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Adelphia Pulls Plug on Calif. News Network

8/05/2001 8:00 PM Eastern

Adelphia Communications Corp. — with the network drowning in a sea of red ink — will shut down Orange County NewsChannel, one of the nation's oldest regional news operations, on Sept. 7.

OCN, which Adelphia acquired along with MSO Century Communications Corp. in 1999, has lost "hundreds of thousands of dollars" in each of the 22 months the Coudersport, Pa.-based MSO has operated it, said Southern California regional vice president Bill Rosendahl.

The channel had been a local fixture since 1990, and served as an alternative to the Los Angeles-focused news offered by broadcast-network affiliates.

The service was launched by Freedom Newspapers, publisher of the Orange County Register. But the publisher sold the venture to Century in 1996, citing mounting losses. OCN still shares the Santa Ana, Calif.-based newspaper's headquarters.

Ironically, the former owner — now known as Freedom Orange County Information Inc. — has submitted a proposal to Adelphia that would keep the station operating. An Adelphia corporate spokesman said he could not comment about any talks on the channel.

OCN is available in roughly 600,000 cable homes served by Adelphia (177,000 homes), Cox Communications Inc., Time Warner Cable, AT&T Broadband and a private cable operation in the Leisure World retirement community.

Rosendahl said the other operators have been told of Adelphia's decision, as were the network's 67 full-time employees. He said it's "quite possible" some of the news employees will find jobs with Adelphia elsewhere.

"It's a great channel and it fills a great need, but we're running a business," he said. "Ad sales are flat, as they are elsewhere in the business. The revenues are not enough to keep OCN going."

Analysts faulted cable's strategy on OCN from the day Century bought the struggling news net. Initially, Century executives said they intended to expand it to become a "CNN [Cable News Network] of Southern California" by reaching into Los Angeles and Ventura counties.

But critics said OCN would never flourish because it had just a single revenue stream. Most programming networks derive half of their operating revenue from advertisers and another 30 to 40 percent from license fees charged to carrying systems.

Orange County operators received OCN gratis, however, and ads were sold by Adelphia Business Solutions. By contrast, Cablevision Systems Corp.'s News 12 Long Island charges license fees and sells advertising.

But, as one operator pointed out, even license fees wouldn't have saved OCN. Local press reports pegged the news channel's annual loss at $5 million.

Operators may have to fill the open slot with non-revenue-generating programming. Orange County operators already carry 19 broadcast stations; at least two more may qualify for must-carry status soon. A Spanish-language broadcaster, KAZA, is ready to go on the air and a second station, KPRA, is 30 to 60 days from launch, operators said.

 

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