MagRack’s cutback

Cablevision pares staff at digital fare arm

A correction was made to this article on Aug. 7, 2003.

NEW YORK — Continuing its cost-cutting ways, Cablevision has quietly axed virtually the entire programming staff of fledgling digital unit MagRack, part of Rainbow Media.

Purge, which staffers said came unexpectedly and with little grace, included senior veepee of programming Michael Connor along with all of the division’s senior producers.

The 2-year-old provider of OnDemand video magazines is available to around 2 million cable subscribers through digital carriage deals with cable ops Charter, Insight, Mediacom and Cablevision. A multiyear deal with the 2.6 million-sub Mediacom was announced late last month.

The mass firing leaves only four staffers in programming, including an acquisitions director and a scheduler. MagRack is headed by general manager Matt Strauss, who reports to programming chief Josh Sapan.

Cablevision said it will be able to sustain its programming obligations by retaining third-party content deals for its 30-odd niche offerings. In addition, MagRack has a library of material that will be recycled.

“Rainbow has made a strategic business decision to use third-party entities for the development of original content for MagRack’s OnDemand service, which has resulted in a small reduction in staff,” a Cablevision spokesman told Daily Variety. “While it is always difficult to make these types of decisions, we’ve decided that this is a more appropriate way for us to operate our business moving forward.”

Company implied that its original model of a newsroom with inhouse producers in areas such as sports, yoga and cooking was not feasible.

Future deals will resemble existing editorial partnerships such as it has with Food & Wine magazine for MagRack’s “Cooking With the Pros” — which is among the top 10 of more than 30 titles.

MagRack is part of Rainbow’s Developing Programming arm, which includes music channel Fuse, News 12 Networks, IFC Entertainment and other Rainbow startups.

Second-quarter revenues of $41.8 million from the group represented a 5% year-over-year decline, though its reported operating loss of $32.8 million was a 34% improvement over a year ago. Company attributed decline to increase in bad debt expense at IFC related to an international film licensing deal and a falloff in ad spend due to the Iraq war.

This latest layoff round comes after 14 staffers were shown the door of Rainbow relating to expense accounting infractions.