Broadcaster may seek bankruptcy protection

Ion Media Networks has raised its profile in Hollywood during the past few years by buying off-network rights to series including “Criminal Minds,” “Boston Legal,” “Ghost Whisperer” and “NCIS.”

But now the West Palm Beach, Fla.-based broadcaster, formerly known as Pax TV, is facing balance sheet problems. The company disclosed Wednesday that it was in discussions with lenders on “a comprehensive recapitalization” of its balance sheet. That translates to an effort to restructure its considerable debt, which stands at $2.7 billion, according to the Wall Street Journal. Company is primarily saddled by debt racked up years ago under its former owner, Lowell “Bud” Paxson.

A bankruptcy filing could well be in the cards for Ion if it has trouble finding takers for its debt in this distressed credit market. Biz insiders with business at Ion said they were closely watching the situation, but execs stressed that to date there have been no issues with payments being made on time.

Ion has done programming deals with most of Hollywood’s majors in the past few years, including the syndie divisions of Warner Bros., CBS and 20th Century Fox.

A statement issued by Ion Wednesday stressed that its business operations would “continue uninterrupted.” The Journal reported that the company is poised to miss a $19 million interest payment coming due in the next few weeks.

The company went private in 2007 after NBC Universal sold the bulk of its stake to private equity firm Citadel.

Biz insiders speculated that Ion seems to be running into the same problems that Pax faced after it loaded up on programming in the late 1990s in an effort to turn its lineup of 60-plus UHF stations, which had been home shopping outlets, into a national broadcast network with an emphasis on family-friendly fare like “Touched by an Angel.” However, insiders said the new regime at Ion has carefully focused on making strategic off-net acquisitions and not committing coin to costly original production, as Pax TV did.

It was the value of the stations that drew NBC to invest $415 million for a 32% stake in parent company Paxson Communications in 1999. But the partnership between the sides never gelled, and NBC wound up buying out founder Lowell “Bud” Paxson in 2005. It then facilitated Citadel’s $73 million buyout of the company in mid-2007.

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