NBC has made no secret of the fact it wants an established, ad-supported basic cable entertainment channel to complement its MSNBC and CNBC networks. It also has pieces of a number of other networks, including Arts & Entertainment and American Movie Classics.
USA IN 69 MIL HOMES
USA Network is available in about 69 million homes. Revenues in 1995 were $500 million, making it No. 9 in the cable industry.
A move for USA Network, said to be valued at $3 billion, could set up a bidding war with CBS. Michael Jordan, chairman of CBS parent Westinghouse Electric Corp., told reporters a few weeks ago CBS would be interested in USA should it become available.
NBC had no comment.
As recently as eight weeks ago, NBC executives had decided that buying an existing entertainment network was probably not in the cards. The company had tried, and failed, to obtain a controlling interest in International Family Entertainment's Family Channel.
USA TALKS BROKE DOWN
In late October, however, the co-owners of USA Network-Seagram Co.'s MCA and Viacom-ended talks that would have led to Viacom acquiring the MCA portion of USA for $1.45 billion. The deal fell apart over taxes that MCA would have had to pay if the pact was consummated.
Those talks were initiated to settle a lawsuit filed by MCA as it sought to force Viacom to sell its 50% stake in USA to MCA. That suit is still pending.
"What we know from the filing of the suit and the aborted settlement talks is that both MCA and Viacom are willing to sell," said one of the executives familiar with the situation. "All NBC has to decide is if it can come up with a figure for the network, which would be about $3 billion plus whatever it takes to settle the tax liabilities from a sale."
As part of any pact, NBC would likely tie in programming deals with both Viacom's Paramount Pictures TV unit and MCA TV.
As for Westinghouse, even after it splits off its industrial units, as planned, CBS will be strapped with a mountain of debt from its $3.9 billion acquisition of Infinity Broadcasting Co.
While Mr. Jordan said the company's debt situation will not affect any serious acquisition opportunities, it appears that NBC, with the backing of parent General Electric Co., would be in a strong position in a bidding war for USA.
It is unclear whether NBC and CBS also would be interested in the Sci-Fi Channel, also part of the USA partnership arrangement between Viacom and MCA.