Saban Insists Hes Sticking, Not Putting

Author:
Updated:
Original:

LOS ANGELES -Despite his past frustrations with Fox Family Channel, Haim Saban steadfastly maintains he has no intention of exercising his option to sell his stake in parent Fox Family Worldwide Inc. at the end of December.

Saban, chairman of Fox Family Worldwide, can sell his 49.5-percent piece of the company to his partner, Rupert Murdoch's News Corp., by Dec. 31.

This summer, news stories claimed Saban was looking to sell. He denied it back then, and denies it now.

"I have a 'put' at the end of December to sell my shares for their value at the end of next January," Saban said. "So if by Dec. 31, I say I've had it, the value I would get would be established as of Jan. 31, 2001."

Despite the so-called "put" option that's about to expire in his partnership agreement, Saban said he's not a seller. He claims he's heartened by Fox Family's progress under its new management team, which includes Maureen Smith as president of Fox Family Channel and the Fox Kids Network, the children's programming block that airs on News Corp.'s Fox broadcast outlets, and Tracy Lawrence as general manager.

Smith became the permanent replacement for Rich Cronin, one of a bevy of top officials who left Fox Family earlier this year.

"I do have a put at the end of the year, that's absolutely true," said Saban, speaking from a private conference room high atop the Wilshire Boulevard building that bears his name. "The only reason I had ever considered putting, let's say at a level of 100 percent, is frankly, I was extremely frustrated. The rest of the business is fine, but the Family Channel I was extremely frustrated with."

But changes have taken place, according to Saban. "And as I sit here today and I go to the staff meetings, and I see how the channel is run-and the team in place-I am totally re-energized about the channel," he said.

"I'm liking again coming to work. I did have a period of time, I acknowledge, when it was a very frustrating process because the difficulties we were having have been well publicized, and in addition to that I had a lot of internal difficulties.

"So with internal difficulties turning into a pleasure, and basically new leadership that's in place, in Maureen and Tracy, I feel that side of it is covered. That team will do wonders for the channel. And frankly, the ratings successes we've been having lately are helping to give us a little feeling of momentum. So I ain't putting [his shares]."

This past June, speculation swirled that Saban and News Corp. were shopping joint venture Fox Family Worldwide around-and looking for potential buyers for Fox Family Channel.

Another scenario had Saban trying to sell his nearly one-half stake to Murdoch for $6 billion, while Murdoch saw its value in the $4 billion range.

Reports that Murdoch, unhappy with Fox Family Channel's ratings, was looking to buy out Saban's stake first surfaced in May 1999. In the fall of that year, Fox Family took a $125 million loan from Fox Broadcasting Co. in order to avoid technical default on its loans.

Murdoch is still publicly critical of Fox Family Channel. At Fox Entertainment's annual shareholders meeting in November, he talked about his continued "frustration and disappointment" with Fox Family and its ratings. While everyone knew its transition from a religious channel-the Rev. Pat Robertson's The Family Channel-would be difficult, it was hoped the turnaround would have taken place by now.

But Murdoch indicated he's still supportive of the cable channel.

Despite Saban's claims to the contrary, a number of industry sources-including some inside Fox Family and News Corp.-believe he will eventually sell his stake. But they don't think he will sell now, for a variety of reasons. One reason, surprisingly enough, has to do with the presidential election.

Saban has been a huge supporter of President Clinton and Vice President Al Gore, and is an active Democratic fundraiser. If Gore had won, he may have found a role for Saban in his administration, perhaps an ambassadorship, according to several sources.

But with Gore looking like a loser, there's no incentive for Saban to sell his stake in Fox Family in order to fill a political slot.

Other sources said Saban-like many cable programmers-was thrilled to see the $3 billion price tag that Black Entertainment Television secured from Viacom Inc., even though the network has only about 63 million subscribers. Saban may now be willing to wait things out so he can get the kind of valuation he is seeking for Fox Family, which is fully distributed at 76 million subscribers.

Finally, Saban may be waiting for problems with his Fox Kids Network and Fox broadcast-TV network affiliate stations to get ironed out.

Since kids' programming has fared poorly with local advertisers, Fox's affiliates are negotiating to shift the Monday-through-Friday Fox Kids block to 2 p.m. to 4 p.m. from its current 3 p.m. to 5 p.m. The affiliates then could air news programming in that late-afternoon time period.

Saban needs a secure time slot for his kids' programming on broadcast, since that provides a platform to promote Fox Family. As part of the negotiations, Fox has reportedly asked for the rights to give its kids' programming a second run on the Fox cable outlets.

When pressed about his intention for Fox Family, Saban confessed that one person who is very important to him does want him to sell his stake in Fox Family: his 12-year-old son, who wants to spend more time with his father.

Related