Loss Widens at Crown Media

STUDIO CITY, August 9: For
the second quarter, the net loss at Hallmark Channel’s parent company Crown
Media Holdings soared from $56.2 million to $227.4 million, while the half-year
loss more than doubled from $107.1 million to $274.7 million.

Revenue in the second
quarter increased 11 percent to $50.5 million. Advertising revenues totaled
$43.5 million, an increase of 14 percent, and subscriber fee revenues increased
52 percent to $6.4 million. Subscribers increased 7 percent to 73.3 million as
of June 30, 2006. Licensing fees for the film library decreased to $518,000
during the quarter, from $3.2 million in the prior year's quarter.

Crown Media partly
attributed its net loss for the quarter to a non-cash impairment charge of
$184.9 million following an evaluation of its film library, which it is looking
to sell off.

"The fundamentals of
our business are strong," said Paul FitzPatrick, the COO of Crown Media.
"We are adding new subscribers even at these high levels of penetration,
the appeal of our programming is driving record ratings, and the growth in our
advertising revenues reflects the continued success of our programming
strategy. The incurrence of the impairment this quarter is a necessary step in
monetizing the film library in order to improve our capital structure.”