Less than an hour before midnight on Election Night 1997, the two candidates for New Jersey's governorship were separated by just a few thousand votes; at 11:30 p.m., a prominent news radio station in the region proclaimed that upstart Democrat Jim McGreevey had upset the incumbent Republican Christine Todd Whitman to become the state's next governor.

At the same time, however, producers at CN8, a year-old regional network serving Philadelphia and surrounding areas in New Jersey, Delaware and Maryland with only 60 journalists ? many inexperienced ? on staff, were hearing from sources in Morris County, N.J., a GOP stronghold, that there were 20,000 votes in their district that would, in fact, edge Whitman past her opponent. Six minutes later, CN8, which is owned and operated by Comcast Corp., became the first media outlet to reverse that verdict and call the election for Whitman ? a call that turned out to be right.

But the scoop didn't come easily. Michael Doyle, founder of the network and now president of Comcast's Eastern Division, remembers how green his staff was. ?We had people who, just the day before, might have been covering a high school sporting event, and now they were running information around through a very intricate network of sources. It was surreal.?

Four years later, CN8 televised the final gubernatorial debate between McGreevey, a candidate again, and opponent Bret Schundler (McGreevey won last week's election by a wide margin). Comcast has nearly tripled its subscriber base and is vying to become the largest cable operator in the land, and the network is celebrating its fifth anniversary, despite the vicissitudes of the advertising market and a difficult operating climate for MSO-owned news channels.

In fact, CN8 has thrived ? Comcast is distributing the channel to 450,000 more of its basic subscribers and its programming earned 24 local Emmy nominations ? in a year when two of its MSO-owned network brethren have wilted.

Adelphia's Orange County Newschannel and AT&T Broadband's Bay TV, both based in California, transmitted their final signals earlier this fall, the victims of too many fiscal periods awash in red ink.

Though operator-owned local networks haven't all drowned in losses, the underlying business model is undoubtedly a difficult one. Given the networks' ownership by an operator, it makes little sense for that operator to pay per-subscriber fees to the network, thus stanching a considerable portion of most networks' revenue flow and making it ? for a cable network ? unusually dependent on advertising. What's more, many MSO-owned nets have focused on local news, thus incurring steeper costs than for sports or entertainment programming.

As Philip Balboni, founder and president of New England Cable News, co-owned by AT&T, told Cable World recently, ?There's not a cable news network of any size that can exist without license fees. [They] account for anywhere from half to 60% of revenue ? they are critically important.?

But despite a financial deck so seemingly stacked against it, getting the go-ahead from Comcast chieftains Ralph and Brian Roberts to start CN8 wasn't overly difficult, according to Doyle. By 1995, the operator had enough subscribers ? nearly 1 million ? in New Jersey and Pennsylvania to justify interconnecting all the systems with a common strand of fiber to make ad sales more efficient. The fiber also could be used to distribute programming. ?My reasoning was that when people turn on their TV at night,? says Doyle, ?when they see something that has Comcast identified with it, it changes the consumer's perception of Comcast.?

Doyle, who had been on the operations side of Comcast since 1983, approached Brian Roberts, who gave a swift blessing; it certainly didn't hurt that Doyle, both by his own reckoning and that of colleagues, had developed a reputation around the MSO's Center City offices as a tough bottom-line watchdog.

Five years later, the faith in CN8 appears to have been justified. Though neither current CN8 GM Jon Gorchow or Doyle would divulge specific ad-revenue figures for the network, they said that the network had met its five-year projections for keeping expenses in line and had exceeded its hopes for revenue.

(The network shows up in the ?Content? section of Comcast's ledgers, but its results aren't separately recorded.)

ABN Amro cable analyst John Martin sees CN8's value not so much in pure revenue terms but in its ability to help drive subscribers and buffet its stature in the community. ?I don't think it's a major detractor or contributor for earnings,? he says. ?At best, it ? like other local channels ? will generate predictable, modest cash flow. But it's a nice platform for Comcast to offer content that its subscribers can't get anywhere else and to help cross-promote other services.?

Because it focuses on a particular region, it can tailor its programming to local tastes. The network does things that make sense for its audience, as well as its advertisers. In an instance of reverse ad-sales engineering, CN8 debuted a program this fall called Ultimate Weddings.

?Our ad sales team came to us after meeting with advertisers and told us the wedding business in this market is really booming,? explains Gorchow. ?Sales of wedding apparel is up in various locations; it's a very booming business. And we concluded that if business was booming, there must be a lot of people interested in planning the perfect wedding, and we decided to create a program around that.?

The network's programming slate is varied. A nightly live-music and comedy series called CN8 Presents: Comcast in Concert, which has featured concert footage of such Jersey rock gods as Bruce Springsteen and Bon Jovi as well as Sheryl Crow and Santana, has been a popular offering. Two of the network's first programs ? Real Life and It's Your Call, both live call-in shows that receive as many as 40,000 calls in a given hour ? are still on the air. And to help fill the late-afternoon hours, CN8 has programmed more than 200 hours of live high school sports each year.

The network also has relationships with various well-known Philadelphia entities; Philadelphia Business Journal and Philadelphia magazine, for instance, produce co-branded segments on CN8's news programs. In return, the network gets ad space in the magazines and raises its profile in greater Philadelphia.

And then there are the synergies within the Comcast family: The operator's E! Entertainment network produces a segment on entertainment especially for CN8's twice-nightly newscasts.

Overall, as ratings are concerned, Gorchow says that the network compares favorably ratings-wise with the local WB and UPN affiliates, though it still lags behind the Big Four network stations in Philadelphia.

Nonetheless, CN8 has been aggressive about building its news operation and has recruited veteran talent from Philadelphia's broadcast newsrooms to staff its anchor desks.

?They do a very professional job with good production values, especially for a network that's so new,? says Gail Shister, television critic for the Philadelphia Inquirer. ?But the smartest thing they did was to get already-established area talent for their staff.?

One of CN8's highest-profile additions when it began its nightly newscasts last year was Arthur Fennell, who joined the network after leaving NBC-owned WCAU-TV. ?This is much more hands-on in terms of approach and attitude, said Fennell. ?If I have an issue, all of my bosses are in Center City Philadelphia, and they're people I feel I know and can interact with. At a broadcast station, a lot of times you work for people who exist only in name or on a letterhead.?

Comcast's plans for CN8 are ambitious. ?I could envision a day when all Comcast systems would get CN8,? says Gorchow, ?and we would adopt more of a broadcast model where certain dayparts belong to the network and certain dayparts are taken over locally. Local news and local sports would obviously have to adjust?as we continue to grow.?

Doyle, for his part, would like to see CN8 expand as well, but recognizes that for such growth to happen, clustering ? wherein an operator controls a significant amount of systems within a geographic region ? is key. ?You've got to have a sufficient subscriber base in a given area to be able to provide revenue that can help fund good programming,? he says. ?Only that way can you really justify the expense. But if you get the clustering and the consolidation, you can make it work.?

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