TELEVISION—After Huge Loss, Production Outfit Tries to Rebound

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Beleaguered Team Communications Group Inc., a producer of cable television fare, is trying to reestablish itself as a viable public company.

The company received $650,000 in cash from Murchison Media Group to keep its doors open and Murchison has committed up to $5 million by June in exchange for a 75 percent stake in the company.

Even with the cash infusion, it’s going to be an uphill battle for Team, which last Thursday said it would report a net loss of $880,000 (6 cents per diluted share) for the third quarter ended Sept. 30, compared to a net loss of $2.2 million (16 cents) in the year-earlier period.

Compounding its woes, the company amended its 1999 and 2000 financial statements, resulting in the write-off of $42 million.

Team is now headed by Jay Shapiro, a CPA and former consultant to the company who is president and chief operating officer.

Some investors and a former board member said they were surprised to learn of Murchison’s investment considering Team’s present condition and Shapiro’s lack of experience running a production company.

Murchison officials could not be reached for comment.

“We’re disappointed in the third quarter loss, but our losses are a lot less and hopefully for the fourth quarter we’re going to break even or turn a small profit,” Shapiro said.

Nonetheless, the company remains the subject of a Securities and Exchange Commission investigation into improper record keeping as well as a class action lawsuit by investors alleging that the company knowingly concealed sinking fortunes.

With its stock trading at less than $1 since July 6, Team has escaped delisting from the Nasdaq only because of a moratorium imposed on such actions after the Sept. 11 terrorist attacks. That moratorium expires in January.

“The whole situation has been a huge disappointment,” said Mike Risley, part of an investment group that purchased more than 1 million shares of Team stock. “I saw a lot of potential. But the execution was nil. All I got was a bunch of ego and a bunch of attitude (from former Team executives).”

Shapiro insisted things were looking up. He predicted that the shareholder lawsuit would be settled by the end of this month with the company’s insurers covering any liability. He added that none of the company’s current executives were involved in any of the matters under SEC review.

Shapiro insisted the company is getting on the right track with a slate of new productions and by more aggressively marketing its existing library, especially in Asia. The company, which produces programming for cable networks Animal Planet and MTV, among others, is starting an animation unit and plans to begin producing low-budget features for video and foreign markets.

Founded in 1995 by Drew Levin, a former television distribution executive, the unraveling of Team’s finances began in 1999, according to an outside audit commissioned by Team management in late 2000 when it became clear that something was amiss.

Compiled by Henderson and Laffer, the report found Team’s problems stemmed in part from its acquisition of a U.K. subsidiary, Dandelion Distribution Ltd., in 1999 and other purchases that included other television libraries in the U.S. and Germany.

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