The talks follow the Family Channel's rebuff of an NBC bid to acquire control of the cable network. Sony Corp. also is said to be interested in some kind of a deal.
Tim Robertson, president of parent International Family Entertainment, confirmed the Family Channel is talking to entertainment companies but said a deal isn't imminent.
"And," he added, "we may decide not to make a deal."
CBS has stayed away from cable TV after an initial, disastrous foray with an arts channel in cable's nascent days. But CBS' new owner, Westinghouse Electric Corp., is a major player in cable. Westinghouse has interests in the Nashville Network and Country Music Television; Chairman Michael Jordan has said CBS will make a cable play, though declining to identify what that might be.
THE TCI FACTOR
NBC made a significant offer for the Family Channel, say executives familiar with the proposal.
John Malone, president-CEO of Tele-Communications Inc., which owns 20% of International Family Entertainment through its Liberty Media Group subsidiary, declined to talk specifically about the NBC proposal. He did say, however, that "the issue in any deal with IFE is control. Liberty isn't interested in becoming a passive investor."
Mr. Robertson and his father, Pat-the latter through a trust-own 16% to 25% of International Family Entertainment. The Christian Broadcasting Network and Regent College in Virginia Beach, Va., are the other major stockholders, with about 7% to 8% each. The rest is publicly held.
The control issue is said to be what killed an NBC/Family Channel deal.
CRUCIAL `CONTROL' ISSUE
"NBC likes Tim and they were willing to have him stay," said one insider. "And they were even willing to let Pat's `700 Club' stay on the network. But otherwise, they wanted total control and, ultimately, that didn't fly."
While the Family Channel is available in more than 63 million households, it would like a major infusion of capital to bring its programming to the next level.
"Liberty thinks Family could be a real franchise, like Disney or Nickelodeon, if it was programmed and promoted right," said one insider, "so they don't want to lose control. I hear they are discussing a bigger share themselves."
The Robertsons might be willing to reduce their stake in the network if the price was right. But whether they would give up total control is another issue.
Ad revenue at the network was about $107.5 million last year, according to Paul Kagan Associates. The network could be worth as much as $750 million.
"Well-established entertainment channels on cable are a scarcity and can demand a premium," one executive said.