Ontario’s KIHS to Be Sold to TV Shopping Network

Home Shopping Network, which sells marked-down goods around the clock on fast-paced cable-TV shows, said Tuesday that it has agreed to pay $35 million for KIHS-Channel 46, an Ontario UHF station.

This is the merchandising company’s ninth agreement to purchase a UHF station and marks “our first step into regular broadcasting in the Los Angeles area,” said Judy Ludin, a spokeswoman for Home Shopping Network at its Clearwater, Fla., headquarters.

KIHS, which would be one of Home Shopping Network’s biggest UHF purchases, had “very complicated early days of ownership,” according to Ray L. Beindorf, president and general manager.

It first went on the air as a Spanish-language station for six months in the mid-1970s. In April, 1984, under its current licensee, HBI Acquisition Corp., the station started broadcasting family, Catholic and other religious programming. Last March, it started offering more commercial programming in addition to religious programming.

Joint Venture

HBI Acquisition is a joint venture of DeRance Inc., a Catholic foundation based in Milwaukee, which owns 60%, and Santa Fe Communications, a closely allied philanthropic organization that owns 40%.

The sale of KIHS apparently marks the end of DeRance’s efforts to start a conservative Catholic television network in the United States.

Beindorf took over the station’s management after the ouster of Harry G. John. According to a story in the National Catholic Reporter of Sept. 19, a Milwaukee judge ruled two years ago that John, an heir of the Miller Brewing fortune, had “grossly mismanaged” DeRance by spending millions on the network effort.

KIHS, which broadcasts about 18 hours daily, serves 4.4 million homes in the area and is one of only two stations in Los Angeles to have atop Mt. Wilson a “circular polarized antenna,” a transmission system that is designed to offer a clearer signal.

Home Shopping Network pioneered its approach nationally on cable in July, 1985. Its programming is seen on cable stations in several Southern California communities, including Chatsworth, Costa Mesa, Garden Grove, Long Beach, Torrance and Van Nuys. Since Aug. 4, it has announced eight other agreements to buy UHF stations around the country.

The UHF purchases, all of which are subject to approval by the Federal Communications Commission, would mark the company’s entry into so-called free TV and would enormously expand its potential audience.

Tracy Westen, an assistant professor of communications at USC and an attorney specializing in broadcast law, views this trend with some alarm.

“Traditionally, broadcasting is essentially programming supported by a smaller amount of commercials,” he said. “This completely reverses that. . . . In my view, this is yet another giant step (toward) seeing commercials on the air justified by a little amount of (community-service) programming.”

Ludin, the Home Shopping Network spokeswoman, said FCC guidelines require Home Shopping Network to intersperse some community-oriented programming with its shopping shows. “We will have shopping interspersed with some local-type programming,” Ludin said.

Investors have gone wild over cable-merchandising companies since Home Shopping Network’s initial public stock offering in May. On its first day of trading, the company’s stock quickly soared above its offering price of $18 a share, closing at more than $42. The stock has risen steadily, and the company had a three-for-one stock split on Sept. 5.

In trading Tuesday on the American Stock Exchange, shares of Home Shopping Network rose $1.75 to $35.25. With 285,200 shares trading hands, the stock was the exchange’s third most active issue.

Last week, Fox Television Stations and Lorimar-Telepictures jumped aboard the TV merchandising bandwagon, announcing a joint venture called ValueTelevision to compete with Home Shopping Network and a Financial News Network’s TelShop.

And in June, Warner Communications said it would join with COMB, an off-price merchandiser, and Denver-based Tele-Communications, the nation’s largest cable network firm, in a home merchandising venture.