Citadel to Partner with NBC on Ion Media Nets

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Citadel has stepped up to partner with NBC on Ion Media Networks--formerly the Paxson stations--subject to the approval of Ion's board.

When Bud Paxson exited the business in November 2005, NBC was required to transfer control of his stake to a strategic partner because FCC regulations prevent NBC from owning a controlling interest in Ion's 60 TV stations.

Citadel, Ion's laregest investor,  said on Thursday it would be that partner and made a tender offer to shareholders of common stock of $1.42 per share--a premium of over two-and-a half times the stock price of about 50 cents.

Ion Ceo Brandon Burgess, who came over from NBC to head up Ion , said Ion will have more solid financial footing now that Citadel has stepped up to the plate, but it was basically business as usual.

Burgess told B&C that, for them,  business as usual is three-fold: the broadcast network, multicast services, and datacasting.

Burgess says Ion has raised its broadcast ratings 40% in the past year and the company has a deal with RHI Entertainment (of Hallmark Channel fame) to program three days a week.

On the multicast front, it launched Qubo earlier this month as a 24/7 kids service, and it has plans to  roll out Ion Life--a lifestyle channel.

The business with the longest arc is datacasting. Ion doesn't want mobile TV delivery to become the province of cell phone companies and Burgess says Ion is looking into mobile TV broadcast applications like those Samsung demonstrated at the Consumer Electronics Show last week in Las Vegas.