Paxson Venture with Guthy-Renker Appears Stalled

It appears that the programming joint venture between Guthy-Renker Corp., the DRTV marketing company in Palm Desert, CA, and Paxson Communications Corp., the TV station group owner in West Palm Beach, FL, has stalled in the discussion stage.

The two companies formed the venture in December amid heavy publicity about cooperating on the development of original programs that would combine entertainment and direct selling.

“Neither of us have really prioritized it,” said Brian Kelly, president of Guthy-Renker Distribution. “It's kind of on the back burner for both of us. We've kind of stagnated in the last few weeks or so.”

He said his company had presented Paxson, which is planning to launch a new national network on Aug. 31 dubbed Pax Net, with several treatments for transactional shows that would air in morning and early afternoon dayparts. None of the shows received a green light yet.

Despite Paxson's inaction, Kelly does not sense the joint venture is doomed to the dustbin.

“I don't sense it's falling apart, but we've got to figure out what we want to do,” Kelly said. “It's seemingly becoming a lower priority for both of us. It's just a general down time.

We'll have to see what happens.”

Although Kelly said in a March interview with DRTV News that he wanted to get approval on the programs to ensure his company would be able to deliver them by the August launch date, this month he said he was confident that his company can deliver them on short notice.

“It's stuff that's pretty turnkey for us,” he said. “If they [Paxson] want to do it, it's pretty simple for us to move forward with it. Timing isn't an issue.”

Meanwhile, Paxson is moving forward with other plans to fill out the network's weekly schedule. It announced April 2 that it had signed an agreement with DIC Entertainment, a subsidiary of the Walt Disney Co., to provide children's programming for the weekend morning schedule. That agreement followed previous announcements that it would fill its primetime schedule with repeats of family-oriented network programming.

The company is also swirling with rumors that its founder and CEO, Lowell “Bud” Paxson, is ready to sell the company that he built into the largest group of television stations. The company did not return phone calls for comment.

Bud Paxson drew criticism for paying himself and his top executives a bonus payment totaling $7.2 million for a year when its stock price plummeted with the launch announcement of Pax Net. The fat bonus drew protests from Wall Streeters and media pundits, who questioned Paxson's judgment.

As for Guthy-Renker, Kelly said the company is more focused on other projects, including plans to launch a discount buyers' club and more telecommunications ventures.

“We're evaluating whether to start from scratch or partner with somebody,” Kelly said of the buyers' club.

The company has a joint venture with telephone company Long Distance Direct Inc., Pearl River, NY, to market business opportunity programs. The company last year launched an infomercial campaign touting business opportunity of selling discount long-distance service. The campaign drew 25,000 new subscribers to the service, which was somewhat disappointing.

“That joint venture is still in existence,” Kelly said. “We generated 25,000 customers for them, which was good, but not huge.”

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