Financial News Network


The Financial News Network was an American financial and business news television network that was founded by Karen Tyler, Rob Fisher, Rodney Buchser and Dr. Glen H. Taylor, in conjunction with financial management firm Merrill Lynch. Launched on November 30, 1981, the channel was bought by NBC in February 1991, and had its operations integrated with rival cable financial news network, the Consumer News and Business Channel, on May 21, 1991.

Early history

Founding

Financial News Network was co-founded in 1981 by Glen Taylor, Chairman, Karen Tyler Head of Production, Rob Fisher, VP Business Affairs, and Rodney Buchser supported WCIU Chicago and KWHY with the initial limited 'ticker scroll'. In 1969, Registered Investment Advisor Eugene Inger, joined Channel 22, and expanded financial television in Los Angeles with reporting, analysis and broader coverage. Inger expanded service to the San Francisco area in 1970 on KOFY, Channel 20. He also provided financial TV programming to KDNL in St. Louis, and pioneered WKID Channel 51 serving South Florida. During this time, FNN began programing on Channel 18 in Los Angeles in competition with Inger and KWHY.
Later, in 1975 via Newark, New Jersey-based WBTB -TV, an independent station – owned at the time by Blonder-Tongue Broadcasting – which served the New York City market, was 'dark'. Inger revived the station by investing in Channel 68, and served as General Manager, as well as hosting a daily Wall Street programming block on WBTB starting in the fall of 1975. Keith Houser, the station's assistant general manager, worked with vendors to facilitate the ticker tape crawl across the bottom of the screen with a delay, as was required at the time. The ticker ran across the lower third of the screen, with stock prices on the top band and index prices on the bottom band. After the first year of programming, the SEC permitted just a twenty-minute delay. The concept was well-established both by WCIU Chicago, KWHY Los Angeles, Inger's day-long market coverage in Fort Lauderdale/ Miami. During the years, FNN also grew affiliates that generally not overlapping Inger's targeted markets. However, Inger eventually '
"affiliated" with FNN, via an arrangement that took some programming and data feed from FNN, while retaining local coverage and interviews hosted on his station. The Chicago and Los Angeles stations evolved independently.
KWHY was the first television station on the West Coast to offer daily market news accompanied by a digital stock ticker "crawl" at the bottom of the screen, followed by WCIU in Chicago, KEMO in San Francisco, and FNN on Los Angeles channel 18. All this allowed stock traders and investors to be able to stay on top of market action without subscribing to an expensive stock quotation service. Computers at that time could not keep up with the full stock feed and as such, the ticker could only show pre-selected stocks, making the system highly manual and clumsy. Those were custom developments. Gene Inger's approach was simpler: take a feed from Reuters or UPI and split-screen a camera shooting the tapes, with studio programming on the top portion. Inger was independent and never had a personal or corporate role with FNN, aside from limited mutual program affiliation later. Inger did however, become an original Market Maven contributor to CNBC, which effectively absorbed all financial programming over time; with competition years later from Bloomberg TV and Fox Business Channel.
With the earlier launch of CNN by Ted Turner blazing the trail ; and subsequent to a 1975 TV Guide article about Gene Inger's programming success in New York, Taylor and Buchser realized that newly available technology made possible the marriage of KWHY / Inger-style live market reporting with on-screen quotes and the concept of national news via satellite. The early history of FNN was not highly profitable and, within a few years, Buchser severed his relationship with the fledgling network to launch a financial marketing services firm called FMS Direct. In its early years, FMS Direct produced infomercials and direct response television spots which more often than not, ran on FNN, the network he had helped to found. Harvey "Scott" Ellsworth, who was the creator and on-air host of the popular radio program Scott's Place, which aired on Los Angeles radio station KFI from 1967 until 1974 , was one of FNN's initial anchors.

