful. The
foregoing indemnity provisions notwithstanding, in the case of actions brought
by or in the right of the corporation, no indemnification shall be made to such
director or officer with respect to any matter as to which such individual has
been adjudged to be liable to the corporation unless, and only to the extent
that, the adjudicating court determines that indemnification is proper under the
circumstances.
Article XIII, Section 1 of the registrant's Amended and Restated Articles of
Incorporation and Article III, Section 13, Subsection 1 of the registrant's
By-laws provide that no director shall be liable to the registrant or its
shareholders for monetary damages for breach of fiduciary duty as a director,
provided that the liability of a director is not eliminated or limited (i) for
any breach of the director's duty of loyalty to the registrant or its
shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, (iii) any transaction from
which such director derived an improper personal benefit, and (iv) under Section
496A.44 of the Iowa Business Corporation Act.
Article XIII, Section 2 of the registrant's Amended and Restated Articles of
Incorporation and Article III, Section 13, Subsection 2 of the registrant's
By-laws provide, in general, that the registrant shall indemnify its directors
and officers under the circumstances defined in Sections 851 and 856 of the Iowa
Business Corporation Act.
ITEM 16. EXHIBITS.
<TABLE>
<C> <C> <S>
1(a) -- Form of Underwriting Agreement.(1)
4(a) -- Form of Indenture dated as of , 1996 of the Company to
The Bank of New York, as Trustee(1)
4(b) -- Indenture dated as of June 15, 1992 of Heritage Media Services, Inc.
("HMSI") to Bankers Trust Company, as trustee(2)
4(c) -- Indenture dated as of October 1, 1992 of the registrant to Bank of
Montreal Trust Company, as trustee(3)
4(d) -- Form of Pledge Agreement among the Company, certain Subsidiaries of
the Company, Bankers Trust Company and Citibank N.A.(2)
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <C> <S>
4(e) -- Registrant's Series A Junior Participating Preferred Plan(4)
5 -- Opinion of Crouch & Hallett, L.L.P.(1)
10(a) -- Form of Credit Agreement among HMSI, the banks named therein,
Citibank, N.A., as agent and NationsBank of Texas, N.A., as
co-agent(2)
10(b) -- Registrant's Amended and Restated Stock Option Plan(5)
10(c) -- Registrant's Employee Stock Ownership Plan, as amended(6)
12(a) -- Statement Re: Computation of Consolidated Earnings to Fixed
Charges(7)
23(a) -- Consent of KPMG Peat Marwick LLP(7)
23(b) -- Consent of Crouch & Hallett, L.L.P. (included in opinion filed as
Exhibit 5)
23(c) -- Consent of Ernst & Young LLP(7)
24 -- Power of Attorney (included on page II-4)
25(a) -- Statement of Eligibility of Trustee under the Trust Indenture Act of
1939 on Form T-1(1)
</TABLE>
- ------------------------
(1) Previously filed.
(2) Filed as an Exhibit to the registrant's Registration Statement No. 33-47953
on Form S-2 and incorporated herein by reference.
(3) Filed as an Exhibit to the registrant's Registration Statement No. 33-52062
on Form S-2 and incorporated herein by reference.
(4) Filed as an Exhibit to the registrant's Form 8-K filed August 29, 1994 and
incorporated herein by reference.
(5) Filed as an Exhibit to the registrant's Form 10-K for the year ended
December 31, 1993 and incorporated herein by reference.
(6) Filed as an Exhibit to Amendment No. 2 to the registrant's Registration
Statement on Form S-8 and incorporated herein by reference.
(7) Filed herewith
ITEM 17. UNDERTAKINGS.
(a) RULE 415 OFFERING
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Registration Statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE
The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) INDEMNIFICATION FOR LIABILITY UNDER THE SECURITIES ACT OF 1933
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions set forth or described in Item 15 of the
Registration Statement, or otherwise, the registrant has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(d) RULE 430A
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act of 1933 shall be deemed to be part of
this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(e) QUALIFICATION OF TRUST INDENTURES UNDER THE TRUST INDENTURE ACT OF 1939
The undersigned registrant hereby undertakes to file an application for the
purposes of determining the eligibility of the trustee to act under subsection
(a) of section 310 of the Trust Indenture Act ("Act") in accordance with rules
and regulations prescribed by the Commission under section 305(b)(2) of the Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment to this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Dallas, Texas on December 14, 1995.
