Will GM Bypass Upfront?
General Motors Corp., the nation's largest cable TV advertiser, has stalled its engines in the 2002-'03 upfront network cable TV advertising marketplace, Media Buyer's Daily reports. GM's Mediaworks unit, which invests about $250 million dollars in cable TV each year, according to Cabletelevision Advertising Bureau estimates, has been holding the line on advertising cost increases in its negotiations with top cable entertainment networks. Now cable ad execs wonder whether GM might bypass the cable upfront altogether and gamble on buying ad time during the 2002-'03 scatter market. The move would be surprising, said one top sales exec, because GM was especially aggressive in the broadcast network upfront and has been boosting local TV ad buys in recent months. But a buyer for a GM rival agency said it was possible that GM missed its planning costs during the broadcast upfront and was seeking to balance its budget by holding the line on cable deals.
Who'll Tackle Adelphia Job?
As if Adelphia CEO Erland Kailbourne didn't have enough on his plate. The former banker is urgently trying to cobble together a management team to run day-to-day operations. Kailbourne hopes to bring in a COO by the time Adelphia's board submits its reorganization plan to the bankruptcy court 120 to 150 days from now, says company spokesman Lisa Wolford. That executive, who will require cable experience, will be groomed to take over the CEO spot, she adds. The company is also looking to add three or four new board members with cable experience. Sources close to the company say few executives are willing to move to the out-of-the-way hamlet located in the northern Appalachian mountains of rural Pennsylvania. A story in the Los Angeles Times last week suggested three possible candidates: former Charter Communications CEO Jerry Kent, YES chairman Leo Hindery and Continental Cablevision founder Amos Hostetter. Kent and Hindery may entertain the notion of taking board seats, according to sources close to them. Kent was unavailable and Hindery declined comment. Hostetter, who has admitted he's interested in buying some Adelphia systems should they come on the market, is apparently not interested. He also declined to comment. ?Adelphia is looking for managers, not entrepreneurs,? says the CEO of a top ten MSO. ?Those guys aren't what Erkie [Kailbourne] needs.?
S-A Cuts 1,300 Jobs
Signaling what may be further slowing in digital cable's growth, Scientific-Atlanta has cut 1,300 jobs at its Juarez, Mexico, plant, the main facility for production of its Explorer set-top boxes. The cut represents 16% of S-A's total workforce. S-A's digital set-top sales accounted for more than half its $2.5 billion revenue in 2001. Adelphia's problems may have contributed to S-A's cutbacks; the MSO accounted for 18% of S-A's sales last year. S-A said it would evaluate additional restructuring possibilities due to reduced product demand. S-A spent tens of millions of dollars last year to increase production at Juarez, from 1 million set-tops per quarter to 1.5 million.
WINfirst Auction Delayed?
The city of Los Angeles plans to file an objection to the bankruptcy sale of overbuilder WINfirst this week, which could delay an auction scheduled for Wednesday, according to a city source. The city objects to the auction because it isn't clear whether the overbuilder's franchise agreement with Los Angeles is included in the sale. The city is due about $500,000 in franchise fees from WINfirst come September. Last month the auction was prompted by a $12 million bid by SureWest Communications, which wants WINfirst's Sacramento franchise. But neither SureWest nor WINfirst explained whether the other franchise agreements would be included in the sale. Rich Eposto, executive director for the Sacramento Metropolitan Cable Television Commission, says he doubts anybody will top SureWest's bid.
Ruling Against Gemstar
Gemstar suffered a blow last week when a North Carolina judge ruled that EchoStar products do not infringe on three patents Gemstar licensed from SuperGuide Corp., and asked for more information about a product EchoStar no longer produces. Gemstar and SuperGuide are fighting over the right to license these patents for the satellite TV field.
Cable World on Holiday
Cable World will begin biweekly publication for the rest of the summer starting with the July 22 issue and ending with the issue of September 2, when regular publication will resume. Double issues will be published on July 22, Aug. 5 and Aug. 19.
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