NEW YORK — Upstart network wannabe Pax Net added credibility to its cause by hiring former CBS president Jeff Sagansky as president and CEO of Paxson Communications Corp., which plans to launch its family-oriented entertainment network on Aug. 31.
Lowell W. (Bud) Paxson, chairman of Paxson Communications, also announced the election of William E. Simon Jr. — whose father William E. Simon Sr. was formerly U.S. Secretary of the Treasury — to the position of vice chairman of Paxson, and the Simon family will make a $10 million investment in the company.
Industry pundits applauded Paxson’s move to hire an executive of the caliber of Sagansky, who was most recently co-president of Sony Pictures Entertainment.
“It’s a great move by Paxson,” said Paul Sweeney, an analyst with Solomon Smith Barney. “Sagansky’s got a tremendous resume in the media business.”
Added Cowen & Co. analyst Harold Vogel: “He’s very experienced in TV and movies. He sure would be effective at programming and strategies. They can benefit from his contacts in the industry.”
Some industry observers expressed surprise that an executive of Sagansky’s stature would join the fledgling Paxson, but Sagansky said he relished the idea of the creation of a wholesome new broadcast network that “inspires people to be the best they can be.”
Sagansky could profit
Sagansky also stands to profit generously from his new gig, but only if Pax Net succeeds. Sagansky, who signed a four-year contract, said that 95% of his compensation will come from equity in Paxson Communications.
“Jeff has the opportunity to shape something from the beginning and be a giant among pygmies,” commented an industry ex-ecutive who knows Sagansky well. “He will enjoy seeing his ideas executed without being second-guessed by the people in Toyko.”
Sagansky said that Pax Net’s lineup of mostly off-network shows such as “Touched by an Angel,” “Promised Land,” “Dave’s World” and “I’ll Fly Away” attracts a sizable audience because most other broadcast and cable networks have abandoned the family entertainment programming strategy.
“We’re going to try to put on shows that inspire values of community friendship and giving back,” said Sagansky, who will move to Paxson’s headquarters in West Palm Beach, Fla. “This is a huge underserved audience.”
Pax Net will hold its first advertising upfront presentation here on Monday. In addition to Pax Net’s lineup of off-network programs in primetime and kids acquisitions for weekends, Sagansky said that he’ll unveil an all-original Saturday-night lineup at the presentation. He added that Pax Net will spend $100 million on programming for its first year.
In addition to the $10 million Simon will bring to the company, Paxson said that Simon’s financial expertise as executive director of William E. Simon & Sons, a private investment bank, will help attract additional investments to the company. Paxson said he plans to raise an additional $150 million in preferred equity securities “to cushion the launch of the network.”
With Sagansky to handle day-to-day management of the company, Paxson said his main responsibilities will be in the distribution, fundraising and deal areas.
Paxson said that his company’s chain of 78 TV stations will enable Pax Net to launch in markets reaching more than 72 million households. Pax Net also recently struck a distribution deal with cable operator Tele-Communications Inc., and Paxson said he has verbal agreements with additional cable operators he would not mention by name.
Before assembling Paxson Communications, Paxson was chiefly known as one of the founders of Home Shopping Network.
Before heading CBS, Sagansky was president of TriStar Pictures.