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Hallmark Parent, National Interfaith Cable Coalition Settle Dispute

Crown Media Holdings: Hallmark Channel Will Continue Airing NICC Fare, but Less 1/03/2008 04:28:00 AM Eastern

Crown Media Holdings, which owns the Hallmark cable channels, settled a dispute with the National Interfaith Cable Coalition over the latter's financial interest in Crown and a program deal between the two parties.

Under terms of the deal, the NICC gave up its right to put its 4.3 million shares of Crown stock back to the company in exchange for the right to continue broadcasting its Sunday-morning block of faith-and-values programming.

Crown also regains control of more programming hours as NICC’s Sunday block on Hallmark Channel will be reduced from six hours to two and its New Morning program, which runs Monday-Friday from 7 a.m.-8 a.m., will be pulled.

The removal of the NICC’s “put” option will save the company about $25 million that it would have needed to buy the shares, likely increasing its debt, according to Oppenheimer analyst Tom Eagan.

“We expect Crown to be able to increase its full-day average ratings as it can likely fill [the gained time slots] with programming more popular than NICC's religious programming,” Eagan wrote in a research piece Thursday. “Alternative programming would easily reduce costs from the annual $25 million NICC fee and could potentially generate revenue should Crown partner with its Hallmark Card parent to create a shopping channel.”

Eagan also expects Crown to announce a new affiliate agreement with Time Warner Cable soon that should raise its fee from near zero to $0.05 per subscriber, per month, or slightly higher.

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