New Urban Entertainment Television, the upstart cable network that counts mogul Quincy Jones as one of its principals, has laid off all of its news and programming personnel.
Employees were called into a meeting on May 2 where the layoffs were announced at NUE-TV's Washington, D.C. offices. Exact figures couldn't be attained, but employees put the number at 15 in the news department and another 20 in programming.
Several employees, speaking on condition of anonymity, said they suspected something was in the air when company pagers and cell phones were picked up during the week of April 12. They also said when direct deposit on checks were cancelled last Thursday, and when they only received half of their pay the following day, the writing was on the wall for the company that has battled financial problems since January, when the first round of layoffs were announced.
Those attending the announcement were Robert Townsend, president and chief operating officer; Cindy Mahmoud, executive vice president and chief programming officer; and Patricia Irvin, executive vice president and general counsel. Conspicuous by his absence was Dennis Brownlee, chairman and CEO.
Townsend told the Black America Today News Report that the layoffs were necessary.
"This is something that we need to do for efficiencies as we close on our financing and continue to build up the business," he said.
Clarence Brownlee, chairman and CEO of NUE, said the company is not closing its doors. "It's not correct that we're closing down. That's not correct at all," said Brownlee, who along with Townsend, referred all calls to their PR firm, Rogers & Cowans. Phone calls to that company's representative were not returned.
An official close to the company said NUE executives are engaged in "some significant, high-level" discussions that could result in a major partnership. "This is all part of a master plan," the source said. Another source said those conversations include a potential partnership with AOL-Time Warner.
But only time will tell whether those high-level conversations will turn into substantive action.
"We've been hearing 'it's coming, it's coming' since we started," one laid off employee said.
Great promise in the beginning
NUE-TV burst onto the scene with great fanfare in July when Townsend, Brownlee and Jones announced plans to launch the network and offer programming that would compete with Black Entertainment Television for the black/urban audience.In addition to the business background of the senior management team, NUE players also included several executives from BET, and cable television veteran Leo J. Hindery Jr., sports agent and executive David Falk, and partners Radio One, Inc. and SFX Entertainment, Inc.
Company sources say their relationships with Reuters, Columbia Tri-Star, Paramount and AT&T Digital Broadband are still in place. Although available on large dish satellite, the network spent hundreds of thousands of dollars in creating original news programming, which included massive coverage of the Republican and Democratic national conventions, as well as the wedding of syndicated radio show host Tom Joyner to fitness guru Donna Richardson. One insider put the cost of the conventions and the wedding around $600,000. The productions looked slick and professional, but not enough people were watching to justify such massive expenditures, another employee said.
"We didn't need to cover the conventions. We didn't need to cover Tom Joyner's wedding,"the source said. "One million was spent on bullshit just to look good on the satellite."
NUE-TV executives were hoping to be in millions of cable homes by now, but several factors made that difficult:
Competition in the cable market. More and more cable networks are vying for the precious few slots available on cable systems. Oxygen Network launched with an even more impressive lineup of stars and media moguls and hundreds of millions of dollars of cash, but it has not been able to meet its goal of cable viewers. NUE also is competing with another black network, Atlanta's Major Broadcasting Cable Network, for the African American audience. That network's founders include Marlon Jackson of the Jackson Five, former baseball star Cecil Fielder, five-time heavyweight champion Evander Holyfield, Florida attorney Willie Gary and cable veteran Alvin James.
Viacom's acquisition of BET. When the mega-media company Viacom snapped up BET for $3 billion in November, that made NUE and MBC's job that much more difficult. Now a part of corporate company with deep pockets, Viacom will be better able to leverage the assets of BET than BET could have done on its own. Viacom also wants to increase BET's cable home availability from 65 million to 100 million.
Lack of capital. NUE and MBC have been feverishly working to raise up to $200 million in capital to move from a small potatoes network to a viable competitor with BET. But with the dot-com blowup, a soft advertising market, falling stock market and rising unemployment rate, it is hell trying to raise that amount of money. Speculation is rampant that NUE is looking to align itself with AOL. But again, speculation and conversation doesn't pay the bills.
By laying off the news and programming staff, NUE appears to be devising a strategy of using a barebones staff, mainly sales and marketing, to drive the network to be picked up by cable systems. NUE is available in 13 markets right now by virtue of its deal with AT&T Digital Broadband. It makes little sense to carry news and programming staff when the lack of cable viewers means diminished returns in terms of advertising.
But that means little to the employees who believed in the vision and purpose of NUE, but now find themselves in a tight job market - media companies all over the country are laying off employees because of the soft advertising market - looking for a way to pay the bills. "They basically had an opportunity to tell folks up front (about the financial problems) but they didn't," one laid off employee said. "They straight up jacked everybody, not just some."Copyright © 2015, The Baltimore Sun