Paxson Denies Reports of Paid Programming Switch

May 30, 2005  •  Post A Comment

Paxson Communications Chairman and CEO Lowell “Bud” Paxson last week challenged reports that his company is abandoning entertainment programming in favor of paid programming, saying the beleaguered media company may continue to offer the same or an increased amount of entertainment programming.

“There have been several reports in the press that the company is dropping or reducing entertainment programming,” the statement read. “Those reports are totally incorrect. The company will continue to offer the same or an increased amount of entertainment programming than it has in the past.

“However, as we approach the new fall season, the entertainment programs on our schedule may change to allow the company to give its shareholders a better return on their investment.”

The comments appear to contradict earlier statements by the company that indicated the West Palm Beach, Fla.-based company was moving away from entertainment programming in favor of paid content, which would cost the company little and could boost revenue at a time when the company is laboring under a mountain of debt and too little cash.

Mr. Paxson’s comments come at a time when his company faces an arbitration hearing with NBC Universal over Paxson’s reported shift in programming strategy.

NBCU owns a 32 percent stake in Paxson and has been battling for years to force Paxson to pay NBCU to buy back the stake. Earlier this month NBCU filed an arbitration claim against Paxson over the programming strategy change. Paxson is challenging that by seeking a ruling from the Federal Communications Commission that would block NBCU from weighing in on its programming decisions.

Paxson, in its annual report to the Securities and Exchange Commission several weeks ago, acknowledged that its strategy of maintaining a prime-time schedule of entertainment content wasn’t generating results on ratings and advertising revenue bases.

Amid speculation that Paxson was moving toward programming mostly infomercials, company officials said that other forms of paid programming were expected to be used and that Paxson wasn’t moving to an all-infomercial format.

One person familiar with the situation said Paxson might be exploring the strategy of using barter syndication to retain a semblance of entertainment programming on the air.