Private financing

FNN received its early private financing from Biotech Capital Corporation, which later changed its name to Infotechnology, Inc. Biotech Capital was also one of the few publicly held "Business Development Companies" - governed by the Business Company Development Act of 1980.
In 1981, shortly before its Initial Public Offering, led by the Paulson Investment Company, Taylor, then the Chairman, resigned due to previous legal difficulties. Jeremy Wiesen, a professor of business accounting and entrepreneurship at the Stern School of Business, New York University, and formerly with the Securities and Exchange Commission, became Chairman. The network's principal audience were small investors.
FNN's principal studio was in Santa Monica, California, but it then established operations in New York, on the ground floor of Merrill Lynch's headquarters in Manhattan, where passersby could view its broadcast operations. Merrill Lynch was one of the initial private investors in FNN.

Over-the-air affiliates

At first, the channel aired only during daytime hours on a mix of broadcast stations and cable television providers. Over-the-air affiliates included:
In 1985, FNN severed ties with its broadcast stations and established a 24-hour cable-exclusive feed. At night, it began offering the Cable Sports Network, a venture between the Mizlou Television Network and Tom Ficara; this was subsequently replaced by SCORE, a mini-network that aired sports events and news. Also airing in the overnight hours was Venture, a series of long-form speeches by business leaders, and TelShop, a shop-at-home service.
In the late 1980s, Infotechnology Inc., the New York-based information technology and venture capital company which also owned United Press International, increased its position to 47 percent, and remained one of FNN's largest shareholders until Earl Brian, the CEO of UPI and FNN, was later convicted on fraud charges specific to UPI and FNN. At its height, FNN was available on 3,500 cable systems, reaching a potential audience of 35 million homes across the country. FNN moved into newly built modern TV studios and production facilities in the Wang building in Los Angeles and in New York's Rockefeller Center.

Later history

Financial scandals and accounting disputes

In 1990—only months after beginning its biggest advertising campaign ever—FNN fell prey to two of the main topics of its broadcasts, a financial scandal and an accounting dispute. During that year's audit, the network's auditor, Deloitte & Touche, discovered irregularities on the part of its chief financial officer, C. Steven Bolen. The irregularities were serious enough that Deloitte said its 1989 audit couldn't be relied upon. FNN launched an internal investigation and discovered what it called evidence of unauthorized payments that Bolen made to himself. Bolen was fired in October. In addition, Deloitte wanted FNN to report a $28 million investment into a data system for brokers as an expense. FNN claimed that this would push its balance sheet so far into the red that it would violate some covenants with its banks, as well as force a default on its line of credit. FNN replaced Deloitte with Coopers & Lybrand, and reported a $72.5 million loss for fiscal 1990. Needing a major cash infusion to stay in business, FNN put itself up for sale in November.

Proposed merger with CNBC

In February 1991, FNN reached a handshake agreement with a partnership of Dow Jones & Company and Westinghouse Broadcasting for $90 million. However, just a few days later, FNN agreed to an unexpected $105 million offer from NBC, owner of FNN's then two-year-old rival, CNBC. NBC had encountered problems getting cable systems to carry CNBC, and intended to merge CNBC with FNN. However, matters were complicated in March when FNN filed for Chapter 11 bankruptcy, triggering a lively bidding war for the network.
Group W and Dow Jones raised their offer to $115 million, only to be turned down on a technicality by Bankruptcy Court Judge Francis Conrad; Dow Jones and Group W refused to keep the bidding open until May 31, 1991. NBC then raised its offer to $115 million, which was accepted by Conrad. That decision, however, was overturned on appeal.
Group W/Dow Jones and CNBC both significantly raised their bids. Group W/Dow Jones offered $167 million, while CNBC offered $154 million. However, the CNBC bid included more cash, and the Dow Jones/Group W bid included payments that were tied to revenue targets over three years. Conrad awarded FNN to CNBC, feeling its deal was more realistic.

Closure

FNN ceased operations at 6:00 p.m. Eastern Time on May 21, 1991. CNBC immediately took over FNN's satellite transponder space, more than doubling its audience at one stroke, and branded its business day programming as "CNBC/FNN Daytime" until 1992; CNBC also effectively adopted the "look", news style of FNN as well as incorporated features of FNN's ticker into its own on-screen stock ticker. While most of FNN's employees were laid off as a consequence of the merger, a select number of FNN anchors and reporters were retained by CNBC.