MEMO TO: Sumner Redstone

FROM: Peter Bart

SUBJECT: The USA Network NOW THAT THE BIG VIACOM-MCA settlement has washed away, I have a confession to make: I never quite understood it to begin with. I realize it’s always a great feeling to wiggle out of a lawsuit, Sumner, even for someone as combative as yourself. But the dramatic settlement that apparently made you so happy seemed like a curious proposition to many in the industry. The heart of the deal called for an extraordinary swap: Viacom would get 100% of the USA Network, and MCA would get 100% of the Sci-Fi Channel, plus a tidy sum estimated at $1.45 billion. Well, that proved to be “the deal that wasn’t” esoteric tax problems being the culprit. Hence, starting today, you and Edgar Bronfman Jr. of Seagram (parent company of MCA) will do exactly what you both wanted to avoid: Take the witness stand. The resulting testimony should prove fascinating to follow. In the end, the court may have to apportion out the TV channels and other properties at stake. Which takes us back to the basic question, Sumner: Why were you so anxious to write that billion-dollar check and take total control of a TV channel that some analysts regard as something of an anachronism? To be sure, anachronisms seem to be back in style. You’ve noticed, no doubt, that while network television has been around for almost half a century, virtually everything that’s happening today seems like a throwback to the pioneer days. The startup news channels with their talking heads and digital glitches are vivid reminders of a bygone era. The bizarre exchanges between Rupert Murdoch and Ted Turner over TV news could easily pass for outtakes from “Citizen Kane.” And then we have the spectacle of you and Edgar scrapping over the USA Network, which itself seems like a ghost of TV’s past. Now, I don’t want to put down the USA Network, but it is not exactly the channel-surfer’s dream. Indeed, USA is the closest thing to broadcast television circa 1958 a little wrestling, a little boxing, some old movies and TV reruns, a smattering of original programming and, most exciting of all, the Westminster Kennel Club Dog Show. At a time when “branding” is the hottest buzz word around, the USA Network is the industry’s most exotic non-brand. I realize, Sumner, that your diligent USA execs are pouring some $5 million into a campaign to sharpen its fuzzy identity. As Andy Besch, the marketing chief, explains it: “With up to 300 new cable networks on the horizon, we’ve clearly got to create an image that will get subscribers to connect more with what we do” an understatement if ever I heard one. The network will henceforth be described as the “USA Studios” and will present a landscape resembling a giant movie company, replete with “USA personalities.” Well, maybe. Other than Duckman, I’m not exactly sure who these personalities will be or what they would represent. More important than branding, some would argue, the bright and energetic Kay Koplovitz, who has headed USA from its inception 16 years ago, might marshal her colleagues and make some hard decisions about programming.

WHEN MEDIA FUTURISTS FIRST started talking about a 300-channel universe, they stirred expectations of true diversity a tempting smorgasbord of populist and elitist entertainment and information. What’s been delivered instead is a channel-surfer’s worst nightmare a gray landscape of sameness. That, Sumner, is why some analysts speculate that you may have hopped onto the wrong side of the street. In their view, the future will belong to niche programmers, like the Sci-Fi Channel, which the proposed settlement would have given to Bronfman and MCA. It makes no sense to replicate what the broadcast webs do on cable, they argue. The rising cost of programming, combined with increasing competition from other forms of entertainment and sports, could very well make this effort prohibitive. Koplovitz and her colleagues would surely disagree with this analysis. Aside from their $5 million branding effort, USA also is investing more money and energy in original movies, weekly shows and other programming.

THE WEB HAS ORDERED UP a minimum of 22 hours of “The Big Easy,” a steamy weekly mystery drama shot in New Orleans whose ratings have hovered between 2.1 and 2.4. The current lead-in to the show has been “Silk Stalkings,” a curious play on words, which USA has sustained for six seasons now. Earlier this year, USA canceled two highly touted, original half-hour comedy series, “Campus Cops” and “Weekly World News.” USA also has pumped money into its original movies, with decidedly mixed results. “Marilyn & Bobby: Her Final Affair” three years ago inspired one former USA programming VP to re-label USA’s moviemaking efforts as “Bad Things Happen.” Shortly thereafter, USA pledged to produce at least one movie a year based on a classic the likes of Willa Cather or Carson McCullers. In addition, Hallmark Entertainment will produce “Moby Dick” for USA. To be sure, off-network favorites like reruns of “Murder, She Wrote” continue to provide an underpinning of ratings. And the Westminster Kennel Club show registered a solid 4.0, proving that USA knows how to make money even from its dogs.

ALTHOUGH THE NETWORK MAY have it detractors, Sumner, I realize that you can still argue that USA’s 2.0 rating still leads the race among cable’s heavy-hitters, including TBS, TNT and Nickelodeon. People may say USA looks like CBS did 40 years ago, but with cable reaching 80% of all homes within the next decade, the channel arguably has nowhere to go but up. Unless, of course, the “niche” theory proves valid that is, that niche programming will ultimately win the day in cable. Viacom would seem to be a major player in the “niche” revolution, what with MTV and Nickelodeon, not to mention the new TV Land. Now that the “big settlement” has been scuttled, Sumner, you will have more time to ponder which side of the street you wish to be on. It’s all worth a serious think and, as we all know, there’s always lots of time to kill during these thrilling trials in Chancery Court.