Wedding Bells : THE BIZ : Joined Firms May Push to Marry Video Ventures Too

With SBC Communications Inc. planning to acquire Pacific Telesis Group, look for the two companies to push for the merger of the ballyhooed Baby Bell video ventures that each is involved in as a partner.

That’s the consensus among senior people involved with the ventures--Tele-TV, with PacTel as an investor, and Americast, with SBC as a partner--as well as entertainment executives who have worked with the projects.

They are convinced that having two separate efforts working to provide an array of entertainment and interactive services to homes no longer makes sense, if it ever did.

Indeed, sources said, informal talks have already taken place among some senior Baby Bell executives about the possibility of combining Tele-TV with Americast, either through an alliance or an outright merger.

Both projects face a daunting task of trying to gain a foothold in a business dominated by an entrenched cable TV industry, and simultaneously threatened by the successful inroads being made by the DirectTv satellite system.

“When you look at the marketplace, it’s just a matter of time before these two ventures get together,” said one Hollywood executive involved heavily in one of the ventures.

Tele-TV was launched ambitiously in 1994 under the guidance of former Creative Artists Agency Chairman Michael Ovitz, who severed his ties to it when he left CAA last year to join Walt Disney Co. as president.

The company hired former CBS Broadcast Group President Howard Stringer and former Fox Entertainment Group President Sandy Grushow to lead it. PacTel is a partner in Tele-TV with New York-based Nynex Corp. and Philadelphia-based Bell Atlantic Corp., two companies that are reported to have said separately that they have held merger talks themselves.

Americast has as partners three Baby Bells--SBC, BellSouth Corp. and Ameritech Corp.--along with telecommunications giant GTE Corp. Also involved is Disney, which is offering its advice on programming matters. Heading the company is former Capital Cities/ABC Inc. executive Stephen Weiswasser.

Granted, the future of two video ventures that have yet to offer services to customers wasn’t exactly prominent on the radar screen for either PacTel or SBC on the the day the two announced a $16.7-billion deal.

In a conference call with reporters, SBC Chief Executive Edward Whitacre Jr. said that it’s too early to discuss what will happen to Pacific Bell’s Tele-TV stake. PacTel Chief Executive Phil Quigley chimed in that “we have not had substantive discussions” about the project’s future.

“This just isn’t the biggest issue. It certainly is for the people who work there, but it’s not the biggest issue of the entire transaction,” Quigley said.

Nonetheless, both Tele-TV and Americast are high-profile projects in an area that has been called important to the industry’s growth in the next century. Both Quigley and Whitacre said the combined company will offer video services in some form. And Quigley hinted of some kind of combination to come when he reiterated that both Tele-TV and Americast have previously said they would like to cooperate with each other on various matters.

Of the two operations, Tele-TV is on a faster track, close to debuting in the next few months on TV shows and movies via microwave systems. Indeed, in an announcement overshadowed by the bigger news, Tele-TV announced on Monday that it has struck a five-year deal with the Los Angeles Dodgers to transmit 42 home games per season over its system starting next year.

The microwave system for Tele-TV is considered a steppingstone toward a more sophisticated system what would offer through wires interactive TV and such services as full video on demand, allowing viewers at home to call up an extensive list of movies to watch. There were no indications on Monday that Tele-TV’s plans will change because of the PacTel-SBC deal.

One caveat to a merger of Tele-TV and SBC is getting the Baby Bells involved to agree to terms and the technological approach.

Executives note that it is often difficult to get Baby Bells--known for having extensive corporate bureaucracies--to agree on anything.

Fast Forward at Blockbuster: Why would William Fields, whom many considered to be the heir apparent at retail giant Wal-Mart, leave the company after 25 years to head video rental chain Blockbuster Entertainment for Viacom Inc.?

“My kids never take their videos back on time, so I’m trying to get a break on the late fees,” joked Fields, who was a Wal-Mart executive vice president and head of the company’s stores unit.

Actually, Fields, who on Monday made his first comments on his decision, said he was recruited for the job and that he took it largely because of the opportunity to build the company internationally.

Industry sources said Fields had been highly recommended by Wall Street to Viacom, which was looking for a top retail executive to run the chain after former Chief Executive Steve Berrard decided to leave the company to join former Blockbuster Chairman H. Wayne Huizenga in a new used-car venture. They add that Viacom Chairman Sumner Redstone no doubt made it worth Fields’ while financially.

Fields is no stranger to Hollywood. He was heavily involved in building Wal-Mart into the biggest single seller of videos directly to consumers, and also was instrumental in starting Wal-Mart’s fledging video rental business that has been expanding in its stores.

Fields won’t speculate on his plans for the company, noting that on his first day on the job, he’s barely had time to locate the bathrooms in the company’s Fort Lauderdale, Fla., headquarters.