A New York Post article yesterday speculated that Kohlberg Kravis Roberts, majority owners of Channel One’s parent company Primedia, may take Primedia private and auction off pieces of the company.
Primedia (PRM) was once at $34 a share and is now struggling to remain above $2. Primedia has over $2 billion of debt and many think they cannot service that debt in this present recession.
Speculation has centered on some magazines being sold along with Bacon’s information service, but nobody has good information about the future of Channel One.
Few companies would want to buy a company that is such a lightning rod for controversy. If it was sold, it would be at a "fire sale" price. The company’s management is one of its chief liabilities. Jim Ritts, the current president, is a marketing man that has shown little sensitivity to the special needs of the children forced to watch his program. Jeff Ballabon, Morgan Wandell and some of the surviving executives would probably be immediately dismissed if another company purchased Channel One.
Any company interested in Channel One would have to have millions of dollars available to replace the aging inventory of TV sets that Channel One has in classrooms. They would also have to work hard to convince advertisers to come back to the show. They would face opposition in about every state where Channel One has contracts.
From our view, it looks like Primedia is stuck with Channel One. It appears to be an unmarketable entity. That is ironic since Channel One is chiefly a marketing company.
The best advice we can give Tom Rogers, CEO of Primedia, is to donate all equipment to the schools and take a tax write-off. Put an end to this company that has caused so much trouble in our country.
