NBC hikes the ante to buy FNN.

NBC hikes the ante to buy FNN 

Consumer News and Business Channel President Al Barber said he spent time last week visiting worried employees at Financial News Network in Los Angeles and "talking to them about opportunities with CNBC."

On Feb. 26 CNBC, a business news cable channel owned by NBC, announced it had signed a "definitive agreement" to purchase its financially ailing competitor, FNN, for $105 million.

The deal canceled an earlier "agreement in principle" reached between FNN and a joint venture group of Westinghouse Broadcasting and Dow Jones & Co. to purchase the business cable network's operations for a price estimated at $90 million. But Dow Jones vowed last week to "pursue vigorously" an FNN purchase, despite the CNBC deal.

Because FNN has announced its intention to file for Chapter 11 bankruptcy protection from creditors, approval of any sale will rest with a federal court judge and the Dow Jones group could offer another bid in the courtroom.

"It's binding," FNN spokeswoman Amber Gordon said of the CNBC deal. "It's not carved in stone because of the bankruptcy."

Barber, who attended an Advertising Club of Los Angeles Cable Day event in Beverly Hills the day after the CNBC/FNN deal was announced, said CNBC is "going to bankruptcy court with FNN to buy their assets."

The $105 million deal includes FNN's name, logo, advertising agreements and staff.

He said CNBC's owner, General Electric Co. subsidiary NBC, will "integrate the two systems (into one channel) to give viewers the best of the two systems."

Joe Rutledge, CNBC vice president for corporate communications, said that "where there were two services, there will be one."

He also said it was too early to project staffing levels at the new integrated channel. FNN has about 345 employees, many of whom work at Los Angeles production facilities.

If the CNBC purchase goes through, Barber will head the new integrated channel, which he projected to work with advertising agencies on special consumer oriented reports about business. And he said the new FNN/CNBC may feature local business reports, sponsored by local advertisers.

"We can, and we should, reasonably cater to you," Barber told the advertising executives.

Meanwhile, Donald Mitzner, president of Group W Satellite Communications -- the Westinghouse division involved in the FNN bidding war -- was quoted as saying that Group W may launch a competing business cable station if the CNBC/FNN purchase is successful.

"This is far from over," said Mitzner.

Peter Skinner, Dow Jones senior vice president, wrote a letter to the FNN board saying: "We object in the strongest possible terms that our request to meet with you ... to review this matter was denied."

FNN reaches more than 35 million homes in the United States and Canada. CNBC reaches 18 million homes.

FNN has liabilities estimated at $145 million. It has announced that it will sell its 51 percent stake in the Learning Channel to the Discovery Channel for $12.75 million.

FNN, which is 47 percent-owned by Infotechnology Inc., moved its headquarters from Los Angeles to New York last fall, at which time an interim management team was established to restructure the two companies and Infotech put all its properties up for sale. Infotech also owns 97 percent of United Press International.