Financial News Network
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|Financial News Network|
Financial News Network (FNN) was founded in 1981 by two men: Rodney Buchser, who had been general manager of KWHY in Los Angeles, and Dr. Glenn F. Taylor. The concept originated in New York City via a Newark, New Jersey UHF independent TV station in 1975 on Blonder-Tongue Broadcasting WBTB-TV CH 68 (now WFUT) when Eugene Inger, a registered investment adviser, started his daily Wall Street programming in the Fall of 1975. Keith Houser, the station's general manager, negotiated with the New York SEC office to get the ticker tape to crawl across the bottom of the screen with a two hour delay, due to the SEC worrying that it might "destablize" the market. The ticker ran across the lower third of the screen, with stock prices on the top (white) band and index prices on the bottom (blue) band. After the first year of programming the SEC permitted just a twenty minute delay.
KWHY was the first West Coast TV station to offer daily market news accompanied by a digital stock ticker "crawl" at the bottom of the screen. Los Angeles traders and investors could 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 preselected stocks, making the system highly manual and clumsy. The first fully automated stock ticker to appear on television was in 1996 on the CNNfn network.
With the earlier launch of CNN by Ted Turner blazing the trail, and subsequent to a 1975 article published by TV Guide of the Gene Inger success in NYC, Taylor & Buchser realized that newly available technology made possible the marriage of KWHY's 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 aried on KFI-AM in Los Angeles from 1967 through 1974 IMDB Bio, was one of FNN's initial anchors.
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, Mr. Taylor, then the Chairman, resigned due to previous legal difficulties. Mr. 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.
- KSCI, Los Angeles
- WATL, Atlanta (now a MyNetworkTV affiliate)
- WPWR-TV, Chicago (also MyNetwork TV)
- KJTV (now KCIT), Amarillo (now a Fox affiliate)
- KNXV, Phoenix (now an ABC affiliate)
- WSWS, Columbus, Georgia (now independent station WLGA)
- KTWS (now KDFI), Dallas(now a MyNetworkTV affiliate)
- WKID (now WSCV), Miami/Ft. Lauderdale (now Telemundo)
- WWSG-TV, Philadelphia (now CW affiliate WPSG); replaced in late 1982 by WRBV-TV, Vineland, NJ (now Univision-owned WUVP)
- WCCO-TV Minneapolis, now a CBS owned-and-operated station
- KSTS-TV 48 San Jose, CA (now a Telemundo O & O)
In 1985, FNN severed ties with its broadcast stations and established a 24-hour feed on cable TV only. At night, it added 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 (chaired by Earl Brian) 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.
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 (Group W) 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 (at the time, CNBC was only in 17 million homes). 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.
FNN went off the air for the last time at 6 pm on May 21, 1991. CNBC immediately took over FNN's satellite transponder space, more than doubling its audience at one stroke. It branded its business day programming as "CNBC/FNN Daytime" until 1992. CNBC incorporated features of FNN's ticker into its ticker. While most of FNN's employees were fired, a few FNN anchors and reporters including Bill Griffeth, Ron Insana, Allan Chernoff and Joe Kernen were retained. Sue Herera, who joined FNN at age 21 and very soon became an anchor, moved to NBC and the brand-new CNBC prior to the demise of FNN. Griffeth and Herera were later reunited at CNBC and co-anchored Power Lunch until 2011.
- October, 1975 "TV Guide" article & 1976 FCC WBTB-TV Blonder-Tongue Broadcasting "Specialty Programming" Filings
- "Biotech Capital Corporation Reports Earnings as of June 30, 1987". NY Times. September 19, 1987.
- Kleiman, Robert (Volume 7, Issue 3, May 1992). "The risk-return attributes of publicly traded venture capital: Implications for investors and public policy". Journal of Business Venturings.
- Vesey, David (1988-03-30). "UPI Announces Business Plan - 1988". Downholders aka: downhold.org. Retrieved 2008-10-21.
- CNBC - successor in interest to the Financial News Network