RASCO Escalates Regional-News Wars

9/20/1998 8:00 PM Eastern

New York -- Rainbow Advertising Sales Corp.'s (RASCO)
Cable Networks Inc. spot-sales-rep division is forming Regional News Representation -- a
separate unit to sell time exclusively on regional-cable-news networks -- effective in the
first quarter of 1999.

RNR will operate on a scale far larger than National Cable
Communications' news-sales arm, which disbanded last fall, said Deborah Cuffaro,
senior vice president of CNI, which will manage the new entity.

A staff of 40 is projected for RNR's January start,
she said, adding that 65 CNI people currently sell "commingled"
national-spot-cable and regional-news inventory.

Unlike the news networks repped by CNI and NCC, Cuffaro and
David Kline, RASCO's president and chief operating officer, said the attention and
sales effort given to clients by RNR will be far more focused.

"You really can't sell these together,"
Cuffaro said, referring to spot sales and regional news.

By forming RNR, CNI won't have to worry about
potential conflicts arising from selling national spot inventory and regional-news avails
in the same DMA.

Neither Kline nor Cuffaro -- nor NCC executives, for that
matter -- would venture an estimate on the ad-sales volume generated by regional-news
networks, but they said business is strong, unlike a few years ago, when that segment was
a tough sell.

CNI represents 14 regional-news services -- including
parent Cablevision Systems Corp.'s five News 12 networks -- reaching a total of about
13.5 million subscribers, or 65 percent of the total regional-news-subscriber universe,
Kline estimated.

All told, there are 24 regional-news networks in operation,
and Kline asserted last week that RNR will aggressively pursue those not yet under the
RASCO umbrella.

"We'll talk to everybody," including those
currently handled by NCC, he vowed.

CNI enjoyed a hot streak last year, particularly in the
second half of the year, when it lured NewsChannel 8 (Washington, D.C.), NorthWest Cable
News (Seattle) and Pittsburgh Cable News Channel away from NCC. As a result, the remaining
news accounts at NCC were absorbed into its regular spot-sales operation last October.

Moreover, RNR will keep its eyes and ears peeled for news
on a batch of additional networks said to be under development at A.H. Belo Corp., Cox
Communications Inc. and Time Warner Cable.

Earlier this year, Cuffaro had expressed little interest in
Belo's Texas Cable News, which is due to reach 1.4 million subscribers via
Tele-Communications Inc. and Marcus Cable Co. L.P. But last week, she said RNR had
"preliminary talks" with the service's executives.

Time Warner has indicated plans for an Austin, Texas,
network by the fourth quarter of 1999, Cuffaro said, adding that the MSO is also eyeing
Columbus, Ohio, Houston and North Carolina.

Within a couple of years, the regional networks will reach
"enough of a critical mass of subscribers" -- roughly 32 million -- that it will
make sense to form an unwired network of all of the RNR-repped news channels, Kline

RNR in essence will be adapting the unwired sales model
that RASCO and Fox now use for their regional-sports networks, he pointed out. The
executives emphasized that this unwired tack is only "a future growth plan," for

In other matters, Kline said:

• "Preliminary" talks have resumed on the
problems that led to Time Warner quitting the New York Interconnect this past March.

• There's nothing to persistent rumors about
merging NCC and CNI into a single superrep. "We're not in any discussions with
anybody ... We'll stay in [the national spot-cable sales-rep business] as long as
it's a viable business ... [and 1998] has been a very strong year for us in virtually
every market."

• He has heard nothing about a single rep handling
spot sales for the national interconnect now being planned by at least five of the top six
MSOs. Still, he observed, "Someday, that might happen."

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