Radio One Inc. and Comcast Corp. said yesterday that four investment firms have agreed to back their joint venture to create a cable channel directed at African-American viewers.
The radio and cable companies said yesterday that they have signed contracts to help finance $131 million over four years with New York-based Constellation Ventures and three other venture groups that focus on minority- and women-owned enterprises - Texas-based Pacesetter Capital Group, Silver Spring-based Syndicated Communications Inc. and California-based Opportunity Capital Partners.
Radio One will invest $74 million, and Comcast and the four firms will together invest $57 million in the network, to be called TV One. A breakdown of each company's share was not disclosed.
"It's a very tough financing environment out here right now, and the fact that we were able to get these kinds of partners to put up this money is testament to how unique this opportunity is," said Lanham-based Radio One's president and chief executive officer, Alfred Liggins III.
The cable station, scheduled to launch in January, will join at least two other networks serving a black audience, Washington-based Black Entertainment Television and Atlanta-based Major Broadcasting Cable Network. BET is considered the only viable one, industry experts have said.
Dennis Miller, managing director for Constellation Ventures, said his company is approached regularly by cable stations looking for funding. Constellation Ventures was attracted to the Radio One deal because of its partnership with Comcast, which has access to 22 million viewers, and because of Radio One's expertise at targeting a niche audience.
Radio One is the largest radio company that tailors its content to African-American listeners, and Comcast is the nation's largest cable provider.
"We've looked at about 50 cable channels in the last two years, and we think they're all daunting proposals to get launched in this marketplace," Miller said. "But we thought this market was underserved, with BET being the only one that really focuses on African-Americans, and that there was opportunity for this to succeed."
Constellation Ventures is a Bear Stearns Venture Capital Fund that invests in early to mid-stage media, communications and technology companies. Its portfolio includes College Sports Television, Salon.com and TheStreet.com.
Syndicated Communications, also known as Syncom, invests in minority entrepreneurs and underserved markets. Opportunity Capital Partners invests in telecommunications, technology and health care companies led by women or minorities. Pacesetter invests in minority- and women-owned broadcasting, communications, manufacturing and services companies.
Liggins said having the financing committed gives TV One, which will be based in Maryland, more time to focus on the nuts and bolts of finding content and station slots for the network. In March, Radio One hired Johnathan A. Rodgers, former president of Discovery Communications Inc.'s U.S. networks, to head up the channel.
The channel will seek as its primary audience black viewers ages 25 to 54 and include a mix of original and syndicated programming. It will not focus on music videos, a practice for which BET has been criticized.