Castle Rock purchase costs Turner Broadcasting System $100 million.

Beverly Hills-based Castle Rock Entertainment Pictures announced last week it has, in principle, been acquired by Atlanta's Turner Broadcasting System.

Sources at TBS and Castle Rock confirmed reports that the acquisition was made for roughly $100 million in cash.

Under the agreement, TBS will also assume about $46 million in debt owed to Pittsburgh-based Westinghouse Electric Corp., $15 million in debt owed to Japan's Sony Corp. and $100 million in collateralized bank debt, according to Castle Rock sources.

TBS indicated it will also enter into long-term employment arrangements with Castle Rock founding partners Alan Horn, Rob Reiner, Martin Shafer, Andrew Scheinman and Glenn Padnick.

"All of us at Castle Rock are delighted with the new strategic alliance with the Turner Broadcasting System," said Managing Partner Alan Horn.

Horn said he believes the deal "is consistent with our long-term goal of producing a greater number of motion pictures and television programs without relying on outside funding and, thus, maximizing our profits from the entire revenue stream."

Castle Rock has produced the current hit film "In the Line of Fire" and past winners like "A Few Good Men," "City Slickers" and "When Harry Met Sally." The company also produces the popular television series "Seinfeld."

Currently, Castle Rock is 44-percent owned by Sony, 15 percent by Westinghouse and 41 percent by the five founding partners. All will cede their equity stakes to TBS, according to Castle Rock sources, making Castle Rock a wholly owned entity of TBS.

Under the new agreement, Sony will continue to distribute Castle Rock movies to American theaters through 1997. Sony will also retain the rights to 11 of Castle Rock's home-video productions.

Sony's Columbia Pictures Television Distribution will continue to syndicate all Castle Rock television reruns ordered through 1996. These would include current series like "Seinfeld," "Thea" and "The Second Half," as well as any future series ordered before the present contract expires. Castle Rock negotiates its own first-run deals, according to company sources.

The parties have yet to determine which company will distribute Castle Rock's productions overseas.

TBS, Castle Rock and Sony plan to finalize the details of the acquisition by year-end, according to Castle Rock spokesman John De Simio.

While penning its letter of intent with Castle Rock, TBS also agreed to a tax-free merger with New York-based New Line Cinema, a deal valued at about $500 million.

In the proposed merger, each outstanding share of New Line common stock will be converted into 0.96386 shares of TBS Class B common. By the latest calculations, TBS would issue about 21 million shares of class B common for the proposed merger.

According to New Line spokesman Joseph Jaffoni, "About half of our 200 employees are out on the Coast in Los Angeles."