To: Phil(bullrider) who wrote (2753 ) 7/30/1999 6:40:00 PM From: Q. Read Replies (1) | Respond to
Dallas, July 30 (Bloomberg) -- Source Media Inc. Chief Executive Stephen Palley comments on his company's joint venture with Insight Communications Co., and Source Media's failed venture with TV Guide Inc. ''The economics of the transaction are significantly improved for the shareholders of Source.'' ''Will we be able to achieve distribution? Our technology has been deployed in one market so far with one (cable-television company), that's Insight. That so encouraged Insight that it wanted to buy the company. It's Source going with Insight, a member of the cable club. I think we'll have great success in reaching out to cable operators. Our initial discussions have been very encouraging.'' On TV Guide President Peter Boylan's allegations that Source Media's patents were improperly transferred from Canada: ''It's completely false. To be honest, we looked at the allegations and maybe we thought incorrectly that responding at that point would have exacerbated someone that was lashing out from pique and frustration and sour grapes.'' ''The TV guide deal is completely dead. We haven't considered (legal action against Boylan or TV Guide) yet.'' On Insight: ''The roll out by Insight (of Source Media interactive-TV technology) in Rockford, (Illinois)'' is incrementally. ''In Rockford, we have about 1,000 homes. I don't think it's useful to talk about financial details.'' ''Insight has currently 1.05 million subscribers. All of which will have over time available to them digital distribution. (Insight President and Source Media board member Michael) Willner's goal is to have 20 (percent) to 55 percent of his subscribers to be digital subs. His belief is it will be closer to 55 percent, so that's our potential.'' On joint venture with Insight versus TV Guide: ''We now own 50 percent of (the new joint venture), as opposed to 44 percent of (the TV Guide joint venture.) We have management control. Our ability to influence the direction of (the joint venture is) appreciably greater than they were in the TV guide deal.'' On TV Guide's statement that Source Media failed to negotiate in good faith: ''My response is that it is also not true. We negotiated this contract in great good faith and as hard as we could, so to suggest we didn't act in good faith is mystifying. If litigation is pursued, then all of the elements of confidentiality agreements will come out.'' ''We had discussions over some time where (TV Guide) had an indication that they weren't the only people talking to us, which preceded their earnings call.'' ''Our view . . . is there is no basis for the allegations that are reflected in this press release that (TV Guide has) entitlement to something. My answer is that anybody can sue anyone but we don't think there is any risk in a lawsuit to us.'' ''Would it be a wise thing to get into press release battle with TV Guide? I don't know. Do we have to file a lawsuit? Maybe. But we don't have to get into that today.'' ''There is no breakup fee'' for the TV Guide joint venture. ''The reason the TV guide deal didn't happen . . was that we got a significantly better economic arrangement. The cable community in the U.S. has become an ever smaller club. We have one of the members of that club. He has the capacity to open doors at levels that we at Source can't do and with limited exceptions no distributor could do.'' On achieving profitability: ''It's going to be a while.''
