NEW YORK — America’s Health Network, the struggling medical advice channel, has “furloughed” 161 of its 200 employees after the Columbia/HCA Healthcare Corp. pulled back from its planned $25 million investment in the channel.
“The deal was signed and documented,” said Joe Maddox, president and chief operating officer of AHN. “We were just waiting for the money transfer when the chairman of Columbia/HCA resigned.” Maddox was referring to Richard Scott, who ankled the company 10 days ago in the wake of a federal criminal investigation into alleged fraud by Columbia/HCA that has already resulted in the indictment of three of its top officers. Scott’s successor, Dr. Thomas Frist, immediately canceled the AHN deal “with no explanation,” Maddox says.
Maddox said he hopes to secure replacement financing from a “major media company,” which he declined to name, within the next month, allowing AHN to hire back some of the laid-off employees.
AHC, which kicked off March 25, 1996, from its headquarters at Universal Studios in Orlando, Fla., reaches only about 6.3 million households through cable systems and DirecTv. “Our original capitalization came in at $75 million,” he said, adding that the Providence Journal put up 80% of that figure. A.H. Belo Corp. bought the Providence Journal, and Maddox says Columbia/HCA’s Scott had agreed to purchase Belo’s 52% stake in AHN, which is valued at between $55 million and $60 million. That deal has also collapsed, and Belo is looking for a new buyer. AHN’s other owners are Universal Studios, Home Shopping Network, Allen & Co. Inc., Access Health Inc., IVI Publishing, the Mayo Clinic and Medical Innovation Partners.