[04/21/05 - 12:00 AM]
NBC Universal Statement on Paxson Communications' Intention to Terminate Operational and Joint Service Agreements

[via press release from NBC]


Paxson Communications Corporation has notified NBC Universal that it seeks to terminate Paxson�s network, national and local sales agreements with NBC Universal, as well as the joint sales agreements between Paxson and stations affiliated with the NBC network. Paxson apparently intends to abandon network programming and rely primarily on infomercials, direct response advertising and paid programming as revenue sources.

NBC Universal strongly disagrees with Paxson�s attempt to terminate operational agreements that sustain the company and its stations as a broadcast network. We believe that the elimination of all sales and local operational capabilities will reduce the long-term value of the company and its station assets.

We have expressed repeatedly to Paxson management and the Board of Directors our concerns regarding Paxson�s desire to change its business strategy in a manner that will negatively impact Paxson�s asset value. We believe that the adoption of a paid programming model will jeopardize Paxson�s long-term financial prospects in light of its highly leveraged balance sheet, and is not in the best interests of Paxson stakeholders.

Paxson�s attempt to terminate its sales agreements with NBC Universal and to abandon network programming constitutes a breach of the contractual agreements between Paxson and NBC Universal. NBC Universal will not agree to this course of action in the absence of a viable new business plan that preserves and maximizes the value of Paxson�s assets.

  [april 2005]  

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