Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, March 7, 1992 TAG: 9203100384
SECTION: EXTRA PAGE: E-1 EDITION: METRO
SOURCE: JOSEPH COCCARO
DATELINE: LENGTH: Long
If you subscribe to cable TV in the Roanoke Valley and much of Western Virginia, you can tune in any day.
It's called The Family Channel. And it's owned by Pat Robertson, the one-time presidential hopeful best known for his worldwide television ministry and Bible-thumping politics.
Robertson founded the channel in 1977. It was the first 24-hour basic-cable network in the country and was offered free to cable systems such as Cox and Tele-Communications Inc., which now pay to carry it.
Once a network of old Western reruns and religious programs, The Family Channel now is a sta- ple in the cable television industry mainstream. It ranks among the nation's top 10 basic cable networks in nearly every business category and is regarded as a G-rated programming innovator.
For Robertson, The Family Channel has been a high-revving financial piston in an expanding religious and communications empire, based on a 145-acre site in Virginia Beach.
In a closely knit deal forged two years ago, CBN sold The Family Channel to Robertson and his son, Timothy B. Robertson, now president of the cable programming company. The father and son now run the channel as an independent business, although links to CBN and other Robertson-controlled organizations are still close.
The Family Channel is a powerful religious vehicle for Robertson and his non-profit CBN, now a production company. The network is carried by about 9,500 cable systems and can reach 55 million households. ESPN, the nation's largest basic cable network, reaches only 4 million more.
There is an added - and important - dimension for Pat Robertson: "The 700 Club," which CBN produces and of which Robertson is host, gets prime placement in The Family Channel's program lineup. The hour-long show airs at 10 a.m. and is repeated at 10 p.m. and 2 a.m.
According to the National Religious Broadcasters, a New Jersey-based trade organization, "The 700 Club" is among the 10 most-watched religious programs in the country.
During November 1991, 8.2 million households tuned in to "The 700 Club," CBN spokeswoman Susan Norman said.
For Robertson, such numbers are crucial: Gifts and contributions to his CBN ministry flow through "The 700 Club."
Donations accounted for about $75 million, or nearly three-quarters of CBN's $106 million in revenues for the 12 months ending March 31, 1991. Those donations were up from about $60 million for the equivalent period ending in March 1988.
If the financial picture for "The 700 Club" seems bright, it may soon pale in comparison to the windfall the Robertsons could earn from The Family Channel.
The Family Channel filed plans with federal regulators this week to sell 10 million shares in the network, a move that could create a potential gain of more than $50 million for the father and son and the company.
The stock will be offered at about $15 a share but could fetch much more if it's enthusiastically received by investors, stock analysts say.
It will be listed on the New York Stock Exchange under the symbol FAM and could be trading by mid-April.
The stock offering will enable The Family Channel to significantly reduce its debt to CBN. In all, about $150 million will be raised. Of that, about $100 million would go to CBN and the rest to The Family Channel and the Robertsons.
The Family Channel issued a brief statement saying some of the proceeds will be used to produce shows for the network and for potential acquisitions of other companies.
Basic cable networks have been the only medium posting increasing advertising revenues during the recession. Moreover, basic cable is expected to get bigger as more television watchers look for alternatives to the four commercial broadcast networks - ABC, NBC, CBS and Fox.
Cable operators have reason to be optimistic: Investors are responding.
Last fall, Washington-based Black Entertainment Television network - BET - sold 1.5 million shares, raising about $25 million. The network hoped to get $17 a share on the first day of trading, but eager investors pounced on the stock and paid more than $23 a share.
The Family Channel reaches about 20 million more households than BET and has more than three times the advertising revenues. That gives the Robertsons the potential to raise a lot more money, should they take their channel public.
"There is a lot of interest in cable programming entities," said Eleanor Wild Morris of the California-based media research firm Paul Kagan Associates Inc. "Two years ago nobody was doing [initial public offerings], but now things are opening up out there."
Before The Family Channel was spun off from CBN, it was posting revenues of more than $100 million and was providing about half of all the money taken in by CBN. Federal tax rules say that commercial operations can provide only "insubstantial" revenues to non-profit organizations. So CBN sold the channel to the Robertsons to comply with that provision.
The cable channel's success has contributed to the popularity of "The 700 Club" and Robertson's conservative political agenda. The network is not the only reason for the program's popularity: "The 700 Club" also is carried by more than 200 independent television stations nationwide. Still, The Family Channel's effect on "The 700 Club" - and Pat Robertson's ministry - cannot be underestimated.
"There is no question the growth of the cable network has impacted CBN," Pat Robertson said in a statement issued through Norman, the CBN spokeswoman.
Stewart Schley, editor of the trade publication Cable-Avails, said: "Their distribution is excellent. They're in about as many households as any of the other" basic cable networks.
Unlike other religious programs that pay to be on The Family Channel, "The 700 Club" is guaranteed air time and pays only transmission costs. That arrangement was a condition of the sale. The Family Channel also leases space in a CBN-owned building.
The intertwined relationship among CBN, Robertson and The Family Channel initially made it difficult for The Family Channel to shake its image as a tool for furthering a religious agenda.
And while some of that image lasts, over the past two to three years it has begun to change. The separation from CBN gave The Family Channel more credibility within the industry and also gave its officials the freedom to be more commercially innovative, industry insiders say.
Last month, the channel rocked the cable industry with its airing of the miniseries "Roots." It drew more than 2 million viewers each night of the series, giving the channel the highest basic cable ratings for the week.
The son runs the show
Timothy Robertson, the 37-year-old chief executive of The Family Channel, runs the network's day-to-day operations. The company has about 160 employees and field offices around the county.
Pat Robertson, 61, is chairman, but is said to be mostly a figurehead in day-to-day operations. He is rarely seen at The Family Channel headquarters, concentrating instead on his job as host of "The 700 Club" and on other CBN operations.
Despite his hands-off approach, Pat Robertson has left a distinct imprint on the channel. The network avoids programming it deems offensive and refuses to accept advertising for alcohol or ads that are sexually explicit.
The Family Channel's programming philosophy is very much in sync with Pat Robertson's preachings. The network is down on explicit sex, violence and crudity. Instead, it airs and produces cuddly programs laced with messages of morality.
That kind of entertainment has struck a chord in the American public. A Gallup Poll commissioned last year by the Robertsons' channel showed that 58 percent of those surveyed are offended frequently or occasionally by television.
"Clean" family entertainment had been sorely lacking until a few years ago, which is why The Family Channel is having such a great success, industry analysts say.
Nearly every major network has some "family entertainment." But most have a mix of shows and few accept only G-rated advertising. That, say industry analysts, is what makes The Family Channel different.
Paul Krimsier, vice president of programming, has had a lot to do with the channel's direction. He was brought in by the Robertsons about four years ago to help develop a menu of wholesome entertainment.
"We look for shows that stand up for character, that tell you what is right," Krimsier said. "We want shows that three generations of a family can watch and not get uncomfortable."
Cowboys ride again
The network has budgeted $125 million to co-produce several original shows. That's more than any other basic cable network in the country.
The network has also scored big with advertisers and viewers by continuing with its longtime lineup of popular Westerns and adding once-blockbuster shows like "The Waltons."
Advertisers have responded. Last year, companies like Procter & Gamble, American Telephone & Telegraph, General Motors and American Express spent $103.5 million with The Family Channel. That's more than was spent with either Nickelodeon/Nick at Nite, The Arts & Entertainment Network or The Discovery Channel, industry figures show.
by CNB