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WGN Looks to Soar After Difficult Period

Taking advantage of TBS Superstation's conversion to abasic network, and following a big marketing push, WGN-TV has rebounded after facing adifficult stretch the past few years.

In the first quarter, WGN racked up sizable distributiongrowth, and it is looking for more of the same later this year. The superstation hasgained more than 1 million new subscribers as part of launches during the first threemonths this year, mainly by Tele-Communications Inc., Time Warner Cable and MediaOne.WGN's target is to pick up another 1.5 million homes by the end of the year.

"We've been very pleased," said DerkTenzythoff, vice president of programming services for UVTV, the network-provider companythat markets WGN. "And virtually everything [the recent launches] has been onexpanded basic, and not on tiers. We've always pushed WGN as a well-rounded servicefor expanded basic."

In another recent bit of good news for WGN, TCI willrestore the Chicago-based superstation -- along with Comedy Central -- to its programminglineup in the Denver metro area, which has 430,000 subscribers, as of April 16.

"Our objective was to launch WGN before the baseballseason got into full swing," said TCI spokesman Matt Fleury. "We think thatit's the right thing to do for our customers."

Denver was one of many markets a few years ago where TCIdropped WGN and other networks to make room for services that were paying upfront launchfees or that the MSO owned stakes in. WGN -- which carries Chicago Cubs and White SoxMajor League Baseball games -- and Comedy Central were dropped in Denver in December 1996.

Tenzythoff said there are several reasons for WGN'sbump up in distribution early this year. First, toward the end of last year, UVTV made anexpanded effort to market WGN, taking out various trade ads.

In addition, with TBS' Dec. 31 conversion to a basicnetwork, WGN saw a chance to gain carriage on some additional cable systems, according toTenzythoff. That's because the Federal Communications Commission only lets cablesystems carry a certain number of superstations, with anything above that prompting apenalty charge. A cable system has to pay an additional 3.75 percent of its gross revenueevery six months for an extra superstation, he added.

WGN didn't expect operators to drop TBS. But systemsthat are expanding their channel lineups and that now carry TBS as a basic network can, ineffect, substitute WGN as their superstation without facing any financial penalty.

"With TBS no longer a superstation, it gave us anopportunity to slide into a few markets," Tenzythoff said.

WGN, which now reaches about 35 million cable homes, hasmade a number of strides toward overcoming some of the challenges that it faced, datingback to late 1996 and 1997. At about that time, TCI dropped WGN in systems representingwhat some estimated at around 5 million subscribers in five Midwestern states -- althoughthe MSO restored it quickly in many of those DMAs, such as St. Louis, after a publicoutcry.

Tenzythoff said he can't provide an exact count as tohow many of the TCI subscribers have been regained to date, since in some cases, local TCIofficials never formally gave WGN notice that they planned to drop it.

"I can't give you a number, per se," hesaid.

Not so coincidentally, at the time of the TCI switch-outs,WGN was also battling with the National Basketball Association in court over its right toair Chicago Bulls games, and it had lost the rights temporarily.

"That impacted the drops, as well," Tenzythoffsaid.

But in fall 1996, he said, WGN won a reinstatement of thoseBulls games, and it now airs 15 Bulls games per year as part of a five-year deal. Thisyear, WGN will also televise 92 Cubs and 55 White Sox games, for a total of 147 baseballgames.

Recently, TCI not only restored WGN in Denver, but it gavethe superstation more than 750,000 subscribers by starting to carry it in markets such asOverland Park, Kan.; Pittsburgh; and Baton Rouge, La.

One could argue that WGN is getting carriage with TCI nowbecause of its corporate ties -- UVTV is part of United Video Satellite Group Inc., acompany that TCI now holds a majority stake in. But Tenzythoff downplayed that connection.

"It doesn't hurt," he said. "It mighthelp a little bit. But we're not counting on corporate. TCI lets its local managersmake decisions [on adding networks]."

In addition to being launched by TCI systems in the firstquarter, Time Warner rolled out WGN in DMAs such as Binghamton, N.Y., and Summerville,S.C., adding 153,000 subscribers to WGN's roster, and MediaOne added WGN to systemswith 68,000 subscribers in Palm Desert and Banning, Calif. In addition, WGN gainedcarriage with Jones Intercable Inc. in Oxnard, Calif., with 40,500 subscribers; St. JosephCable in St. Joseph., Mo., with 27,300 homes; and 4,400-subscriber Coaxial Cable TV inEdinboro, Pa.

It behooves these operators to carry WGN on expanded basicbecause the way that copyright and compulsory-license fees work, cable systems must payextra when a superstation is carried on a tier, rather than on basic or expanded basic,according to Tenzythoff.

"It's [basic] the cheapest way to carry thesuperstation," he said.

As part of its plans this year, WGN is also targeting cablesystems in the Northeast for carriage. That's because WOR-TV -- a New York-area TVstation with big appeal in the East because of its New York Mets baseball coverage -- isno longer a superstation.

"When WOR was a competitor, it made the Northeast moredifficult," Tenzythoff said.

WGN is closely watching how TBS fares this year with itsconversion.

"We've talked about converting to abasic network," Tenzythoff said. "We would consider it, but we're nowherenear doing it. We're watching how TBS does."