Nostalgia Is the Prize in Holy War

On an information highway full of sleek driving machines, the Nostalgia Network looks at first sight like a real clunker.

It’s got one-fourth the reach of competitors such as ESPN and CNN, and a programming lineup dominated by a relic named “Ben Casey.” But with a premium being placed on highway access these days, the Nostalgia Network has become the hotly contested prize in a holy war.

Companies linked to the Rev. Pat Robertson and the Rev. Sun Myung Moon are competing for control of L.A.-based Nostalgia as part of a plan to expand their communications empires. Robertson’s International Family Entertainment fired the latest shot this week when it indefinitely extended the deadline for Nostalgia to respond to a $40-million buyout offer.

Concept Communications, which has ties to Moon’s controversial Unification Church, is already Nostalgia’s largest shareholder. Over the last several months, Concept has been mired in a bitter court battle for control of the company with Chairman Michael Marcovsky.

MOR Music Television, a start-up cable company, has also bid for the network. As part of the deal, each of the three companies has offered $2 million cash to help fund Nostalgia’s troubled operations. Assisting Nostalgia in sorting through its options is Allen & Co., the investment banking firm that is advising QVC Network Inc. Chief Executive Barry Diller in his bid for Paramount Communications Inc.

That’s not bad company for a network with a long trail of red ink, including a $3.2-million loss in 1992. All the attention has caused Nostalgia’s modest over-the-counter stock to nearly double in price, to $1.75 a share, since August. It has also put an unaccustomed spotlight on the network, which reaches only 14 million homes with a grab bag of programs that includes big band concerts and a talk show with sex specialist Dr. Ruth Westheimer.

Marcovsky defends Nostalgia as “the flip side of MTV.” But analysts say it has also gained value as people have begun jockeying for limited cable positions.

“The channel is on the cusp,” said one source. “There’s not enough subscribers to get much advertising yet, but today you can’t easily start a new channel. It’s impossible to get subscribers. It also appeals to an interesting demographic group of people over 45.”

Nostalgia’s board is expected to take up the rival offers Monday, when it hears from an independent committee that is charged with evaluating the bids. But few people expect a quick solution. One reason for the deadlock: Marcovsky and Concept each control five board seats.

The two sides started feuding last fall, according to published accounts, when Marcovsky pledged his shares in the network as collateral to pay off reorganization debt. Concept said it had first rights to Marcovsky’s stock--which would give it control of the company. But Marcovsky challenged that. The corporate governance issues are still before a Delaware court.

Also unresolved is a Nostalgia suit accusing Moon’s Unification Church of an “illicit and unlawful” scheme to seize network control. The Los Angeles federal court case accuses the church of trying to use Nostalgia to spread the “Moon cult” message.

Concept denies the allegations and says it is still committed to winning control of Nostalgia. “Concept wants to run it as the Nostalgia Network,” said a spokeswoman.

Marcovsky, for his part, says he’s only interested in protecting shareholder value.

IFE entered the fray earlier this month with a buyout offer of $1.50 a share in cash, plus 50 cents worth of IFE common stock. The deal is designed to help IFE, which is 22%-controlled by the family of televangelist Robertson, build its entertainment holdings. IFE is supported by Tiger Communications, a 27% Nostalgia shareholder.

IFE already owns the Family Channel, and in January it added MTM Entertainment. The $86-million deal gave IFE control of a rich TV library that includes “The Mary Tyler Moore Show,” “Evening Shade” and “Hill Street Blues.”

George Vandeman, an attorney for IFE, says the company sees Nostalgia as a perfect fit.

“It has very similar demographics to the Family Channel, with its 45-year-old-plus audience and its family-oriented, wholesome sort of entertainment,” Vandeman said, adding that the Family Channel “also has the additional programming--from the MTM library--to program the network. So it’s just a very, very natural extension for the Family Channel to make.”

Vandeman says IFE is in it for the long haul--which may be longer than anyone would like. Says one impartial participant: “What you essentially have is an ongoing feud between two major shareholders. There’s no way to break the deadlock. They can’t agree on anything.”

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Buddy System: Hollywood is not always a cold-hearted place. Star director Sydney Pollack (“The Firm”), who surely has a lot of demands on his time, showed up Wednesday for a press screening of HBO’s “Against the Wall” as a gesture to director John Frankenheimer, a friend.

“Against the Wall” doesn’t air till March, but the taut drama about the 1971 Attica prison uprising is already being praised as a return to form for Frankenheimer, whose past credits include “The Manchurian Candidate” and “The Birdman of Alcatraz.”