HBO Execs Suspended in Inquiry

The president of Home Box Office International and five other executives from Time Warner Inc.’s pay television service have been suspended, pending an internal investigation into alleged self-dealing, according to people familiar with the probe.

In late September, these sources said, HBO lawyers and accountants conducted a surprise weekend audit of computer files at the Miami headquarters of Warner Channel Latin America, prompting the suspension the following Monday of Steven Rosenberg, president of HBO International, and Alejandra Sollet, director of the channel.

Rosenberg and Sollet, said to have been romantically involved for several years, helped to set up a firm called Advertising Services Group to sell advertising in Mexico, Venezuela, Argentina and Colombia for networks including Warner Channel Latin America and steered business to the Venezuela-based company, the sources said.

HBO investigators are trying to determine whether either Rosenberg or Sollet have a stake in the ad firm, the sources said. The probe is expected to be concluded within a week.

Neither Sollet nor Rosenberg returned calls seeking comment.

Rosenberg, a 14-year veteran of HBO International, promoted Sollet to head the Latin American channel in 2001.

Early this year, the sources said, he terminated a contract with Sony Pictures Television International, which had handled ad sales for the channel. Rosenberg then allegedly shifted the business to Advertising Services Group. Sony declined to comment.

Sollet and Rosenberg are no longer involved with Warner Channel Latin America, HBO executives said. Ad sales in Venezuela and Mexico now are being handled by HBO, the executives said.

As president of HBO International, Rosenberg oversees more than a dozen pay-TV joint ventures, including channels in Asia, Eastern Europe and South America. These channels show programming from HBO and other Time Warner units.

As the pay-TV business in the U.S. has matured, the international market has become a key source of growth for the nation’s entertainment giants. But regions such as Eastern Europe and Latin America have been slow to make money because of their nascent ad industries.

Warner Channel Latin America generates about $20 million in sales and about $7 million in earnings for HBO, company sources said. HBO International contributes annually $25 million to HBO’s estimated $1 billion in earnings, the sources said.