Fast Track - Broadcasting & Cable

Fast Track

Deal would bolster cable operator’s position in programming
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Comcast in Talks To Buy E!

Cable giant Comcast Corp. is in talks to buy the remaining stake it doesn’t own in E! Entertainment Television from partner Walt Disney Corp., according to people familiar with the deal.

The purchase would bolster Comcast’s growing position in cable programming, which is composed primarily of smaller networks outside of Nielsen’s top 30 channels. With 80 million subscribers, E! is the biggest of Comcast’s holdings, programmed with a fluffy mix of entertainment news, celebrity reality shows and clip shows (101 Incredible Celebrity Slimdowns!). The network is probably best-known for its red-carpet coverage of TV- and movie-awards shows, such as the Oscars, Emmys and Golden Globes.

Ratings have been mixed lately, but E! President Ted Harbert has pushed them into an upswing in recent weeks, with the average prime time audience up 11% in February. One big driver is the recent acquisition of reruns of Fox reality show The Simple Life, featuring Paris Hilton and Nicole Richie.

A sale probably wouldn’t trigger dramatic changes at E! or sibling channel Style Network, because Comcast already manages the operation. Since 1997, Comcast and Disney have been in a partnership in which Disney initially put up all the cash but still gave the cable operator authority over day-to-day operations.

The partnership—Comcast Entertainment Holdings—owns 79.2% of E! and Style. Comcast owns an additional 20.8% outside of the partnership. The relationship got rocky when Comcast launched an attack to take over Disney, but industry executives say there have been no particular problems between the partners in recent months.

The deal that formed the E! partnership valued the network at $548 million. Merrill Lynch media analyst Jessica Reif Cohen estimates that, today, E! is worth around $2.5 billion. So buying out Disney would cost Comcast around $1 billion.

The E! sale is part of long-running negotiations to settle a number of programming issues between Comcast and Disney. Those include Comcast’s carriage of Disney’s cable networks (ESPN, The Disney Channel and ABC Family); retransmission consent for ABC owned-and-operated broadcast stations; and access to Disney shows and movies on Comcast’s video-on-demand systems.

Spokesmen for Comcast, Disney and E! would not comment on the discussions. However, Disney Senior Executive VP and CFO Tom Staggs told an investor conference that the company is open to restructuring ownership of some of its cable-network partnerships (which also include ESPN, Lifetime and A&E).

Says Staggs, “The strategic direction for us would be toward rationalization of that ownership so we can leverage those properties better, but I can’t tell you that’s going to happen anytime soon.”

QTV Management Is Ousted

The management at troubled gay and lesbian network QTV Network (QTN) has been ousted in a shake-up.

Major investor Lloyd Fan, recently brought on as president, was named chairman and CEO of QTN and parent Triangle Multi-Media, replacing company founder Frank Olsen. After doing due diligence on the company, according to a source,

Fan is replacing the board and top management—above VP level—too, with at least three executives, including Olsen and the COO/CFO, heading for the exit.

“Effective today, all Triangle Multi-Media Limited and QTN officers and board of directors have resigned their positions and have relinquished all responsibilities and affiliations,” the company said in a statement. “Details of the new management infrastructure, with an emphasis on both the television and finance industry, will be forthcoming.”

QTN has long had an odd financial structure. Triangle Multi-Media is a penny stock with 20 billion shares outstanding, but trading at a fraction of a cent per share. Last week’s price: 1/100th of a penny.—John Eggerton.

Bravo Buys 'Six Feet Under’

Bravo bought the exclusive rights to rerun HBO’s Six Feet Under for the next four years, paying a reported sum of more than $15 million for 63 episodes, or all five seasons of the show.

The NBC-owned cable network is said to have spent about $250,000 for each hour-long episode of the quirky mortuary drama, which will debut in back-to-back, once-weekly showings on Bravo in fall 2006.

The deal marks the third major HBO show that has found a second wind in basic cable. Sex and the City went to TBS for about $700,000 an episode in 2003 (Tribune also got broadcast-syndication rights), and The Sopranos went to A&E last year for a record-breaking $2.55 million an episode. Six Feet brought in less per episode than either of those because its offbeat content might not appeal to a mainstream audience.

Bravo, which runs repeats of The West Wing, can now try to shop the show to advertisers who were never able to get in on it when it was on HBO. As a fully distributed basic-cable network, Bravo is in some 80 million homes, while HBO is in fewer than 30 million. As with Sex and The Sopranos, HBO will work with Bravo to trim objectionable content. —Anne Becker

Brown Tapped For NBC Ad Post

Longtime ad-sales executive Patricia Brown has been named VP, Midwest advertising and media sales, for NBC Universal Domestic Television Distribution.

