FOX KIDS, FAMILY CHANNEL PONDERING PARTNERSHIP PROPOSED LINK COULD CREATE A POWERFUL COMPETITOR FOR NICKELODEON

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Fox Kids Network and International Family Entertainment are in talks about IFE's Family Channel becoming the cable outlet for Fox Kids programming.

Discussions have included a proposal that Fox Kids shows run up to 12 hours a day on Family Channel, said one executive familiar with the discussions.

HOW BRANDED?

It's not known whether or how the channel, or the kids programming, would be branded. But if consummated, the deal could make Family Channel a serious competitor to Viacom's Nickelodeon and Walt Disney Co.'s current and proposed kids cable networks.

Neither IFE nor Fox would comment. But Margaret Loesch, Fox Kids Network chairman-CEO, told affiliates in New Orleans at last week's annual winter meeting discussions about a Fox Kids cable venture now center on "when, not . . . if," with a target launch date of next year.

Separately, IFE President Tim Robertson has made no secret of the fact that he's looking for the right partner to take Family Channel to the next level.

PROFITS TO STATIONS

With 179 Fox stations currently carrying 19 hours of Fox Kids programming, a cable venture would seem cannibalistic. But under the new Fox Kids Worldwide agreement with Saban Entertainment, the Fox Kids stations will get 50% of any net profits from a cable deal, less a 15% administrative fee.

Also, Ms. Loesch said any cable block would give Fox "unmatched cross-promotion" between the cable and broadcast blocks.

Fox Kids Network currently covers about 97% of the country, more than any other kids programmer. More than 50% of all 2-to-11-year-olds that watch kids programming watch some Fox Kids shows at least once a month, according to figures from Nielsen Media Research.

News of the Fox-IFE talks comes as advertisers and kids programmers prepare for this year's upfront sales period. Last year's kids market reached about $725 million.

In a Securities & Exchange Commission registration filing for Fox Kids Worldwide, Fox Kids Network said it wrote $110 million worth of business last year from the nation's top 20 kids advertisers, which it estimated was 45% of those advertisers' total kids budget.

CHANNEL STRUGGLES

But Family Channel, like many other programmers, has been struggling in the kids marketplace. It only programs two to three hours on Saturday and Sunday mornings, and the shows don't do very well in kids demos.

Another executive added that any Fox Kids cable venture would likely feature a combination of original and library product. Saban alone has 3,721 hours of children's programming in its library, and Fox Kids Worldwide plans to acquire

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