AHN, Fit TV Nets Eye Merger3/14/1999 7:00 PM Eastern
Fox/Liberty Networks plans to partner with America's
Health Network in a deal that will reportedly merge the stand-alone health channel with
Fit TV, sources said last week.
Fit TV owner Fox/Liberty and AHN will operate the combined
AHN-Fit TV entity as a joint venture, according to sources familiar with their plans.
If all goes according to plan, an announcement about the
pending deal could take place sometime this week. The financial details weren't known
AHN -- an independent service that hasn't had the
backing of any MSOs or media giants -- has faced a rocky road financially since it
launched three years ago, coming close to a shutdown at one point.
But with the backing and resources of Fox/Liberty, it could
prove to be a formidable competitor to the new analog health network that Discovery
Communications Inc. is launching Aug. 2, Discovery Health Channel.
Fox/Liberty, in effect, would be hedging its bets on the
health genre, since it is a part-owner of DCI, along with Cox Communications Inc.,
Advance/Newhouse Communications and DCI chairman and CEO John Hendricks.
An AHN spokeswoman said, "We've been in talks,
looking for a strategic partner for the past year, and Fox is among those we've been
Officials at Fox/Liberty and Fit TV declined comment last
Combined as one health-oriented network, AHN and Fit TV
would have a solid base in terms of distribution, gaining a jump-start on Discovery Health
Channel. AHN has 9.5 million subscribers and, if it is combined with Fit TV, it would
reach roughly 18 million homes, sources said.
Fox/Liberty relaunched Fit TV in January, overhauling the
service's lineup and targeting female viewers with lifestyle, sports and fitness
programming. Fit TV is 92 percent-owned by Fox/Liberty, with 8 percent held by fitness
guru Jake Steinfeld, who founded the network.
After it acquired its stake in Fit TV, Fox/Liberty brought
in Pyper Davis as president to reposition the service. Programming from Fit TV also airs
on sister services FX and Fox Sports Net.
Orlando, Fla.-based AHN, led by chairman and CEO Web
Golinkin, has faced many struggles since its launch in 1996. In 1997, AHN underwent a cash
crunch when one of its financial backers, Columbia/HCA Health Corp., came under federal
probe. Columbia/HCA then backed out of its plans to buy A.H. Belo Corp.'s majority
stake in AHN for $50 million. As a result, AHN laid off 161 employees in August 1997, and
it began airing rerun programming.
AHN was rescued when it got an interim cash infusion from
Manhattan real estate developer Howard Milstein that same summer, and it was able to buy
out A.H. Belo's stake.
In the fall of 1997, an investor group led by two
ex-Columbia/HCA officials, Richard Scott and David Vandewater, gave AHN an equity infusion
in exchange for a majority stake in the service.
Officials for Discovery declined to comment on the possible
merger. Discovery plans to pump up to $350 million into its new division, Discovery Health
Media Inc., which will be the umbrella company for the new health network. Discovery also
has a digital health network, which it launched last year.
The pending deal between AHN and Fox/Liberty a joint
venture of Fox and Liberty Media Group comes just after the completed merger of
AT&T Corp. and Tele-Communications Inc., which left John Malone as chairman of
programming unit Liberty.
Liberty has a $5.3 billion cash war chest to invest with
and make acquisitions.
Aside from Golinkin, Scott and Vandewater, AHN's
principal shareholders include Access Health Inc., Allen & Co. and IVI Publishing Inc.