Hallmark Channel Lays Off 130, Boots CEO In Restructuring

by Paul Gough, Oct 22, 2002, 12:00 AM

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The Hallmark Channel has laid off 130 people (including its CEO) in a restructuring its parent company says will strengthen operations in the United States and Europe and hopefully break even by mid-next year.

The network reaches 47 million homes in the United States and another 47 million worldwide. The Hallmark Channel is owned by Crown Media Holdings Inc. The greeting card maker owns 67% of Crown Media, which relaunched the former Odyssey Network as Hallmark in July 2001.

And while it bills itself as one of the fastest-growing networks, it’s also been hard hit by a number of factors. While sales increased from $66.8 million in 2000 to $107.1 million in 2001, The Hallmark Channel’s losses rose too, from $116 million in 2000 to $229.1 million last year. A spokeswoman in part blamed the worldwide downturn in advertising for the Hallmark Channel’s woes.

It’s not the first time Crown Media has restructured. In October 2001 – soon after Odyssey became The Hallmark Network – the company cut about 15% of its work force for what it said at the time was to “utilize the synergies” between the U.S. and international divisions.

But apparently more work needed to be done. This month’s cuts amounted to 30% of the 450 employees. Senior Vice President Mindy Tucker said Crown Media decided to focus its efforts on the U.S. and Europe, where The Hallmark Channel is stronger, and cut back in Latin America and Asia by reducing feeds. The U.K. office is being expanded but other offices in the United States are being scaled back.

That led to Hallmark Channel President/CEO Lena Corbi’s departure. Crown Media Holdings President/CEO David Evans will take Corbi’s responsibilities. Corbi, a former Fox executive who had been COO of Odyssey since March 1999 and who signed a three-year employment agreement last November, remains as a consultant until the end of the year.

“Lana is a very talented and skilled executive and she has played an important role in the launch of the Hallmark Channel … Were it not for the very difficult corporate decisions that had to be made, she would still be a part of the company,” Evans said.

Tucker said the Hallmark Channel’s average viewer should see no changes. Crown Media is attempting to expand both its U.S. and European subscription base, which was expanded earlier this year through a deal with DirectTV.

“We’ve been pleased with the growth to date,” Tucker said.

Hallmark’s delivered an average 0.5 share in Q2.

Looking ahead, Tucker said the network is about to launch a “Watch and Win” promotion with Nestle, Campbell’s and Hallmark. The network tie-in will be built around six original holiday-themed made-for-TV movies that will begin airing six consecutive Saturday nights on Nov. 15.

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