Paxson Communications topper Lowell (Bud) Paxson is expected to meet the press on both coasts today to kick off the promotional effort for the company’s plan to launch a family friendly broadcast network.
Paxson staffers have kept mum on the details of the planned weblet, targeted for a fall 1998 bow across the company’s 70-odd TV stations. Most of those stations now carry infomercials and other paid programming, but Paxson is hosting news conferences in New York and Beverly Hills to outline his plans.
In a Nov. 14 filing with the Securities & Exchange Commission, the company confirmed it has pledged to spend $244 million over the next seven years on off-network shows, including CBS’ “Touched by an Angel” (Daily Variety, Oct. 15), and movie packages from the major studios to support the venture.
The SEC filing also confirms what many of Paxson’s investors already suspected: The company has shifted gears from a plan to lease blocks of time on its stations to major program suppliers to the more traditional route of licensing programming and selling national and local advertising time.
In addition to “Touched by an Angel,” off-net product Paxson has acquired includes “The New Land,” which had a short run on ABC in 1974, “Medical Center,” which aired from 1969-76 on CBS; plus the more recent productions “Sisters,” “Life Goes On,” “I’ll Fly Away,” “Christy” and “Dr. Quinn, Medicine Woman.”
There are still plenty of questions about Paxson’s ability to finance all his program and station acquisitions. While Paxson has agreed to sell its radio station group for $629 million, it has committed to spend the same amount again on TV stations and TV program rights.
The filing shows that total debt at Sept. 30 was $351 million, but the company raised $395 million Oct. 1 from completing the first part of the radio station sale. Another $205 million is still to come on the radio sales.
The funds are already spent, however. Paxson has committed to spend about $463 million on TV station deals yet to close and another $244 million on program rights over the next seven years.
The TV stations acquired so far are increasing Paxson’s revenues, but operating costs are rising as well. At the same time Paxson’s interest costs are going up.
The overall impact is more red ink. Paxson’s net loss doubled to $14.8 million in the quarter, the filing said.