The Palm Beach Post
By Scott Cendrowski, The Palm Beach Post, Fla.
Jun. 24--Shareholders in Ion Media Networks Inc. officially ushered in a new era for the television broadcaster Friday by approving the change of its name from Paxson Communications Corp.
"There is a renewed energy we have created at the company," Chief Executive Brandon Burgess said Friday at the annual shareholders meeting in West Palm Beach. The name change was announced in February, and the company has been doing business under the Ion name since.
Burgess said a refinanced debt load and new health and children's networks planned for this year have revitalized the company.
But some media watchers question whether that renewed spirit at West Palm Beach-based Ion, whose shares have traded below $1 for more than a year, is miscalculated or indicates it's a company up for sale.
Brad Adgate, senior vice president at New York-based Horizon Media Inc., which follows consumer and media trends, said Ion's partnership with Scholastic (Nasdaq: SCHL, $25.40), NBC Universal, Corus Entertainment Inc. (NYSE: CJR, $31.37) and Classic Media/Big Idea to create a 24/7 digital kids' channel in September is an uncertain venture into a saturated landscape.
He said broadcast networks wouldn't carry children's educational programming if not for a federal mandate because cable provides too much competition.
Adgate said that since 1997, when Paxson divested some of its television stations to focus on its own network, the number of TV channels has tripled. That makes the marketplace much harder to reach.
"They haven't done much as PAX," Adgate said. "They didn't bump up the ratings and didn't get too much in coverage. My reaction to this launch is that it's harder now than ever because of competition... and dollars are starting to migrate to other media."
Ion operates the "i" network --formerly PAX-TV -- and reaches 91 million households through its station, satellite and cable broadcast platforms. It owns 60 stations nationwide, including WPXP-Channel 67 in West Palm Beach.
For the quarter ended March 31, Ion lost $40 million, compared with a loss of $235 million in the same period a year ago. Shares in the company (Amex: ION, 91 cents) fell 1 cent on higher-than-average trading.
In addition to the children's network, Ion announced plans in May for a new health care and healthy living network called I-Health.
Published reports said this month that Ion could be a target of Mexico City-based media giant Grupo Televisa. On Friday, Televisa announced a bid to buy Univision Communications, the largest Spanish-speaking U.S. broadcaster, for more than $35.50 a share.
If that bid fails, Televisa would be looking to gain U.S. markets through Ion, NBC's Telemundo or McGraw-Hill, the Financial Times reported.
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