Primedia Discontinues Operations on Education Unit

Continues to 'Explore All Options' for Channel One

By Claire Atkinson

Published: December 20, 2006

NEW YORK (AdAge.com) -- Primedia is discontinuing the education segment that houses Channel One, according to a statement issued today. A spokeswoman for the company insisted this doesn't mean the business is closing.

Ad revenue for the schools-based network fell 28% for the first nine months of the year.

The statement, in financial legalese, reads: "The extent of the company's progress in exploring strategic options for the assets in its education segment will cause the company to classify this segment as a discontinued operation in the fourth quarter of 2006."

One executive with knowledge of the talks said Primedia is negotiating with an executive who may assume some of the liabilities of Channel One, which include the school contracts and the equipment and studio costs, along with the talent. Channel One helped launch the careers of CNN's Anderson Cooper and National Geographic's Lisa Ling.

'No final decisions'
While Channel One staffers, which number between 50 and 100, wait to find out their fate, a spokeswoman said: "No final decisions have been made. Primedia continues to explore all options relating to Channel One."

Primedia's education segment houses Channel One; the Films Media Group, which produces educational video; and Primedia Healthcare, another education firm. Channel One has been the target of two consumer-protection groups, Commercial Alert and Obligation Inc., which have urged marketers not to advertise on the schools-based service. The channel also was hurt by the loss of major U.S. government ad funding.

For the first nine months of the year, ad revenue in the education segment fell 27.8%, to $17.1 million from $23.7 million, while third-quarter ad revenue fell to $3.7 million from $4.2 million, off almost 12%.