Debt-ridden Paxson Communications Corp., which has
committed $72 million to buy cable carriage for its Pax TV network during the next five
years, will be asking MSOs to take part of their payment in Paxson stock rather than cash.
Paxson, which launched its family-oriented network last
August, has been paying MSOs upfront cash launch fees in order to gain distribution for
the network in markets where Paxson doesn't own or have a TV station affiliate.
In papers filed last week with the Securities and Exchange
Commission, Paxson said it is in discussions with MSOs to reduce "its cash
obligations for 1999 cable distribution rights in exchange for the company's stock at
a negotiated strike price."
Paxson said it originally owed cable operators $50.9
million this year alone in exchange for distribution of Pax TV. But Paxson sold its
remaining 30 percent stake in Travel Channel last month for $55 million to Discovery
Communications Inc. And according to its filing, Paxson is applying $20.1 million from
that sale toward this year's upfront cable-carriage payments, shaving down what it
has left to pay to $30.8 million from $50.9 million.
Citing a soft advertising market and escalating program
costs, Paxson is looking to sell off assets this year, including some of its TV stations,
"in order to improve its liquidity position during the next 12 months," the SEC
In 1998, Paxson racked up $138 million in losses. In the
fourth quarter, Paxson had a net loss of $76.4 million, according to the company.