Nostalgia Network Inc., the parent of struggling GoodLife TV Network, is following through on a longstanding plan in which its largest shareholder would buy the rest of its outstanding stock for about $1.4 million, essentially taking the company private.
According to a proxy statement filed Oct. 25 with the Securities and Exchange Commission, Concept Group Inc., which owns about 70 percent of Nostalgia stock, will purchase the remainder from investors for 7 cents per share.
That price is about double the level that Nostalgia's stock has traded at for the past several months. Sold on the NASDAQ over-the-counter bulletin board, Nostalgia shares closed unchanged at 4 cents each on Oct. 30.
Outside of Concept, Nostalgia's largest individual shareholder is CEO Squire Rushnell, who owns about 840,000 shares, or 4.1 percent of outstanding stock. Nostalgia plans to hold a special shareholder meeting to approve the merger. The company has not yet set a date for that meeting.
Rushnell has said that taking Nostalgia private could increase its chances of finding the strategic partner it has sought for years. The network has struggled for years and its cumulative losses between 1995 and 1999 have been almost $80 million. Although Nostalgia said in the proxy statement that it has had contact with several possible partners, so far "no serious discussions have occurred."
For the past few years Concept, which has ties to Rev. Sun Myung Moon's Unification Church, has been funding Nostalgia's operations, through equity and debt instruments. According to the proxy statement, Nostalgia owes Concept about $92 million.
Protecting that investment is one of the main drivers for the buyout, according to the proxy statement.
Nostalgia had about 9.2 million subscribers as of Dec. 31, 1999, according to the proxy statement. About 44 percent of those subscribers were with three groups-Time Warner Cable, AT&T Broadband and the National Cable Television Cooperative, a consortium of small, independent cable operators.
GoodLife TV primarily targets the "baby boomer and over" demographic, and until recently relied on such programming staples as off-network reruns of vintage series like
The Adventures of Ozzie and Harriet.
Nostalgia has spent money on new programming and aired nine new shows last year, including
Heroes and Sheroes, which profiles ordinary men and women who have performed heroic tasks for the benefit of others, and
GTV DanceSport, which follows national ballroom and performance-dancing competitions.
Although the reported subscriber count has grown-GoodLife had about 7.7 million subscribers in 1999-only about 4.6 million subscribers are on full-time analog tiers. The rest are either part-time or carried via digital cable and C-band satellite transmission.
For the six months ended June 30, revenue was up 14.8 percent, to $3.1 million from $2.7 million, mainly due to an increase in advertising revenue.
Last year, Nostalgia began a transition away from national advertising to focus on direct-response ads and info-mercials, largely because it cannot deliver attractive demographics to advertisers. Aside from catering to an older audience, GoodLife TV also is available mainly in rural areas.
For the period, ad revenue was up 36 percent, to $2.04 million from $1.5 million in the same period last year. The net loss for the six-month period was also down slightly-to $10.1 million (50 cents per share) from $10.7 million (53 cents per share).