Outtakes: Knicks, Kicks, Now Electronics


When Cablevision Systems said last week that it was buyingthe failing Nobody Beats the Wiz stores, the first thing that came to mind was the Seinfeldepisode where Elaine is dating the guy who played 'the Wiz' on the TVcommercials. When she found out that he played a tacky pitchman, Elaine was appalled.

That's what many analysts thought when they heard the news.Cablevision's stock dropped $2 per share.

That also pretty much summed up the attitude of most peoplewho shopped at the Wiz. As the saying went, 'Everyone Beats the Wiz.' Analystsblamed the consumer-electronics chain's demise on overexpansion in a crowded market thatis undermined by skintight profit margins.

Actually, it was a terrible store.

Service was brusque and ignorant at best, and prices wereaverage at best. When the smoothly run Circuit City -- known as the 2,000-pound gorilla ofthe consumer-electronics business -- came to New York, the family-owned Wiz couldn'tcompete. And its ill-advised expansion hastened the chain's demise.

The ironies run deep: The public has long placed cableoperators next to civil servants in their commitment to customer service. Now, Cablevisionis taking over the chain with a vow to turn it around and to focus on service and on thecustomer.

Last week, critics were crying, 'What does a cablecompany know about running an electronics chain?'

'Retail requires a completely different mind-set andpersonality,' railed veteran retail/management consultant Jules Steinberg. 'Itreminds me of Seven-Up buying all of those pizza places.'

The ironies abound. Cablevision will compete againstitself, selling DBS hardware. What a great idea, said Jonathan Thompson, a vice presidentat the Consumer Electronics Manufacturers Association. 'Cablevision is saying,'If we're going to lose customers, let's keep the customers in the family.''

But might Cablevision try to talk prospective DBS buyersout of a dish and into an Optimum Gold upgrade? 'The customer makes the decision, notthe salesperson,' Thompson insisted.

Cablevision is saying little about being in the DBSbusiness, other than to assert that many of its best customers also own DBS equipment. Butsome satellite dealers aren't sure what Cablevision is up to.

'It gives them a shot to tell the consumer,'Let metell you what the cable system can do for you,'' said Elly Valas, executive directorof the North American Retail Dealers Association, which represents independent electronicsdealers.

The key, Valas and others agreed, will be in the service:Cablevision can't sell like Circuit City -- a 'commodity buy' based largely onprice. To pitch people on cable modems, new interactive set-tops and telephony, it willneed sophisticated salespeople who are willing to take the time to explain all of thesefancy features to both the average Joe and to Web surfers.

People will need a reason to come back to the Wiz.Cablevision boasted that the Wiz enjoys huge brand-name recognition. Well, so did thePinto.

Still, there's plenty of reason for Optimum optimism.Cablevision insists that it knows that the personal touch will be key to making the Wizwork. They talk about how commission-oriented salespeople have little incentive at moststores to spend much time with customers. At the Wiz, salesmen sized up customers in lessthan a minute, ignoring those who looked like mere browsers.

Cablevision vows to change all of that and to use thestores as outlets of cable offices; as showcases for its shiny, high-tech future; and as aplace to sell tickets for its other holdings: Madison Square Garden and Radio City.

CEO Jim Dolan is promising 'unparalleled service andsupport.' That's critical.

Moreover, as another top MSO executive pointed out,Cablevision stands to exploit the Telecom Act, which will allow retailers to sell set-topboxes -- a major piece of the OpenCable picture.

Further, the price was right. Cablevision is buying the Wizon the cheap, and it has relatively little to lose, even if the chain collapses. And withits new, huge, tight tristate cluster, Cablevision can more easily market its regionalbusiness.

Finally, I couldn't help recalling this:

In 1967, Cablevision chairman Chuck Dolan was the first toair New York Knicks and Rangers games live from Madison Square Garden. He also startedHBO. Just like now, people scratched their heads.

So, when the Dolans do something a little off the wall, youhave to take notice. Anyone see Cablevision's stock price recently?