Crown, NICC Deal Could Come Soon
Schleiff: 'We see a mutually acceptable resolution'
By Mike Farrell -- Multichannel News, 10/9/2007 4:34:00 AM
New York – Crown Media Holdings, the parent of the Hallmark Channel, could be close to reaching a deal with the National Interfaith Cable Coalition regarding the NICC’s put rights for 4.4 million shares of Crown stock.
In an interview shortly after his presentation at the Natixis Bleichroeder Hidden Gems conference, Crown CEO Henry Schleiff said that the two parties were getting closer to a deal.
“We see a mutually acceptable resolution of the NICC issue very, very shortly,” Schleiff said in a brief interview. He declined to elaborate.
The NICC, one of the founders of the Odyssey Channel – which morphed into the Hallmark Channel in 2001 -- has had the right to put its 4.4 million shares (about 4% of Crown’s outstanding stock) to the company since Aug. 29. The put rights expire on Nov. 1.
So far, the NICC has not exercised that put.
In addition, the NICC’s programming agreements with Crown – for the 7 a.m. to 8 a.m. block on weekdays and 6 a.m. to noon on Sundays – will expire at the end of the year. It is likely that those agreements will be allowed to expire, although NICC may retain some of the Sunday morning block, people familiar with the negotiations said.
The NICC has the right to either put the shares directly to Crown – which would cost the company about $28.8 million – or retain the shares and sell them at will on the open market. While Crown could easily absorb that cost through its $50 million of cash on hand, the network would also save about $24 million in programming costs if the NICC programming agreement were to go away.
There was some speculation last month that Turner Broadcasting System may be interested in purchasing the NICC stake or the entire network. Last year Turner parent Time Warner Inc. completed the acquisition of the 50% interest in Court TV, formerly helmed by Schleiff, that it didn’t already own, for $735 million in cash.
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