Paxson Dismisses Infomercial Rumors

Jul 11, 2005  •  Post A Comment

Despite a shift in its programming strategy, Paxson Communications is not becoming an all-infomercial network, and in fact will likely run no more infomercials than it has in the past, Paxson President Dean Goodman said.

In an interview in late June with TelevisionWeek, Mr. Goodman said the beleaguered broadcaster has no plans to increase its reliance on infomercials as a means of reducing operating expenses and driving up revenue.

“We made an announcement that we were making a transition [to a new programming format] and some speculated we would increase the number of infomercials,” Mr. Goodman said. “We never intended to do that, and we won’t do that.” He added that the “amount of programming [in] an entertainment, news or sports vein will remain the same.”

Mr. Goodman’s comments are the clearest signal yet of the company’s intentions, and come after a series of seemingly contradictory regulatory filings and press releases that muddled observers’ impressions of what the company’s strategy might be as it attempts to pare down its huge debt load and as it navigates its legal fight with NBC Universal.

Paxson late last month announced it is shifting the programming strategy of its flagship Pax TV Network, dropping the family-friendly focus in favor of a national network that will embrace independent producers and syndicators. Called the “i” network, Paxson’s main broadcast network will follow the path taken by many independent television stations before the advent of Fox, UPN and The WB. The i network officially launched July 1, airing content ranging from kids programming in the afternoon to movies or syndicated programming during prime-time hours.

“We will have the ability to offer the same diversity of programming that an independent television station would, being a general network and having mass appeal without [going after] specific demographics,” Mr. Goodman said.

The move follows Paxson’s decision this spring to unwind its joint sales agreements with NBCU-owned stations and with a number of station groups that own stations in markets where Paxson also has a presence. That decision, along with Paxson’s planned programming shift, has drawn criticism from NBCU, which filed an arbitration claim against Paxson in an attempt to block the moves. That battle is in addition to a dispute between the two companies over whether Paxson must pay NBCU more than $700 million for NBCU’s 32 percent stake in Paxson.

Mr. Goodman said Pax TV Network would move to one of Paxson’s digital broadcast signals, allowing the brand to grow without having to play the ratings game. Mr. Goodman said the company will look to increase its diet of paid programming aside from infomercials. He said Paxson is exploring other opportunities, such as an arrangement in which a sports team keeps its broadcast rights to aired games but pays a Paxson station for three hours of airtime to broadcast the event.

Whether the new strategy will help the company overcome its debt load of almost $1 billion remains to be seen. Payment on that debt is due at the end of the 2006 second quarter. Some observers have speculated that Paxson will have a tough time making that debt payment. Mr. Goodman disagreed. “We are currently meeting all of our commitments and will meet our commitments in the future. We are comfortable with our capital structure,” he said.