HERITAGE MEDIA CORPORATION
By: /s/ DOUGLAS N. WOODRUM
-----------------------------------
Douglas N. Woodrum
VICE PRESIDENT -- FINANCE
Pursuant to the requirements of the Securities Exchange Act of 1933, this
amendment to this registration statement has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
<TABLE>
<C> <S> <C>
/s/ JAMES M. HOAK, JR.*
- ------------------------------------------- Chairman of the Board and December 14, 1995
James M. Hoak, Jr. Director
/s/ DAVID N. WALTHALL* President and Director
- ------------------------------------------- (Principal Executive December 14, 1995
David N. Walthall Officer)
/s/ JAMES P. LEHR* Vice President and
- ------------------------------------------- Controller (Principal December 14, 1995
James P. Lehr Accounting Officer)
/s/ DOUGLAS N. WOODRUM* Vice President -- Finance
- ------------------------------------------- (Principal Financial December 14, 1995
Douglas N. Woodrum Officer)
- ------------------------------------------- Director December 14, 1995
James S. Cownie
/s/ JOSEPH M. GRANT*
- ------------------------------------------- Director December 14, 1995
Joseph M. Grant
/s/ CLARK A. JOHNSON*
- ------------------------------------------- Director December 14, 1995
Clark A. Johnson
- ------------------------------------------- Director December 14, 1995
Alan R. Kahn
*By /s/ DOUGLAS N. WOODRUM
---------------------------------------
Douglas N. Woodrum
ATTORNEY-IN-FACT
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED PAGE
-------------
<C> <C> <S> <C>
1(a) -- Form of Underwriting Agreement.(1)
4(a) -- Form of Indenture dated as of , 1996 of the Company to The Bank of New York,
as Trustee(1)
4(b) -- Indenture dated as of June 15, 1992 of Heritage Media Services, Inc. ("HMSI") to Bankers
Trust Company, as trustee(2)
4(c) -- Indenture dated as of October 1, 1992 of the registrant to Bank of Montreal Trust
Company, as trustee(3)
4(d) -- Form of Pledge Agreement among the Company, certain Subsidiaries of the Company, Bankers
Trust Company and Citibank N.A.(2)
4(e) -- Registrant's Series A Junior Participating Preferred Plan(4)
5 -- Opinion of Crouch & Hallett, L.L.P.(1)
10(a) -- Form of Credit Agreement among HMSI, the banks named therein, Citibank, N.A., as agent
and NationsBank of Texas, N.A., as co-agent(2)
10(b) -- Registrant's Amended and Restated Stock Option Plan(5)
10(c) -- Registrant's Employee Stock Ownership Plan, as amended(6)
12(a) -- Statement Re: Computation of Consolidated Earnings to Fixed Charges(7)
23(a) -- Consent of KPMG Peat Marwick LLP(7)
23(b) -- Consent of Crouch & Hallett, L.L.P. (included in opinion filed as Exhibit 5)
23(c) -- Consent of Ernst & Young LLP(7)
24 -- Power of Attorney (included on page II-4)
25(a) -- Statement of Eligibility of Trustee under the Trust Indenture Act of 1939 on Form T-1(1)
</TABLE>
- ------------------------
(1) Previously filed.
(2) Filed as an Exhibit to the registrant's Registration Statement No. 33-47953
on Form S-2 and incorporated herein by reference.
(3) Filed as an Exhibit to the registrant's Registration Statement No. 33-52062
on Form S-2 and incorporated herein by reference.
(4) Filed as an Exhibit to the registrant's Form 8-K filed August 29, 1994 and
incorporated herein by reference.
(5) Filed as an Exhibit to the registrant's Form 10-K for the year ended
December 31, 1993 and incorporated herein by reference.
(6) Filed as an Exhibit to Amendment No. 2 to the registrant's Registration
Statement on Form S-8 and incorporated herein by reference.
(7) Filed herewith
<PAGE>
EXHIBIT 12(a)
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION> Nine months
Year ended December 31, ended September 30,
------------------------------------------------ ------------------
1990 1991 1992 1993 1994 1995
------- ------- ------- ------ ------ --------------
<S> <C> <C> <C> <C> <C> <C>
Earnings (loss) before income taxes (26,009) (18,832) (13,386) 3,021 25,041 21,206
Fixed charges (1) 42,020 40,091 38,481 33,399 32,256 27,480
------- ------- ------- ------ ------ ------
Earnings (1) 16,011 21,259 25,095 36,420 57,297 48,686
------- ------- ------- ------ ------ ------
------- ------- ------- ------ ------ ------
Ratio of earnings to fixed charges -- -- -- 1.09 1.78 1.77
------- ------- ------- ------ ------ ------
------- ------- ------- ------ ------ ------
Deficiency of earnings to fixed charges (26,009) (18,832) (13,386) -- -- --
------- ------- ------- ------ ------ ------
------- ------- ------- ------ ------ ------
</TABLE>
(1) For purposes of computing the ratio of earnings to fixed charges,
"earnings" consists of earnings (loss) from continuing operations
before income taxes, extraordinary items and fixed charges. Fixed
charges consist of interest expense, including amortization of
debt discount, and one-third of rental expense representing the
estimated interest portion of rental payments on operating leases.
<PAGE>
Exhibit 23(a)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Heritage Media Corporation
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
Dallas, Texas
December 15, 1995
<PAGE>
EXHIBIT 23(C)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 33-63963) and related Prospectus of
Heritage Media Corporation for the registration of $300,000,000 of Subordinated
Debentures and Notes and to the incorporation by reference therein of our report
dated February 24, 1995, with respect to the consolidated financial statements
of DIMAC Corporation included in Heritage Media Corporation's Report on Form
8-K, filed with the Securities and Exchange Commission.
Ernst & Young LLP
St. Louis, Missouri
December 15, 1995
