By Kate Conger
By Brian Rinker
By Rachel Swan
By Anna Pulley
By Erin Sherbert
By Chris Roberts
By Erin Sherbert
By Rachel Swan
Yucaipa Corporate Initiatives' investment earlier this year in the cable channel is noteworthy for another reason. Yucaipa was chosen as a CalPERS investment vehicle as part of a competition among private equity funds to be included in the California Initiative Program, a CalPERS effort to foster economic development in "underserved areas" of the state. Of the $475 million doled out to the 11 entities in which CalPERS chose to invest as part of the program, the $200 million awarded to Yucaipa was by far the largest sum. CalPERS promotional materials describe the Yucaipa fund's objective as "[seeking] corporate partnerships to relocate or expand their operations in underserved areas." Asked how an investment in a San Francisco-based cable channel headed by the former vice president fit that criterion, CalPERS spokesman Brad Pacheco told SF Weekly that he would need to research the matter "and get back with you." He never did.
A Yucaipa spokesman says that the investment in INdTV had nothing to do with the participation of Gore and other prominent Democrats. Frank Quintero, the spokesman, says the involvement came about as the result of contacts between Renwick, the Yucaipa partner, and Mark Goldman, an INdTV executive who recently joined the Gore-Hyatt team and who formerly ran Rupert Murdoch's satellite operations in Latin America. Quintero offered no explanation about the "underserved areas" criterion, saying only that Yucaipa saw INdTV "as an opportunity to invest in a company that has a strong commitment to increase the representation of women and people of color."
But others are less sanguine. "It sounds as much like a political decision as an investment decision, even though it doesn't necessarily mean that the investment was a bad one," says Jim McRitchie, who heads PERSwatch, a CalPERS watchdog group. "You'd have to look at the financials and see if the thing looks like it's going to pay off." Charlie Oates, another CalPERS monitor who long published an independent newsletter for the pension fund's members, is perhaps more uncertain about the investment. "I don't claim to know anything about their cable channel," he says. "But I look at who the players are and where much of the money is coming from, and, am I suspicious? Sure I am."
When the Gore-Hyatt channel takes to the air, Newsworld International, the channel the duo acquired in May, will go dark. With its deadly serious programming (recent specials include Bosnia Gets Back on Its Feet and A Portrait of Shakespeare), Newsworld is the antithesis of a youth-oriented outlet. Still, it was attractive for its carriage rights: that is, the long-term contracts with major cable and satellite carriers for a place in their lineups, something no cable channel starting from scratch could hope to possess. It had been orphaned three times previously since the Canadian Broadcasting Co. started it a decade ago. Even the acquisition inspired right-wing radio hosts and other Gore bashers to weigh in. "Can you imagine?" cracked Tucker Carlson, Public Broadcasting's new token conservative, in a recent TV Guide interview. "Does the world need more Canadian television?" Hyatt claims to be unfazed by such barbs, lumping Carlson in with other "uninformed pundits" who've had a field day with the concept of Al Gore as TV mogul.
Of greater significance, at least according to some in the cable industry, is that Newsworld's meager 17 million subscribers -- fully half of whom are attached to Rupert Murdoch's satellite DIRECTV -- hardly offer the Gore-Hyatt team much of a platform to succeed. "In the cable business, you're dead in the water in terms of attracting advertisers until you reach 30 million subscribers," says John Higgins, deputy editor of Broadcasting and Cable, a trade journal. "The question is, 'How do they get there?' I don't see it."
With access concentrated in the hands of a few powerful cable giants, including Comcast and Time Warner, it is difficult enough for any channel not owned by a media conglomerate to break into the lineup. But skeptics say that may go double for Gore, who as a U.S. senator helped usher in regulation with the Cable Act of 1992 that cost operators a bundle. "It's hysterical in a sense," says Higgins. "Here's Gore now needing the good will of people who loathe him to provide carriage for his new cable channel."
When the former VP made a surprise appearance along with Hyatt in May at a convention of cable executives in New Orleans to announce his ambitions, the execs received him politely and then proceeded to savage him behind his back, say several sources who witnessed it. "I was a little shocked by it. There was clearly a lot of hostility towards Al Gore expressed behind the scenes," says Rene Schenk, a self-professed "dyed-in-the-wool Republican" and chief financial officer of Q Television, an upstart channel aimed at gays and lesbians.
Others discount the industry's anti-Gore factor.
"Sure, they'll make jokes, but the bottom line for the cable industry is that Al Gore is now one of them, and cable executives have to love that," says Thomas Hazlett, a former chief economist at the Federal Communications Commission and a fellow at the Manhattan Institute for Policy Research. He predicts Gore will soon "be on the other side" and will lobby against some of the same provisions of the 1992 law that he helped pass. "I don't think his history with the industry will cause a problem [for INdTV's channel]. Not when he can go up to Capitol Hill on the industry's behalf and get a quick audience with at least half of elected Washington."