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Sunday, May 26, 1991 - Page updated at 12:00 AM

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Purchase Of Fnn Boosts NBC's Cable-Market Share

AP

NEW YORK - The purchase of Financial News Network enabled NBC's Consumer News and Business Channel to more than double its potential audience and may give the new service more clout with advertisers.

But ad agency experts said they want to see if CNBC invests enough to get a bigger proportion of those potential viewers to tune in regularly before committing their clients to buying time on the network.

CNBC completed its $154.3 million purchase of FNN shortly before midnight Tuesday and promptly merged the operations, shutting down FNN, which pioneered business-news coverage on cable television nearly 10 years ago.

The next day, CNBC began shipping a refortified version of its 2-year-old business-news service along the same channels that FNN and CNBC once traveled on their own. CNBC also hired about 60 members of the FNN staff.

CNBC President Al Barber said that the new service was being carried to more than 40 million cable subscribers, up from 18 million on the old CNBC.

That would make CNBC the 16th biggest U.S. cable network, right behind Turner Broadcasting Systems Inc.'s Headline News, according to the National Cable Television Association. The largest cable network is ESPN, which has about 57 million subscribers trailed closely by Cable News Network at 56.5 million.

Barber said CNBC's larger distribution means some national advertisers who ignored it before may now consider putting their commercials on CNBC.

He said it would also get the attention of cable-system operators who previously carried neither service. Barber said virtually all systems that carried FNN are carrying the new service because CNBC is honoring FNN contracts.

With the addition of the former FNN systems, CNBC is also being seen in New York City where it had been shut out since it was launched in 1989.

Barber said that is important to CNBC because many major advertisers are represented in Manhattan and Wall Street's top analysts are more likely to make themselves available to the network if they can observe it in action.

CNBC's parent, the National Broadcasting Co., won the right to buy FNN after a fierce three-month bidding contest against a partnership of Dow Jones & Co., publisher of The Wall Street Journal, and Westinghouse Broadcasting Co.

NBC was frustrated in expanding CNBC's distribution by the reluctance of cable systems to carry two business-news services because of scarce channel capacity.

CNBC's purchase of FNN also eliminated the threat of continued direct competition from a well-financed and experienced media challenger.

But Richard Kostyra, director of media services at the ad agency J. Walter Thompson, said the larger distribution won't by itself "bring them a lot of business."

He said advertisers will will be looking for a bigger investment in programming and higher average ratings before buying commercial time.

FNN President Michael Wheeler said there were about 300 people employed by FNN as the deal was completed Tuesday night. Barber said only about 200 were interested in working for the new CNBC, which operates from Fort Lee, N.J.

Copyright (c) 1991 Seattle Times Company, All Rights Reserved.

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