The week that was
By Staff -- Broadcasting & Cable, 8/4/2002 8:00:00 PM
DOJ EYES AOL
The Justice Department is investigating allegations of accounting irregularities at AOL Time Warner . "In the current environment, when anyone raises a question about accounting, it's not surprising that the relevant government agencies will want to look into the facts," the company said last week in a prepared statement. The Justice Department probe comes on the heels of a previously announced Securities and Exchange Commission investigation.
Unlike the SEC, which can only levy civil fines and sanctions, the DoJ can bring criminal charges against a company and its officers. The investigations follow reports two weeks ago by The Washington Post detailing the company's efforts to boost bottom-line numbers with aggressive accounting maneuvers. …
Also last week, Charter Communications blasted back at lawyers behind a class-action suit, denying the company employs improper accounting practices that inflate its reported earnings. The suit, filed in U.S. District Court in Central California, piggybacks on recent concerns about accounting in the cable industry. …
The CEOs and CFOs of big media companies are among the executives having to file a statement to the SEC promising that, "to the best of their knowledge," their companies' quarterly and annual reports do not contain incorrect statements, omissions or other inaccuracies. The policy is part of a new corporate accountability initiative to insure that top executives are held accountable for the sort of accounting practices that rocked Enron, WorldCom, Adelphia and the financial markets.
In the last year, CMT: Country Music Television has been added in nearly 13.75 million new homes, making it the fastest-growing cable network over the last 12 months. According to Nielsen Media Research August universe estimates, CMT is now distributed in 63 million homes. A close second was the Hallmark Channel, picking up 13.74 million new homes since August 2001. That brings Hallmark's total reach to 46.3 million. …
Lifetime remained in first place, but it was the second-place finish of USA Network that was the most striking performance among cable's prime time Nielsen households in July. Lifetime scored a 2.0 for the ratings month ended Monday, but that's off 5% from the same period last year. USA, by contrast, was up 12%, besting both TNT and TBS. That's notable because the beleaguered network and USA President Doug Herzog successfully bet heavily on two new original series, Monk and The Dead Zone, which regularly score 3.0 and better. Big drops for the quarter include CNBC (off 50%); SoapNet (off 50%); AMC (off 30%) Travel Channel (off 25%); and Discovery (off 25%). …
Atom Films, a streaming video company, is taking its content to VOD. Comcast will be the first cable operator to have the service, bringing five hours of programming per month to viewers this fall on its Philadelphia system. Atom hopes to launch a 24/7 cable network in early 2003.
CHUTES AND LADDERS
Dennis Swanson's talent hunt continued late last week. The CBS station group's new COO snagged Joe Ahern, general manager at ABC-owned KGO-TV San Francisco, to run long-troubled WBBM-TV Chicago. Current GM Walt DeHaven will be reassigned, Viacom said. Ahern had been Swanson's station manager when he was general manager of Chicago's ABC O&O WLS-TV during the '80s. …
Cabletelevision Advertising Bureau President Joseph Ostrow, 69, plans to exit the trade group next March. CAB has formed a search committee to find a replacement by the end of the year. He'll remain a consultant. He joined CAB in 1994. …
In the wake of stagnant ratings and failed programming, Allen Sabinson, A&E's senior VP of programming since spring 2000, stepped down last week. Dan Davis, currently executive VP and GM for A&E, will take over until Sabinson's replacement is found. …
Despite accusations that his family misused billions of company dollars, Adelphia Communications founder John Rigas contends he did nothing wrong. "I really believe that what we did was completely acceptable," Rigas told the Buffalo News last week. Rigas told the newspaper he still believes he will be cleared. "I still have confidence in the American system," he said. "I really do."
HOLLINGS WARNS CABLE
Sen. Ernest Hollings (D-S.C.) warned that the cable industry may face a new regulatory push. During a hearing on the telecom meltdown, Hollings said rising rates and low penetration in broadband services may prompt Congress to impose pricing restrictions and Internet mandates on cable. Responding to lawmakers' questions, FCC Chairman Michael Powell said the FCC will accelerate its review of whether cable and telephone companies must offer competing Internet providers access to their high-speed networks.
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