Fox Kids Faces Holy Challenge With IFE Deal

Cartoons and religion have been staples of Sunday morning television for years. But analysts and industry executives are skeptical about their pairing on the Family Channel envisioned by Fox Kids Worldwide, which this week announced its $1.9-billion purchase of the cable network’s parent, International Family Entertainment.

Fox Kids, a 50-50 partnership between News Corp. and Saban Entertainment, bought the channel as an outlet for its children’s programming, as cable channels have eroded the ratings of its daily afternoon children’s block on the Fox broadcast network.

But as part of the transaction, the new owner has agreed to air during the morning and late at night for the next five years the “700 Club,” a religious show hosted by TV evangelist Pat Robertson. In exchange, Robertson, who is staying on as co-chairman, has agreed to give up control of his company to Fox.

Programmers wonder how the two formats can coexist. Many question how Fox will be able to build a powerhouse brand to rival the mighty Nickelodeon and up-and-coming Cartoon Network when the Family Channel is known mainly for its religious fare.

“Power Rangers and the 700 Club are strange bedfellows,” said an executive at a rival children’s programmer. “The Mighty Morphin Power Rangers” is the rough-neck action adventure show that has fueled the success of the Fox Kids’ block on network TV.

Mel Woods, president and chief operating officer of Fox Kids, said few decisions have been made about how the network will be programmed once the transaction closes. “Beyond kids, we really don’t know what changes will be made,” he said, adding that the “700 Club” would continue airing for 1 1/2 hours a day, with segments at 10 a.m. and 10 p.m., with the late-night slot moving out of prime-time as earlier announced, to 11 p.m. by fall.

There are reasons beyond contractual requirements why Fox might want to continue airing the “700 Club.” The Family Channel is carried on cable systems reaching 69 million homes in part to satisfy a Christian constituency that would protest vigorously if it were dropped. Thus the show helps assure Fox continues to be carried by operators.

“It’s a practical relationship that will last a long time,” said Peter Barton, former president of Liberty Media, which owns a small slice of IFE.

Many industry executives expect Fox to discontinue the network run of children’s programming once the Family Channel completes its transition in the fall of 1998. Some Fox affiliates complain that it is difficult to promote other shows in their schedule during the kid’s block and would rather use that time for news.

Fox sources say about half of its 22 owned stations already run news programs in the time period because they generate more money.

But Woods says there is no plan to discontinue the network children’s block despite its ratings slide.

Fox sources say the broadcast and cable segments, in fact, will be used for cross-promotions and that they will be distinct in flavor. While the broadcast segment will continue to emphasize action shows popular with boys such as “X-Men” and “Power Rangers,” the Family Channel might opt for more wholesome programming.

To make the transition to the “700 Club,” sources say the network will look for programming with themes about values. While the network programming is edgy, the Family Channel will strive for upbeat shows, drawing on the library of International Family Entertainment’s MTM production arm.

Sources say many of the television hits in MTM’s library are now licensed to Viacom Inc.’s networks, including Nick at Nite and TV Land in deals that will expire over the next two to three years. They say Fox is likely to keep those shows, including “The Bob Newhart Show” “Mary Tyler Moore Show” and “Rhoda” for the Family Channel’s prime-time block rather than licensing them out.

For Fox, the Family Channel is a weapon for remaining viable in the hotly competitive children’s market. While Fox is the dominant broadcaster in the children’s business, it has lost viewers to the WB Network, to Viacom’s Nickelodeon and to Time Warner’s Cartoon Network.

Fox feared it would no longer be able to keep kids loyal to its channel with cable alternatives.

Advertising revenues from children’s programming on the broadcast networks dropped 16% last year over 1995, to $84 million. NBC has already bowed out of the children’s business, with CBS and UPN expected to follow next year.

While children’s programming is one of the fastest-growing categories in cable, the intense competition is beginning to erode profits. Sources say Nickelodeon locked advertisers into a two-year package this year anticipating that the new inventory sold next year by Family Channel could drive down advertising rates.

And as competition stiffens and profits decline, some producers wonder where the Family Channel will get the hits it needs to draw viewers. Fox’s own slate is struggling with aging hits. Even Nickelodeon has been unsuccessful finding blockbusters like its early “Ren and Stimpy.”