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McEnroe Colleagues Stunned

Until she adopted two babies a few years ago, American Movie Classics was like Kate McEnroe's child, according to numerous industry sources.

McEnroe spent nearly 23 years at Rainbow Media Holdings Inc., with most of that tenure at AMC. She poured her heart and soul into building that service into a brand, said those who know her.

"She killed herself for that channel," said Jedd Palmer, an ex-MSO programming official who is now consulting. "She put every single ounce of emotional, physical, mental energy she had into that channel."

News of her firing last week — along with the general managers of both AMC and WE: Women's Entertainment — sent waves of surprise and disbelief through the cable industry, one industry that's had its share of financial scandal of late, ever since the Rigas family got hauled away in handcuffs in the Adelphia Communications Corp. fraud case.

Like a death

"That was the most shocking news I've ever heard," one industry veteran said of last week's events. "Katie McEnroe getting fired from AMC is like a presidential assassination."

Debra Green, chief operating officer of the G4 network, goes back a long way with McEnroe, the ex-president of AMC Networks. They were both part of the team Rainbow hired in its early days, back in 1980.

"I'm as surprised as everybody else is," Green said. "Twenty-three years in the business, to leave this way?"

McEnroe was one of 14 employees fired by Cablevision Systems Corp. last week, after an internal probe uncovered allegedly improper expense accruals relating to marketing, "and in some cases, fabricated invoices."

One person dubbed the matter "Adelphia, Part 2." Another referred to it as "Katie-gate."

In hindsight, there was at least one possible tip-off that trouble was brewing at Rainbow. During the National Show in Chicago, Rainbow president Josh Sapan was called away, abruptly canceling his appearance on a prominent general session panel. McEnroe didn't attend the show.

'Hope for best'

Green, like many others, was floored by the allegations against the 48-year-old McEnroe.

"It is absolutely not in her character," Green said. "I am very surprised and shocked and hope for best for her.

"I'm most concerned about her and her family. I hope that whatever comes out of this, she finds some comfort in having two wonderful children. Hopefully she and her family will see her through this, because it's hard to believe."

Said Palmer: "False invoices? That's not Katie. Katie's a fanatic, but she would never do that."

Several industry executives warned that there should not be a rush to judgment about McEnroe, or any of the other 13 people let go last week.

"What we know at this point is what we're reading in the press," said Erica Gruen, a Rainbow veteran who is now a principal at Quantum Media Associates. "In any situation like this, I think it's wise to withhold any judgment until there's actual facts being presented.

"Right now, there's really just a press release. It's not a substitute for hearing both sides. It's very sad."

Rainbow cadre

Reed thin, with her trademark shoulder-length blond hair, McEnroe, who could not be reached for comment, has been an active figure in the cable industry for decades. She was part of a circle of top female cable executives who all got their start at Rainbow in the early 1980s.

Que Spaulding, now vice president of sales and affiliate marketing at Starz Encore Group LLC, at that time was hiring for a Rainbow network that would later split into two channels, the R-rated Escapade [which later was sold and became Playboy TV] and Bravo.

He hired not only McEnroe, Green and Gruen, but also Sandy McGovern, now a consultant; Nicole Browning, now president of affiliate sales and marketing for MTV Networks; Pam Euler Halling, now senior vice president of marketing and programming at Insight Communications Co.; Mary Murano, now executive vice president of affiliate sales for Oxygen; and Lila Everett Reinhart, now senior vice president of marketing and communications for Scripps Networks.

Spaulding, who declined to comment, reportedly hired a lot of women sales people to blunt criticism of the racy Escapade.

Referring to Spaulding's hires, one source said, "They were all blonde and not bad looking. It was very early on in the industry, and they probably did stand out for being women on business on the road."

Up from Iowa

McEnroe is an Iowa native who did brief stints as a TV weathercaster and sportscaster before heading up Rainbow's sales office in Chicago in 1980. She had kept a relatively low profile in the industry the past few months, when Cablevision was conducting its probe.

She developed a reputation throughout the industry as a hard worker who scurried around the country, crafting distribution and programming deals for AMC and later successfully launching its spin-off, Romance Classics. That network was later renamed and repositioned as WE.

"She did everything for the company for 20 years," said one network executive. "Her whole life was dedicated to that company."

McEnroe was active in Women in Cable & Telecommunications, and received its "Woman of the Year" award in 1999. Earlier this year, she was presented with the president's medal from Marymount Manhattan College.

"I think Kate has had a distinguished career in cable, " Gruen said. "She is an incredibly hardworking and smart person."

Working mom

McEnroe's outlook and priorities changed when she married and then, in 2000, adopted two children from Romania. In May, she was profiled by The New York Times. McEnroe told the paper that having children "has completely changed me from being this TV executive who thinks work is the most important aspect of life."

Gruen said she respects McEnroe as a fellow working-mom executive.

"U.S. statistics show that women who become executives of that rank are much more frequently childless," Gruen said.

But life took a rough turn for McEnroe last year when she began to go through a messy divorce, which still has not been resolved. Her higher-ups at Rainbow and Cablevision reportedly were not happy about those proceedings.

"She had become an inconvenient woman to them," one of her confidantes said.

Although Cablevision chairman Charles Dolan was said to be most supportive of McEnroe through her marital difficulties, which include custody of her children, other company executives were said to be growing "impatient."

More recently, McEnroe has been working with consultant McGovern on Cablevision's planned new direct-broadcast satellite service, according to sources.

McEnroe was let go on Saturday, June 14, several days before Cablevision publicly announced the probe and fired the other 13 AMC staffers, sources said.

Some of the other 14 were fired, several by cell phone, after Cablevision put out its press release last Wednesday afternoon, according to sources.

Lines of succession?

Speculation has been rife about McEnroe's permanent successor, as Sapan fills in temporarily. Kathleen Dore, president of Independent Film Channel Cos., and even Brad Siegel — an ex-AMC official who recent left Turner Broadcasting System Inc. — have been cited as possible replacements. IFC general manager Ed Carroll has been mentioned as a possible replacement general manager for AMC.

Industry executives continue to be perplexed by the allegations raised against McEnroe and the other AMC officials fired.

"The odd thing about it is about $6 million from a company with $3 billion in revenue," one network chief said. "It's not at the level of an Enron or Adelphia situation. It's hard to tell what the truth is."

Other observers questioned how Rainbow and Cablevision higher-ups could not have been aware of any accounting issues at AMC.

"She probably had to fall on the sword because she's president," said one industry veteran.

McEnroe also worked at Rainbow with Joe Schramm, president of Schramm Sports and Entertainment.

"I find this situation very sad," Schramm said. "I've always respected Katie and found her to be a great leader … I've placed a call to Kate and been in touch with some of her close friends. I don't completely understand what the allegations are, but my feeling is that Kate always has what was best for the company at heart."

Palmer said that McEnroe has left her stamp on the cable industry.

"I hope she finds something else and continues to leave her stamp on the industry because she's a tremendous talent," Palmer said. "She's one of the smartest people I ever met in the industry. She's unbelievably dedicated and competent."

Marianne Paskowski, Simon Applebaum and R. Thomas Umstead contributed to this story.