Calif. News Net Backers Miss Deadline

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Backers of a Cable News Network-style channel for California have missed a financing deadline for a building they had committed to purchase from Sacramento.

California News Service was to provide proof of financing to the city on April 26, but missed that date, Sacramento officials said.

Sacramento Economic Development Department downtown development manager Wendy Saunders confirmed the nascent news service had been served with a letter of default, but noted that the company had 30 days to resolve the situation. She said the new deadline is May 30.

The city-owned building — a former Woolworth department store on K Street in the capital's decaying downtown — is part of a redevelopment area. CNS executives optioned the building six months ago with the intent to purchase. It would serve as the network's newsroom and headquarters.

The venture paid Sacramento $450,000 to launch the process. Should CNS fail to raise the cash by the end of the month, it would forfeit that fee to the city, Saunders said.

The news venture must raise $2.75 million to pay the city for the structure. Equipment and furnishings will add an estimated $35 million to those costs.

California News Service is the brainchild of four Cable News Network veterans: Ed Turner, who also was involved the failed Forum Network; Ken Chamberlain, a former CNN bureau chief; Ted Kavanau, who helped launch the CNN offshoot Headline News; and Bill Shaw, who has managed businesses for CNN founder Ted Turner.

Last year, news executives told Multichannel News
of plans for a statewide all-news network with feeds zoned for Southern, Northern and Central California. No TV operation in the state presently has a Sacramento bureau, they noted.

Cable does offer the California Channel, a public-affairs network that covers both houses of the state Legislature and some committee meetings. But that network is not carried by all the of state's operators.

Regionally, a statewide venture would compete with BayTV in the San Francisco Bay area and Orange County NewsChannel, an Adelphia Communications Corp.-owned regional service with aspirations toward expansion into Los Angeles and Ventura counties.

Reached by telephone after the payment deadline, Chamberlain said it was "not a good time to talk" about CNN. The partners were involved in "serious negotiations" with a major broadcaster, he added.

He referred questions to the venture's "money man," Shaw, who did not return repeated calls for comment on the venture's status.

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