RASCO, CNI to Explore Future Options

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New York -- Now that National Cable Communications'
new partnership arrangement has rained on their parade, executives at Rainbow Advertising
Sales Corp. (RASCO) and its spot-rep firm, Cable Networks Inc., are hoping that
there's good news somewhere over their rainbow.

NCC's revamped agreement has resulted in all
Tele-Communications Inc. and Time Warner Cable systems switching out of CNI by January --
billings losses that RASCO and CNI spokesmen conceded are "substantial."

The new NCC's other MSO partners -- Comcast
Corp.'s Comcast Cable Communications Inc., Cox Communications Inc. and MediaOne --
are already repped by NCC.

Adelphia Communications Corp. and Charter Communications
Inc. -- as well as RASCO's parent, Cablevision Systems Corp. -- are CNI's
largest remaining MSO clients, CNI senior vice president Deborah Cuffaro said last week.

CNI, however, continued to score in the regional-news
arena, with Cuffaro announcing that its newly formed Regional News Representation division
added Las Vegas 1, bringing RNR's news-network tally to 15 (including the five News
12 services operated by Cablevision), and bringing its total news-subscriber count to
about 13.8 million homes.

Las Vegas 1 -- which has been operating for about one year,
and which was previously repped in-house -- reaches 302,000 subscribers via Cox-owned
Prime Cable, said Holly Williams, RNR's director of news sales.

Looking ahead, RASCO and CNI sources said last week:

• RASCO and Cablevision should present a management
plan to again re-evaluate the viability of being in the national spot-sales-rep business
by the end of October. In late September, David Kline, president and CEO of RASCO, had
said in a statement, "CNI will remain in the ... business for as long as it remains
profitable for the company to do so."

• It has yet to be decided whether Cuffaro will move
over to RNR full-time. Sources said RASCO's top brass "still are evaluating
where people might be going," with much of that depending on the outcome of their
evaluation nearly a month hence.

But Cuffaro herself pointed out last Friday that as
CNI's senior vice president, she is also in charge of RNR.

Various industry executives agreed that the NCC-related
developments had loomed as a possibility for a long period of time, so "it's not
really a big surprise" for CNI, as one sales executive observed.

During the past nine months, RASCO and CNI management have
been looking into new business niches. They announced RNR last month and Rainbow
Interactive this past spring, the latter aimed at the Internet and other new-media
opportunities. There are "a couple of other concepts on the table," as well,
these sources disclosed.

Executives at the Cablevision-owned companies have conceded
that neither RNR nor Rainbow Interactive will generate enough business to offset the
losses to NCC. Still, CNI veterans -- recalling the fact that national spot wasn't
all that strong for the rep firm in the beginning, either -- expressed optimism that RNR
will "build on its strong base" to become profitable.

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