Crown Media Holdings Inc., the parent of Odyssey, has put its $262 million initial public offering on hold, citing unfavorable market conditions.
Crown wanted the cash to expand the distribution of Odyssey and other assets, such as The Kermit Channel, an Indian network; to expand advertising-sales staff; to enhance technical facilities; and to pay $30 million in accrued and unpaid licensing fees to an affiliated company, apparently TV producer Hallmark Entertainment.
"Given the extreme volatility in the U.S. markets this week, we have decided that it is in our best interest to delay our initial public offering at this time," Crown president and CEO David Evans said in an April 14 statement. "We will continue to evaluate the market in the hopes of proceeding with the offering at a future date."
Crown had planned to offer 12.5 million shares-or about 20 percent of its total equity-in the IPO April 18 at a price of between $19 and $20 apiece.
Crown spokeswoman Mary Ellen Adipietro said that although a new date has not been set for the offering, it is still on track. "We're definitely still in registration," she said. "This is something we'd like to do as soon as possible when the market comes back a bit."
The NASDAQ index dropped a record 34 percent in the week prior to Crown's decision, and it has been on a roller-coaster ride ever since. The NASDAQ gained 143 points April 27 to 3,774.03, but it is still 34 percent off its 52-week high of 5,048.62.
Crown's owners include Hallmark (61 percent), Liberty Media Group (18 percent), the National Interfaith Cable Coalition (13 percent) and Chase Equity Associates (8 percent), according to a filing at the Securities and Exchange Commission. Odyssey, which is 22.5 percent-owned by The Jim Henson Co., has acknowledged some difficulty in transitioning from its religious-programming start in 1995 as Faith & Values Channel.
After relaunching in April 1999 as Odyssey and obtaining a $100 million investment from Hallmark and Henson, its ratings slide has leveled off.
Subscriber numbers declined in 1999, to 27.4 million from 29 million in 1998. But the network has reached long-term agreements with AT & T Broadband and Time Warner Cable, and it has distribution agreements covering roughly 35percent of all U.S. cable subscribers.
Relaunching costs cut into Odyssey's bottom line. Net losses rose sharply in fiscal-year 1999, to $55.1 million from $3.2 million in 1998. Revenue at Odyssey rose slightly during the year, to $18.9 million in 1999 from $18.1 million in 1998.
At Crown, pro forma revenue more than doubled to $50.8 million from $23.7 million.