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Starz Cuts Staff, Regional Hubs

Consolidation among the major MSOs continues to take its toll on premium networks, with Starz Encore Group eliminating 100 positions and closing four regional offices.

The moves follow similar cuts at Starz Encore rivals Home Box Office, which cut 20 employees in April, and Showtime Networks Inc., which axed 70 staffers that month.

Most of the positions were eliminated from Starz Encore's Englewood, Colo., headquarters, affecting employees in programming, marketing, public relations, accounting and finance. Twenty-six positions were eliminated at the company's regional offices in San Ramon, Calif., Buffalo, N.Y., St. Louis and Dallas.

Saving Some People

While Starz Encore eliminated 100 positions, officials said 35 positions had already been vacated before the cuts.

Of the remaining 65 positions that were eliminated, Clasen said he expects 20 to 30 of the employees who held those posts will be given other jobs within the company.

"The offices were closed mostly because they were left over from the days when we had 20 or 30 affiliates back in the mid-'90s," Clasen said. "We're now just as efficiently providing the kinds of support from the other locations where we are, either centrally in Denver, or have an office that's associated with one of our major affiliates, like our office in Philadelphia or our office in Atlanta."

The San Ramon and Dallas offices previously served regions operated by the former Tele-Communications Inc., and the Buffalo office housed Starz Encore employees who worked with Adelphia Communications Corp., which moved its headquarters from Coudersport, Pa., to Denver in April.

Clasen said the St. Louis office, which was located near Charter Communications Inc.'s headquarters, is no longer necessary since many top Charter executives are now based in Denver.

Comcast Effect

Starz Encore's recent carriage deal with Comcast Corp. — which will see the MSO pay Starz Encore fees for every customer that subscribes to the company's premium channels rather than a flat fee — also played a role in the restructuring, Clasen said.

In September, Comcast reached an out-of-court settlement with Starz Encore, after suing the company over a distribution deal Starz Encore had with the AT&T Broadband systems Comcast acquired in 2002. AT&T also fought Starz Encore's demands that it fork over $44 million to cover programming costs, and the Comcast settlement doesn't require the MSO to pay Starz Encore any additional fees to cover programming costs.

Starz Encore will take a financial hit without those payments to cover its programming expenses, and the company's programming department and its Starz Pictures unit lost several positions in the recent layoffs.

Clasen said the company has assigned more staffers to the Comcast account in hopes of selling Starz Encore to additional Comcast customers since the company will now be paid a flat fee for each subscriber. "A lot of what we have done in this reorganization is to put some additional specified resources onto Comcast for that reason," he added.

Following the office closings, Starz Encore will have six regional offices located near major affiliates. They're located in Atlanta (Cox); Philadelphia (Comcast); Stanford, Conn. (Time Warner Cable); Hoboken, N.J. (Cablevision Systems Corp.); El Segundo, Calif. (DirecTV); and Chicago, which serves Insight Communications Co.'s national division.

Marketing Tweaked

Starz Encore also restructured its affiliate sales and marketing departments. Several employees who previously reported to executive vice president of sales and marketing Jillaina Wachendorf will now report to Clasen.

Wachendorf will retain her title, but she will now work part-time for the company because of personal reasons, said vice president of corporate communications Tom Southwick.

Clasen's team now includes senior vice president of affiliate sales and sales operations Deborah Egner, who will be responsible for marketing and retention and be the corporate liaison for Comcast, Time Warner Cable, DirecTV Inc. and Cox Communications Inc. Egner will also oversee point of sale, marketing and sales communications for all affiliates.

Robin Feller, who was previously division vice president for the Adelphia account, will become vice president, point-of-sale strategy, reporting to Egner.

Also reporting to Clasen are senior vice president Bill Giorgio, who is responsible for Adelphia, Charter and EchoStar, and all division vice presidents. They include Andy Nigolian, who serves Comcast, John Ruff (Time Warner), Christine Carrier (Cox) and Susan Geiselhart, the national division vice president.

Clasen's direct reports also include Wachendorf, senior vice president of affiliate marketing Miles McNamee, vice president of strategic marketing Kelly Bumann, senior vice president of research and analysis David Charmatz and Southwick.