Diller May Seek Ovation1/09/2000 7:00 PM Eastern
Ovation - The Arts Network confirmed last week that it is
looking to sell part of its network to a strategic partner.
While Ovation insisted that it doesn't plan an
outright sale of the network, one source familiar with the talks said Barry Diller's
USA Networks Inc. recently bid $80 million to buy the entire network.
The source added that Cablevision Systems Corp.'s
Rainbow Media Holdings Inc. unit has also been approached by Ovation, and Rainbow is
interested in adding the network to its stable.
USA Networks and Rainbow representatives declined to
In October, Diller told analysts and reporters that he
planned to acquire at least one cable network in the near future. "We have four
[networks], and I can tell you that we will have five at least, or six -- five for
certain, I hope for six -- sometime in the next six months," he said during a
conference call on USA Networks' third-quarter earnings.
Last summer, Ovation hired Allen & Co. to help it line
up investors, Ovation vice president of marketing Patricia MacEwan said. Potential
strategic partners include MSOs, new-media companies, programmers and other large media
companies, she added.
"The intent is not to sell the network outright,"
MacEwan insisted, disputing reports that Ovation plans to sell its entire operation. But
she wouldn't rule out the possibility of an outright sale.
"That is something that eventually could happen,"
she said. "I think any company, for the right price, is up for sale. But that was not
what our intent was."
MacEwan said Ovation is available in 17 million households,
including on Time Warner Cable's New York City system, where it is offered as part of
a tier above expanded basic. The network declined to release its actual subscriber count.
Ovation has an undisclosed number of analog subscribers,
and is distributed digitally on AT&T Broadband & Internet Services' Headend
in the Sky and Time Warner's AthenaTV platforms.
Owners of the privately held network include The New York
Times Co., J.P. Morgan & Co., Howard Heinz Endowment, Museum of Modern Art president
Agnes Gund, Eaton Vance Distributors Inc. and Iris Cantor.
Founders include chairman of the board J. Carter Brown,
former Hogan & Hartson law-firm partner Tony Harrington (currently U.S. ambassador to
Brazil) and the late Terry Sanford.
Ovation has about 20 employees who primarily work on
programming, sales, marketing and administration. The company uses subcontractors for
technical and production needs.
While talk of mergers and acquisitions will often affect
morale at any company involved, MacEwan said, the talks haven't hurt morale at the
network's Alexandria, Va., headquarters.
"[Employees] understand that it's a little bit of
riding a roller coaster when you're starting a new company," she added. Ovation
was launched in April 1996.
Most Ovation staff are partial owners in the company, she
said, suggesting that a deal could benefit those employees with stakes in Ovation.
"It's a different environment altogether," she added.