Daily News from New York, New York on October 13, 2000 · 440
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Daily News from New York, New York · 440

New York, New York
Issue Date:
Friday, October 13, 2000
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cn cn f. WDacmnnni TO stations ffoirce d to cut costs By PHYLLIS FURMAN DAI1Y NEWS BUSINESS WRITER Facing down an ad sales drought, "Survivor" network CBS is putting the squeeze on spending. General managers of 35 CBS-owned TV stations including WCBSCh. 2 are planning budget cuts that in some markets could be as high as 10, said a source close to the company. The cutbacks, first reported in The Hollywood Reporter, were ordered by the president of the CBS television stations division. John Severino, whose boss is hard-charging Viacom president Mel Karmazin, is hoping to keep pumping out profits despite a major meltdown in sales of ad time. "Mel Karmazin is focused on the bottom line," said Merrill Lynch media analyst Jessica Reif. "That's the way they run this company." A CBS spokesman declined to comment. WCBS will likely be spared major cuts because it's in the process of trying to raise its profile after years of lagging badly in the market, a CBS insider said. For example, the station recently invested heavily in airing the New York Senate debate between Hillary Clinton and Rick Lazio. "We're not doing that to make a profit," the insider said. Channel 2 is also planning a costly promotional campaign. But one broadcasting source said if the market remains weak, Channel 2 will also be forced to scale back. "When these budget cuts come down, generally everyone gets hit," he said. After enjoying ad sales increases of nearly 30 thanks to a rush of dot-com spending, New York's stations are bracing themselves for single-digit growth. "We're lucky now with the Yankees and the Mets, but the market has slowed down that's the reality," said Michael Wach, general manager of WNYWCh. 5. Cutbacks at the stations are one way to win back investor support for Viacom stock, which has declined sharply this year, one analyst said. "Investors appreciate that they are being proactive to maintain their goal of 18 cash flow growth," said Ed Hatch, media analyst at S.G. Co-wen. Jim Clark, CEO quit firm Jeffrey Arnold, the whiz kid who put together an Internet health services company with Netscape and Silicon Graphics founder Jim Clark, both quit the ailing start-up, which now goes by the name WebMD. Veteran health care exec Martin Wy-god became WebMD's sole CEO yesterday. The company, the byproduct of the 1999 merger with Healtheon, gave no reason for Arnold's departure. But its stock has slumped more than 80 this year as Wall Street analysts questioned its rapid expansion and plan to bring together various health care transactions over the Internet. The company also faltered as investors became disenchanted with Web companies that have yet to make any money. A week ago, chief technology officer Pa-van Nigam, who co-founded Healtheon in 1996 with Clark, also quit. Despite Clark's departure from the board, he remains one of the company's largest shareholders. The resignations come just two weeks after WebMD said it would slash 1,100 jobs to save money. WebMD shares, which reached a high of $75.19 in January, slid $1.19 yesterday to $8.50, a 52-week low. Times selects architect for HQ The New York Times has selected a team of architects lead by an Italian to design its new headquarters, sources said. Renzo Piano of Genoa, won a design competition held by the paper, according to sources close to the project. Fox & Fowle, the Manhattan firm that designed the Conde Nast tower in Times Square, will assist Piano. Piano's designs include the Menil art museum in Houston, the airport in Osaka, Japan, and the Pompidou Centre in Paris. He is known for giving buildings a high-tech look. Yet Martin Filler, a New York architec ture critic, called the selection "very disappointing." While the Osaka Airport is "probably the greatest transportation building in recent years," Filler said, "a lot of his commercial work is really terrible." The Times hopes to build a new 40-story headquarters on Eighth Avenue between W 40th and 41st streets. The Times' architects will likely earn between $10 million and $15 million for the 1.3-million-square-foot project, according to an industry source. Spokesmen for the Times did not return calls. Eric Herman Times Digital stock plan canceled The New York Times withdrew plans yesterday to sell stock in its online subsidiary, citing poor market conditions. The Times had filed for the initial public offering in January. But the downturn in Net stocks this 1 spring and continued THE market skittishness icu liic ivmycuiy iu i c- consider. "It's quite evident that today's mar ket is bearish on Internet companies, regardless of how well they are performing," said Martin Nisen-holtz, head of New York Times Digital. Disney's No. 2 to resign Disney vice chairman Sanford Litvack said yesterday he will resign at the end of the year to pursue his own goals, marking another high-profile departure from the entertainment giant's executive ranks. The 64-year-old Litvack, who joined Disney in 1991 as general counsel, was widely viewed as among chairman Michael Eisner's top lieutenants, and speculation after his surprise resignation was that he was upset rfter being passed over this year for the No. 2 post of Disney president in favor of Bob Iger. I jmmsmms j " " y : ' - -.- - "First payment is due 390 days and finance charges begm 360 days from contract date. Available through Mtsubsfti Motors Credit's Special Retail Plan, subject to approved credit and insurance. 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