Wired World Rising: Allen's Vulcan Puts Pinch On ZDTV For $204.8mln
Nov. 22, 1999 (CABLEFAX, Vol. 10, No. 227 via COMTEX) -- Ziff-Davis
[ZD] agreed to sell its 64% interest in ZDTV to Paul Allen's Vulcan
Ventures for $204.8mln, augmenting Allen's stake in the net to
approximately 97%, and expanding his "Wired World" strategy further
into the content realm. With ZDTV, look for Allen to match the net
symbiotically with Vulcan's corporate cousins. One such match could
include a marriage between ZDTV's computer-related programming with
high-speed services offered through Allen's 38.9%-owned HSA Corp
[HSAC]. "ZDTV and HSA have been exploring ways to work together toward
common goals and Vulcan's acquisition certainly helps to cement our
relationship," HSA VP of Corp Comm Andy Holdgate said. "Examples of
where we can work together include supporting our common affiliates in
marketing digital TV and cable-modem services to their customers and
utilizing ZDTV's streaming video as value-added content." Though ZDTV
has a new man behind the scenes in Allen, not many operational changes
are expected at ZDTV right away, a Vulcan Ventures official said. For
now, the ZDTV name will remain in the form of a licensing deal between
the cable net and Ziff-Davis, while the 2 companies maintain a content
relationship, including a joint news org and co-development and
promotion of programs. ZDTV, which reaches 14mln HHs, expects to
stretch that to 16mln by year's end, a seemingly achievable goal
considering Allen's Charter Communications [CHTR] will have 6.2mln
subs, up from the current 5.5mln, once it seals its deal to acquire
Bresnan. And then there's that 27.4% stake Allen holds in competitive
cabler RCN [RCNC]. ZDTV is available to roughly 2mln Charter HHs,
sources said, so there appears to be plenty of room for the full-time
computer net to find new homes. Though ZDTV pulled down $9.3mln in
revenue in 3Q and has reached new distribution heights, it has put a
strain on ZD's books, so much so that ZD hired Morgan Stanley in July
to explore its options. Well, selling ZDTV to Vulcan is a start. The
deal, which pegs ZDTV's total value at $320mln, is expected to close
within 45 days, pending regulatory approvals.
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