Adelphia Communications Corp. made it a practice of lagging behind in paying monthly license fees to programmers, according to several cable-network affiliates sales chiefs last week.
As a result, some of those programmers are worried about how they will fare if Adelphia is forced to go into bankruptcy. Those overdue license fees will just be another item on a long list of accounts receivable that the MSO will owe, with a long line of creditors with hands out for money.
Typically, affiliation deals call for MSOs to pay license fees on a monthly basis from 45 to 60 days at the end of the month in question. Adelphia usually would pay up after that 60 days, several network affiliate sales executives charged.
"Ask any programmer: They're [Adelphia] the least adherent to contractual agreements," one affiliate sales executive said.
"Adelphia, more so than any other MSO, decided strategically to hold the money, to carry the float on the money," he added. "So they will have a disproportionate amount of accounts receivable if they go bankrupt. So we might be left holding the bag for six months worth of payments."
Cable networks have had little recourse against Adelphia for its late payments.
"Short of pulling your signal, you have to live with it," the affiliate sales executive said.
He added that Adelphia vice president of programming Jeff Abbas hasn't returned phone calls to him since the MSO's problems erupted.
"Jeff has kind of gone underground," the affiliate sales official said. "They've been incommunicado."
Adelphia could not be reached for comment.
Lindsay Gardner, executive vice president of affiliate sales and marketing for Fox Cable Networks Group, said last week he brought his team out to Coudersport, Pa., "10 days ago" to meet with Abbas. [A related photo appears on page 25.] They had a lengthy six-hour session, Gardner said.
"They were a little bit more subdued than normal, but we really left there believing they were going to be back on track," Gardner said.
Gardner also said Adelphia officials indicated they would have to sell their prized Los Angeles systems. But, he said, "I got the sense these guys were sticking around."