Tribune Broadcasting and three cable operators — Continental, Scripps Howard and Sutton Capital — will soon announce that they’ve bought an equity position in the Television Food Network, the new cable channel that begins programming a 24-hour daily schedule Nov. 23.
Although the companies declined to comment, sources said the significance of the deal for Tribune is that it will speed up stalled negotiations between Tribune’s seven TV stations and cable systems over “retransmission consent.”
Under that FCC rule, a station can negotiate payments from a local cable operator for being carried on the system.
With cable systems unwilling to pay cash outright for carrying the seven Tribune outlets, Tribune will offer the TV Food Network as anTurn to page 19
TRIBUNE LEADS FOOD NET EQUITY BUY
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alternative, similar to the way ABC is selling ESPN2 and Fox is pitching its new cable channel.
The cable systems will end up paying cash, but for a program service, not for retransmission of broadcast stations.
Industry sources said Tribune is planning to change the terms of the current deal, which offers the Food Network free to cable systems for 10 years if they put it on their most widely circulated tier.
Tribune will ask for per-subscriber license fees from cable operators because of the value of the seven Tribune independent TV stations, all of which telecast professional sports teams in their markets.
The seven are KTLA, Los Angeles; WPIX, New York; WGN, Chicago; WPHL, Philadelphia; KWGN, Denver; WGNX, Atlanta; and WGNO, New Orleans.
The original financial backer of the Food Network, Colony Communications, the 17th-largest multisystem operator in the country, is bringing in Continental (the third-largest MSO), Scripps Howard (19th) and Sutton Capital (46th) as equity partners to goose circulation and help fund programming.
Sources said the size of the equity position of Colony’s partners will be tied, at least in part, to the number of subscribers each of the owners signs up for the network.
Although he refused to identify the equity participants, Reese Schonfeld, president of Pacesetter Communications, the company that will produce the programming for the new channel, said he’ll send out to systems that have signed up a two-hour preview of the Food Network on Aug. 30.