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Frestons Team Vows To Soup Up CMT

5/14/2000 8:00 PM Eastern

New York-You can expect to see an "energized, souped-up" Country Music Television, with strengthened promotion and programming, after it comes under MTV Networks' wing, according to MTVN chairman Tom Freston.

As expected, the operations of Viacom Inc.'s MTVN and CBS Cable, which includes The Nashville Network and CMT, are being merged under Freston-with him in charge-as part of CBS Corp.'s acquisition of Viacom.

Freston said "a lot of leverage" can be brought to bear for CMT due to MTV's ownership of other complementary networks-a stable that includes MTV: Music Television, VH1, MTV2, The Box Music Network, Nickelodeon and TV Land.

MTVN is known for its marketing savvy, its willingness to spend on original programming and its clout in bundling its networks in order to drive their distribution.

MTVN apparently plans to broaden the scope of CMT's programming beyond music videos, similar to its past strategy with VH1.

As for TNN, Freston said, it's already "a strong brand with a good audience."

A legal battle is pending over whether or not CBS will be able to wrest away programming from World Wrestling Federation Entertainment Inc. from USA Network and put it on TNN.

As a result of the MTVN-CBS Cable consolidation, there will be some layoffs, but Freston said he doesn't yet know how many people will be affected.

The immediate casualties are CBS Cable president Don Mitzner and executive vice president of sales and marketing Lloyd Werner, who will both leave the company. Mitzner will stay for a little while as part of the transition team.

In a prepared statement, Viacom president Mel Karmazin said, "I would like to thank Don Mitzner and his team for the fantastic job they have done in building the great assets of this division over the past 14 years."

Mitzner and Werner were enthusiastic about the investment and attention MTVN will be able to devote to TNN and CMT.

"MTV will give TNN and CMT much-needed resources for programming and marketing," Werner said. "They'll get resources we've been begging for for years." Added Mitzner, "I'm optimistic that MTV Networks can take this to the next level."

Mitzner joined Group W, then owned by Westinghouse Broadcasting, in 1981, bringing it from red ink to black within a year. In 1995, Westinghouse Electric Co. acquired CBS.

The combined Westinghouse-CBS entity bought TNN and CMT for $1.5 billion in 1997. The two services formed the core of CBS Cable, along with some regional sports properties.

But unlike other media companies, such as NBC, CBS was never able to spearhead a successful expansion into cable by creating new networks. For example, the old regime at CBS failed to launch a successful new cable channel on the back of retransmission consent, as ABC Inc. did with ESPN2 and News Corp. did with FX.

Later on, CBS Cable's efforts to roll out and find distribution for start-up network CBS Eye on People faltered, with corporate seeming to lend only half-hearted support to the money-losing launch. Discovery Communications Inc. acquired the struggling network and renamed it Discovery People. DCI folded it earlier this year.

Despite that problematic history under the former management at CBS, CBS Cable did have strong numbers recently. Mitzner noted that the CBS Cable unit currently generates cash flow in the neighborhood of $250 million annually on revenue of $600 million. "We've built a very, very big asset," he said.

He wants to see the transition take place as quickly as possible, so CBS Cable staffers know where they stand. "There is a high anxiety level," he added.

There are 85 staffers at CBS Cable's headquarters in Stamford, Conn., he noted. Those who stay with MTVN will have to work from New York, where the music programmer is based.

MTVN will move to combine key CBS Cable functions with those of MTVN, such as ad sales, affiliate sales, business affairs and research.

Freston said the various ad-sales teams would remain intact until the end of the year. But in areas such as affiliate sales, during the next 45 days MTVN will look at personnel and decide who will remain to create the final teams, according to Freston.

In his statement, Karmazin described Freston and MTVN as "without peer in their ability to create cutting-edge programming for targeted audiences, to build unassailable brands and to deliver extraordinary returns year after year."

With CBS Cable added into that mix, Karmazin said, MTVN can "fully exploit the vast potential of our pre-eminent position," in terms of having strongly branded entertainment networks with audiences that are attractive to advertisers.

Meanwhile, Mitzner is busy mulling his next move. "I hope to step back and think about it a little bit," he said. "My preference is to stay in the cable-telecommunications world."

Werner, who expects to stay at MTVN until the end of May, said he started getting phone calls about job opportunities-from cable to the Internet to ad sales-last fall, when the CBS-Viacom merger was announced.

"I'm going to finish up here and sort out these opportunities," he added. "I want to work on more than one project."

TNN and CMT president Dave Hall will continue in those roles. The two networks will remain headquartered in Nashville, Tenn.

The company plans to divest CBS Cable's regional sports business, including Home Team Sports in Baltimore and Midwest Sports Channel in Minneapolis-Milwaukee.

It will also sell Group W Network Services, a technical-operations and satellite-distribution center that services the CBS Television Network and other program services worldwide.

Freston said there have already been a number of inquiries about the CBS Cable sports properties, and moves are being made to quickly sell them. "We have some very, very interested buyers," he added.

Fox Sports, which already owns a one-third stake in HTS, is a potential buyer for the sports assets, according to a Fox Sports spokesman.

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