Here is an article in the WSJ today. I guess I am a little bothered that he altered his business plan "on the fly". But I am hoping that Bud is not a man who likes to throw his 60% down the drain. Regarding the religious programming: I am not fond of such programming but then again there is a huge market for that type of TV. His idea may work despite the critics. I just hope that the timeline is protrayed is conservative. Who knows what would happend to this stock if profits do not get realized.
Paxson Shares Fall 7.6%
Amid Plans for Family TV
By KYLE POPE
Staff Reporter of THE WALL STREET JOURNAL
NEW YORK -- Shares of Paxson Communications Corp. slipped 7.6% as Wall Street panned the company's plans for a new family-oriented television network.
Paxson stock fell 75 cents to $9.125 in heavy composite trading on the American Stock Exchange after the company unveiled plans for PaxNet, which will be launched next August with a mix of movies, infomercials, and network reruns. In the past month, Paxson stock has lost nearly a quarter of its value as the company has quietly scaled back its ambitions for a network once touted as a possible rival to TV's heavyweights.
"The basic concern is that the model has totally changed," said John Tinker, a media analyst at NationsBanc Montgomery Securities Inc. in New York, which earlier this month withdrew its buy recommendation on Paxson stock. "There's a lot of risk now."
Instead of simply selling its air time to a Hollywood studio or cable company -- as Paxson initially had planned -- the company Wednesday said it would buy programming and sell the ads itself. Though Paxson has spent heavily for reruns of family-oriented shows like "Touched by an Angel" and "Promised Land," which it will air in prime time, a significant chunk of Paxson's 24-hour broadcast day will still be devoted to infomercials and to a Christian programming service.
Some analysts questioned whether the new Paxson programming will be distinctive enough to attract advertisers. Company Chairman Lowell "Bud" Paxson, in response, said the company is counting on the fact that American TV viewers are fed up with some of the racier fare now seen on prime-time television. "We would like to be able to say that we have wholesome programming," Mr. Paxson told a Manhattan news conference announcing the venture. "At the end of the show, you want to feel good."
A co-founder of TV's Home Shopping Network, Mr. Paxson in recent years has built a massive TV distribution system, with stations covering about 60% of the country. He predicted PaxNet will turn a profit within four months of its launch and has told analysts it should generate as much as $150 million in cash flow during its first year on the air.
Wall Street's concern, though, is whether the current Paxson plan will be compelling enough to force viewers to watch -- and advertisers to pay up. "What's upset investors is that many of them assumed there would be a group of rich investors just paying [Mr. Paxson] money," said John S. Reidy, an analyst at Smith Barney in New York. "People felt the direction has changed dramatically."
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