A ratings downgrade of $100 million of Jones Media Networks Ltd. debt last week came amid talk from sources that Viacom Inc.'s MTV Networks was looking to buy Jones's Great American Country network.
GAC, which airs country-music videos, competes directly against MTVN's CMT: Country Music Television
The Moody's Investors Service downgrade cited the ad-sales downturn and warned of "a high probability of default over the rating horizon." Jones Media "has expressed a willingness to sell underutilized assets to bolster its liquidity position," Moody's noted.
Moody's also cited "Jones's need to offer launch incentives to cable operators in order to increase the distribution of its developing GAC."
Jones Media president Jeff Wayne declined to comment on which "underutilized assets" Jones might sell and said he has "no knowledge" that GAC is on the block.
"It would be news to me if MTVN was buying GAC," Wayne added.
MTVN officials couldn't be reached for comment.
Jones Media also owns the Product Information Network, in which Cox Communications Inc. owns a stake, and Jones Radio Networks.
Regarding the downgrade, Wayne said: "We're in pretty good shape. We think Moody's report has more to do with market conditions in general, with what's happening with Enron and Global Crossings [Inc.]. Moody's is extremely conservative right now."
Moody's analyst Russ Solomon said he doesn't expect Jones Media to divest GAC.
"I don't see that as a candidate," he said. "The company has done a good job with that asset."
Several years ago, Jones sold Knowledge TV to Discovery Communications Inc., which used its carriage for other Discovery networks.
GAC is currently in 16.9 million homes, according to Nielsen Media Research, while CMT is in 57.3 million.
Mike Farrell contributed to this report.