A&E INTENDS TO STAY INDEPENDENT

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(June 12, 2001) -- Even with the increasing movement in the media alignment toward a handful of multi-platform companies, one cable executive said he expects to continue operating independently, at least for the time being.

Industry speculation holds that A&E Television Networks may have a difficult time competing with behemoths such as Viacom and AOL Time Warner, forcing it into some type of merger.

But A&E President-CEO Nick Davatzes said at the National Cable & Telecommunications Association convention in Chicago that not only does he think his company can compete, but its unusual ownership structure would complicate an merger or takeover.

The company, which operates the successful A&E and History Channel cable outlets, is jointly owned by the Hearst Corporation (37.5%), Walt Disney Co.'s ABC (37.5%) and General Electric's NBC (25%).

"I don't think it's likely that anything's going to change since everyone seems to want a greater piece of my body," Mr. Davatzes said. "It is absolutely something we shouldn't say we will never consider, but at the moment we're taking the independent course."

The long-time A&E head also said that the rollout of digital cable, allowing for hundreds of channels in homes, may hurt large cable networks' viewership just as those one-time upstarts stole viewership from the broadcast networks years ago. Cable companies are launching digital networks in advance of the expected digital revolution that Mr. Davatzes said could lead to a new type of viewer migration -- from what he called the "landed immigrant channels" such as ESPN, CNN, USA to the rash of new niche channels.

"What we did to the broadcasters, we are now doing to ourselves," he said. David Goetzl

Copyright June 2001, Crain Communications Inc.

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