Paxson Indicates It Will Terminate JSAs

Mar 29, 2005  •  Post A Comment

All of the joint sales agreements that Paxson Communications set up nearly five years ago for 47 of its television stations are in the process of being unwound, according to sources familiar with the situation.

Who initiated the unwinding is subject to debate. Some sources said that Paxson decided to terminate the JSAs as part of a broader strategy to shift its programming focus to infomercials, in which ad space on the company’s stations is sold nationally.

However, others are suggesting that NBC Universal last week informed Paxson of its desire to terminate the more than 40 JSAs Paxson has with NBC Universal-owned stations.

Paxson has also begun notifying other JSA partners, including Gannett Co. and Hearst-Argyle Television, of its intention to terminate those agreements by June 30.

An NBCU spokesman declined to comment, as did a Paxson spokeswoman.

The move by Paxson to sever its JSAs comes at a delicate time for the company. Just a few weeks ago Paxson fired its financial advisers Citigroup and Bear, Stearns & Co. after both investment banks failed to come up with a viable strategy for the company, which has lumbered under a mountain of debt and whose efforts to launch family-friendly programming have stumbled.

In addition, Paxson has been locked in a legal tussle with NBCU over whether it will pay to liquidate NBCU’s 32 percent stake in Paxson. The matter is now before a Delaware judge.