Reporting to Barbara Argentino, the department’s senior VP, Brown joins NBC U from her ad-sales/TV-manager post at Martha Stewart Living Omnimedia (MSLO). She will oversee all Midwest advertiser and media sales, based in Chicago.

While at MSLO, Brown oversaw all Midwest and West Coast ad-sales efforts and creative product placement for its TV programming, including the NBC U-distributed Martha.

Brown had previous Midwest sales stints at Fox Cable and King World and also worked in the station-rep business.—Jim Benson

'Daily’, 'Colbert’ Tapped for iTunes

Comedy Central has made The Daily Show and The Colbert Report available on iTunes. The shows join Comedy’s Drawn Together, South Park and Best of Comedy Central Stand Up, which became available for download on the service in January.

The shows can either be downloaded for $1.99 an episode or, using iTunes’ new “Multi-Pass” feature, at $9.99 for a month’s worth of either show (16 episodes).—A.B.

Lawmakers Push for Carriage of Stations’ Digital Signals

A dozen Florida representatives—eight Republicans and five Democrats—have sent a letter to ranking House Commerce Committee members Joe Barton (R-Tex.), chairman, and John Dingell (D-Mich.), asking that they include a multicasting must-carry provision in any telecommunications law introduced this year.

A rewrite of the 1996 Telecommunications Act is planned for markup in the next couple of weeks. Multicast must-carry would require cable to carry all of a broadcaster’s free digital signals. Cable counters that it should only have to carry a digital replica of the analog channel, a reading of the law that the FCC has upheld, which is why broadcasters are seeking help from Congress.—J.E.

WICT Takes Cable-Only Stance

Looks like women in Verizon’s FiOS video service will have to come up with their own organization.

Women in Cable & Telecommunications has dropped the “&” from its name so people won’t think it includes DBS operators, telcos or others in multichannel video. The change, said the group, “strengthens WICT’s commitment as an organization that supports the cable industry exclusively.”

In its statement, the group said, “With industry consolidation and competition, the need to reevaluate membership eligibility has been at the forefront of Women in Cable Telecommunications’ strategic planning process. Recently, the bylaws of WICT Inc. were changed to be more specific to the cable industry.”

The tightening means that 50-60 members—20% DBS, 20% telco, 60% ISPs—no longer fit the criteria and will have to go, although they are grandfathered through this year.—J.E.

Internet, Videogames Spur New Nick Shows

Nickelodeon is spinning off several TV series based on programs from emerging platforms, such as the Internet and videogames.

“We are in a digital era for kids, and our mission, obviously, is to keep up with kids, so we want to put our content on all the platforms they’re looking for,” says Cyma Zarghami, president, Nickelodeon and MTVN Kids and Family Group.

Unveiled at the kids cable network’s 2006-07 upfront March 9 in New York, the new round of programs includes CGI action adventure series Tak and The Power of JuJu, spun off from a videogame; puppet comedy Mr. Meaty from the channel’s broadband site, Turbo­Nick; and CGI comedy Barnyard, developed from an upcoming movie about animals who come to life when the farmer isn’t there.

Going into this upfront season, Nick has already completed one-third of its deals because of multi-year contracts with key partners, such as toy manufacturers, food companies and movie studios, says Nickelodeon Senior VP of Ad Sales Jim Perry.—A.B.

McDowell Sails Through Commerce Hearing

Senate Commerce Committee Chairman Ted Stevens (R-Alaska) said he will try to hold a vote on the confirmation of Federal Communications Commission nominee Robert McDowell March 16.

In a short hearing, McDowell was praised by Sen. George Allen (R-Va.), who introduced the nominee as a friend and someone who is “extraordinarily qualified.”

McDowell, a native Virginian who comes to the commission from a post at telecom lobby Comptel (member companies include BellSouth), said that he had been in discussions with the White House and the FCC general counsel’s office about possible conflicts and recusal procedures.—J.E.

NAB Votes for Kids-TV Deal

The National Association of Broadcasters board has voted unanimously to support a deal on new kids DTV rules—struck by major media companies and children’s-TV activists—at the Federal Communications Commission.

Both the media companies and activists had threatened to take the new rules, which also apply to analog stations and cable, to court, according to people close to the matter. But they agreed to drop their suits if the FCC accepts the compromise.

The commission has put off the effective date of the rules until after it decides whether or not to accept the deal, which it is widely expected to do. Although the effective date of the rules was postponed, as part of the agreement, the media companies agreed to start complying with its terms as of March 1.

Viacom, CBS, Disney, Fox, NBC Universal, Time Warner, Discovery, 4Kids Entertainment, and the Association of National Advertisers are all behind the new rules.

The FCC will consider the deal March 17—J.E.

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