NEW YORK — Pax TV, the struggling family-oriented broadcast network, will get a boost in the bottom line following an agreement with the Peacock to tap into NBC’s high-octane sales operation.
Pax parent Paxson Communications also announced plans Monday to buy nine more TV stations, including eight Pax affiliates.
This is “Paxson’s first major initiative with NBC” since selling a 32% stake in the company to the network three months ago, said Jeff Sagansky, president and CEO of Paxson Communications.
As a result of the network sales agreement, which covers marketing and research, more than a dozen members of Pax TV’s sales team will pack up and move into 30 Rockefeller Plaza, where NBC is located.
Sagansky said the sales deal is only the beginning. By the first quarter of next year, he predicted at least some of Pax TV’s 72 stations could be scheduling reruns of the local newscasts of the NBC owned-and-affiliated TV stations in specific markets.
Original movies rerun
Also, major NBC original movies, like this week’s “Y2K,” could run a day or two later on Pax TV’s primetime schedule to take advantage of the massive network publicity campaign. Sagansky said NBC is negotiating same-week repeat rights on Pax TV to movies and series commissioned from outside suppliers.
The stations Pax will buy are all in top 40 markets, including Boston; Washington, D.C.; St. Louis; Indianapolis; Hartford, Conn.; Raleigh-Durham, N.C.; Milwaukee; and Grand Rapids, Mich.
“In light of the recent relaxation of ownership rules, Paxson felt that it was important to better control the direction of our Pax TV stations in the largest television markets,” Sagansky said.
In the report of third-quarter results just released by Paxson Communications, Sagansky boasted about the $415 million that NBC has invested in Pax TV and its broadcast station group. Paxson has also issued NBC warrants to purchase additional Paxson stock over the next three years at prices ranging from $12.60 to $22.50 a share.
The quarterly numbers saw Paxson’s revenue nearly double from the year-earlier period to $58 million as the network launched just over a year ago. The West Palm Beach, Fla.-based company said its net loss widened to $130 million from $53 million, due in part to a $65 million noncash cost related to the NBC investment.
Expenses from operations rose 41% to $31.2 million, due to the cost of launching Pax TV and of operating new TV stations.
As of Sept. 30, long-term debt stood at $384 million.
Paxson shares jumped nearly 11% on Monday’s news to close at $11.38.