DISCOVERY AND CBS IN CABLE TV TALKS

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CBS is negotiating with Discovery Communications to start a new ad-supported cable channel.

The working title of the channel is "Eye on People," and it would carry a cross between biography and E! Entertainment-style programming, according to CBS insiders. That probably wouldn't be its final name.

The deal would advance CBS-parent Westinghouse Electric Corp.'s grand plan to expand the TV brand into cable.

Westinghouse recently bought a Spanish-language cable news network, and will rename its CBS TeleNoticias for introduction into the U.S. later this year.

PLAYS OFF `EYE ON AMERICA'

The working name for the CBS/Discovery venture is a take-off on the "Eye on America" segments that appear on the "CBS Evening News." CBS News Productions would be involved in developing programming for the new network, though it would neither be programmed nor positioned as an all-news channel.

"It's no secret that CBS has been talking to a number of potential partners about opportunities in cable programming," said Jim Boyle, senior VP-corporate communications for Discovery. "We are one of those companies."

CBS declined to comment.

FAMILY CHANNEL BREAKDOWN

CBS earlier had talks with Family Channel-owner International Family Entertainment about investing in that company (AA, May 20). Those talks broke down, insiders say, primarily over issues relating to control of MTM Productions, the production and syndication arm of IFM.

"It's a real shame," said one CBS executive. "Our programming would be a great fit with Family."

CBS also has had discussions with Landmark Communications about the Travel Channel, say industry executives. That cable network is on the block; earlier this year it was reported that Discovery was in negotiations to buy Travel, but the deal unraveled.

One of the biggest hurdles a CBS/Discovery deal faces is the issue of exclusivity. With the threat of heated competition from the telecommunications industry, cable operators are demanding that new channels be exclusive to cable and satellite-dish delivery.

But federal law forces a programmer that's vertically integrated with a cable TV operator to sell its services to all comers. Discovery is co-owned by two large cable operators-Tele-Communications Inc. (through its Liberty Media) and Cox Communications.

"How to structure the CBS/Discovery deal to keep the channel cable exclusive is definitely one big issue," said an executive familiar with the talks.

OWNERSHIP OPTION

"Another issue is how to give the cable operators who don't own Discovery some sort of ownership option so they will also carry the channel," he added.

CBS and Discovery already have a working relationship. Discovery's Learning Channel was scheduled to air a CBS News Productions show yesterday about the O.J. Simpson trial. And reruns of CBS specials featuring former General Norman Schwarzkopf have run on the Learning Channel.

CBS and Discovery also are talking about a programming agreement, CBS insiders said.

In that deal, CBS would continue to produce programming for Discovery and could receive a programming block on one of Discovery Communications' channels. Discovery would also provide programming, likely on natural history subjects, to CBS.

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