New Food Chef: Gruen Is Out, Ober Onboard

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New York -- In an abrupt and surprising move that heralded
a new direction for the channel, Scripps Networks last week brought in CBS News veteran
Eric Ober to replace Erica Gruen as president of Food Network, effective immediately.

Saying that the management change was by mutual and
amicable agreement, Gruen ended her two-year tenure at Food and announced plans to start a
consulting firm. During her watch, the channel's distribution grew to 34 million from 16
million; its primetime ratings tripled; and it launched host-chefs such as Emeril Lagasse
as celebrities that helped to build its brand.

But Scripps, which acquired a 56 percent controlling
interest in Food a year ago, ultimately wanted its own management in charge.

"It was strictly a disagreement of where we want to go
in the future and who Scripps wanted to lead," said Ken Lowe, who oversees all of the
Scripps Networks, in addition to being president and CEO of its Home & Garden
Television. "Part of it was Scripps' tendency to want our own team. We just wanted a
new leader and new direction."

Scripps acquired a majority stake in Food from A.H. Belo
Corp. last year. The company announced Ober's appointment to Food's staff at a meeting
here last Thursday, and it said it plans to put more resources -- both money and personnel
-- behind the network.

"The issue is to take it up another notch, as Emeril
would say," Ober said.

Ober, 57, most recently was president and CEO of
Scripps-owned Cinetel

Productions, where he has been producing reality
programming for a handful of cable networks. He said he has had "a two-year learning
curve" in terms of the ins and outs of the cable industry.

"My strength is informational programming and
production issues," said Ober, who served as president of CBS News from 1990 through
1996, and who was president of the CBS owned-and-operated TV stations prior to that.

Scripps plans to broaden Food's appeal, according to Lowe.
Part of that strategy is to steer its programming more toward non-studio-based series and
special events in the United States and abroad.

"The issue is to build on our strong studio
programming by broadening its base," Ober said. "We want to get out of the
studio and do special events and stunts to increase viewer sampling."

Gruen -- who was with Saatchi & Saatchi Advertising
before coming over to Food, and who also helped to launch Bravo -- insisted that there was
no disagreement over the channel's programming direction.

She said the network had already started to push beyond its
New York studio-based shows, but budget limitations slowed that effort. In fact, Food's
total budget was equivalent to what some cable networks spend on programming alone, she
added.

Gruen said it wasn't a question of making studio-based or
non-studio-based shows, but "a question of making programs that people want to
watch."

She added that's she's proud of her accomplishments at
Food, and of the fact that Scripps -- which had an interest in Food several years ago --
came back as an owner last year.

In the third quarter, Food's primetime ratings were up 50
percent, to a 0.3 from a 0.2, according to Nielsen Media Research, although its total-day
ratings were flat at a 0.2.

"I'm leaving on a high," Gruen said.

Food is unusual as a cable network because it only has one
revenue stream: ad sales. It cut a 10-year original carriage deal, under which operators
pay the network no licensing fees. In the third quarter, Food posted revenue of $10
million, and a cash operating loss of $2.3 million, according to filings by Scripps
Networks' parent, E.W. Scripps Co.

While Food has many admirers, the quality of its
programming has caused some on Madison Avenue to gripe. And the network has received some
particularly bad press relating to two of its TV chefs -- Lagasse and David Ruggerio --
during the past two weeks.

"Erica was good … but I'd like to see them spend
some money on programming," said Jon Mandel, co-managing director of ad agency
MediaCom. "You can't do it on the cheap. The production quality is terrible. The
promotion has been terrible."

But Mandel isn't convinced that Ober is the answer to
Food's problems, either.

"Eric is more of a businessman, but I don't know if
that's where they need help," he said.

MSO officials are waiting to see what happens with Ober,
but they like the game plan.

"I'm sorry that Erica's gone," said Patty
McCaskill, vice president of programming for Charter Communications Inc. "Food
Network has made progress and improved. They have plans to broaden the network to cover
the total scope of food in our lives -- not just cooking, but nutrition and other
areas."

The network suffered two black eyes in recent weeks. The
New York Times
rana devastatingly critical story about Lagasse and his hit
show, Emeril Live!.Then Ruggerio -- the star of Food's new primetime
series, Ruggerio to Go! -- was charged with fraud for allegedly inflating tips on
customers' credit-card bills for meals at his restaurant.

Also last week, Scripps Networks unveiled a reorganization,
in which many of its executives got promotions, including Lifetime Television alumnus Judy
Girard.

Girard -- whom, sources said, had been offered Gruen's job
-- was named senior vice president for programming and content development. She will work
with all of the Scripps Networks to develop programming and oversee production.

Susan Packard, HGTV's chief operating officer, got the
additional title of executive vice president for affiliate sales, international and
new-business development for Scripps Networks. And Ed Spray, HGTV's executive vice
president, was named executive vice president of programming, new media and research for
Scripps.

Also as part of the reorganization, Lowe will now serve as
chairman and CEO of Food.

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