Newspaper article THE JOURNAL RECORD

TBS Moves Up in the Cable Spectrum

Newspaper article THE JOURNAL RECORD

TBS Moves Up in the Cable Spectrum

Article excerpt

ATLANTA -- Time Warner's TBS Superstation will convert to a basic cable network Dec. 31, a move that should boost cash flow by as much as $100 million in the next five years.

The switch from local superstation will allow TBS, the most- watched station on cable, to start charging cable operators for the right to carry the network. TBS was one of the original superstations, or local stations that were distributed on cable, along with Chicago's WGN and New York's WOR.

The move has been expected for months as Time Warner seeks to wring more cash from its businesses. Time Warner got WTBS as part of its $7 billion acquisition of Turner Broadcasting Systems last year.

"You make your money in two ways: advertising and subscriber fees. They were being carried for free," said Art Rockwell, an analyst at Yaeger Capital Markets in Los Angeles. "This is a big plus for them."

Terence McGuirk, chairman, president and chief executive of TBS, confirmed analyst projections that the move could result in $100 million a year in cash flow, or earnings before interest, taxes, depreciation and amortization, within five years.

"It will be profitable for TBS to be in a dual-revenue stream mode," he said.

The change won't greatly affect its programming cornerstone: the Atlanta Braves baseball team. TBS will televise 90 games a year, down from about 125 now.

The Atlanta-based station, which Ted Turner put on cable and turned into a national brand, is best known for sports telecasts and reruns of old hits like The Brady Bunch and the Andy Griffith Show.

As long as it was designated a local superstation, TBS couldn't collect fees from cable subscribers, even though it's watched by 70 million people. The local WTBS station in Atlanta will continue to show much of the same programming as its cable counterpart.

To make the switch, TBS had to buy national rights to the shows it broadcasts. …

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