Z Channel Sold to Small Seattle Cable Company : Santa Monica Concern’s 5th Owner Plans to Keep Quirky Programming Mix

Z Channel, the eclectic local pay-TV programming service that has waged a money-losing battle with more conventional giants such as HBO and Movie Channel, has been sold for an undisclosed amount to a small Seattle-area cable company that vowed Z’s quirky style of programming will continue, company officials said Tuesday.

“We’re obviously very excited about it and feel that it will be an exciting opportunity for us,” said Gordon Rock, president of Rock Associates, purchaser of the 13-year-old cable programming service based in Santa Monica.

The sale, which closed last Thursday, marks the fifth time that Z Channel has changed hands since it was founded in 1974 by Theta Cable.

Z’s last owner was Group W Cable, which put Z on the block in December as part of the corporate liquidation that followed the 1985 sale of Group W to a consortium of five cable operators.

The price Rock Associates paid for Z Channel was not revealed, but Pay TV Newsletter, published by the Carmel consulting firm of Paul Kagan Associates, estimated it to be about $5 million.

No Plans to Change

Z is known for a curious mix of art films, foreign films and current releases that Programming Director Jerry Harvey has described as “the Museum of Modern Art with sense of humor.”

In 1982, for example, Z was the first cable service to offer the original uncut version of “Heaven’s Gate,” Michael Cimino’s financially disastrous Western. Early this year, Z premiered the reconstructed version of the film “Isadora,” and in 1984 it first showed the entire 5 1/2-hour version of Ingmar Bergman’s “Fanny and Alexander.”

“It’s a good little service,” said Steve Rosenberg, a senior analyst with Paul Kagan Associates.

Rock said his firm has no plans to change Z’s unusual programming. What’s more, Rock said he intends to promote Z more heavily and hopes to expand it to serve more of the Los Angeles Basin.

“We look forward to building an organization around Jerry Harvey and the fine programming that he has established to date,” Rock said. Robert Allison, a partner in Rock Associates, which is based in the Seattle suburb of Kirkland, has been named president of Z Channel, he added.

Indeed, Harvey, 37, who has been with Z Channel since 1980, is considered possibly its chief asset.

“This will be the first time we won’t be owned by a competing cable company,” Harvey said. “I really am happy that they (Rock Associates) got it.”

Rock Associates was one of several bidders for Z Channel, which has between 80,000 and 85,000 Los Angeles-area subscribers, ranging from parts of the San Fernando Valley to Newport Beach to Ontario. Z’s subscriber level peaked in the early 1980s at a little more than 100,000.

Despite a loyal core of subscribers, Z has a history of being unprofitable because of high programing costs, its relatively low number of subscribers and a traditionally low penetration by pay television stations in Los Angeles, where over-the-air free broadcast signals are strong in most areas, Rosenberg said.

Z Channel lost nearly $2 million last year, according to Pay TV Newsletter.

Rock Associates operates cable systems in rural areas primarily in the West. The combined systems have about 65,000 subscribers, Rock said.