NBCi to be folded into NBC
Sources say not more than 10 percent or 20 percent of NBCi’s 300-person staff is expected to survive now that General Electric’s NBC has said it will acquire the 61 percent of the entity it doesn’t already own and will absorb its operations.
The shutdown of NBCi has been anticipated in the wake of a staggering $245 million in net losses in the fourth quarter of 2000 on a mere $31 million in revenues. NBCi executives said today they expect to fall far short of their targeted $100 million in revenues for all of 2001, after barely clearing $16 million in revenues the first quarter.
The $85 million cash offer for NBCi places an estimated value of $150 million on the Internet property, well off the $5.7 billion value some analysts assigned to the entity in January 2000, when NBCi stock was trading at a high of slightly more than $104 a share.
NBC’s losses on NBCi are formidable, since it has invested more than $100 million in cash and several hundred million dollars in NBCi stock on Internet acquisitions. It is unclear what will become of the dozens of companies (such as AllBusiness, GlobalBrain and Flyswat) on which NBC spent about $500 million in NBCi stock.
Although NBCi executives and board members hold less than 1 percent of the stock, it is believed that NBC President Robert Wright personally lost several million dollars of his own invested funds. NBC and Mr. Wright were not available for comment.
Bochco suit settled: Following a handful of potentially embarrassing suits from producers charging News Corp. and its Fox studio and cable systems with in-house “sweetheart” deals on TV series repeats, the companies reached an eleventh-hour settlement with “NYPD Blue” creator and Executive Producer Steven Bochco late Friday night. According to syndication and cable consultants, Mr. Bochco’s legal team at O’Neill, Lysaght & Sun extracted a settlement with News Corp. calling for “NYPD Blue” to be released from its current off-network repeat contract with FX-one year before its expiration-for syndie division Twentieth Television to put the show up for bidding on a new cable licensing deal beginning in fall 2001.
Furthermore, the syndie/cable sources say Mr. Bochco may have netted a cash settlement of $40 million to $60 million from News Corp. to cover the fair-market price of $600,000 to $700,000 per episode his company claimed it should have earned on what was a $400,000-per-episode sale to FX.
Tauzin: Budget slights FCC: House Energy and Commerce Chairman Rep. Billy Tauzin, R-La., expressed concern today that President George W. Bush’s fiscal year 2002 budget, released this morning, gives short shrift to funding for the Federal Communications Commission.
The lawmaker expressed “deep concern” that the president “has ignored recommendations to upgrade the Federal Communications Commission’s outdated engineering capabilities.”
Cable extends reach: Cable programming in April is within the reach of 82.4 percent of all U.S. television homes, the highest penetration level ever. That translates into 84.3 million households, up a half-million from March, according to Cabletelevision Advertising Bureau data. A total of 71.3 percent of households are wired and 11.1 percent receive their programming by direct broadcast satellite or other alternate delivery systems. By comparison, just one year ago, in April 2000, about 79 percent of all U.S. television homes were receiving cable programming, with 69 percent hooked up and 10 percent pulling programming off the bird or using other alternate delivery systems.