Some Fuse staffers began getting pink slips today as the operation readies to merge with NuvoTV. Meetings with various categories of employees were held throughout the morning, according to a source with knowledge of the situation, who described a waiting-for-the-tumbrel scene filled with confusion and consternation at Fuse’s corner of parent MSG‘s 11 Penn Plaza HQ. “We announced in early April that we reached an agreement to sell Fuse to SiTV Media and these changes are part of that transition,” an MSG rep told Deadline, declining to elaborate. According to one insider, it’s that age-old “taking a look at what we need going forward” post-merger story.
Early last month, the parent company of Jennifer Lopez’s NuvoTV agreed to buy Fuse from MSG. SiTV Media agreed to pay $226M — and give MSG a 15% stake, the entities disclosed. The total value of the cash plus equity comes to about $275M, Stifel analyst Benjamin Mogil estimated at the time. The company, where Lopez is a shareholder and Chief Creative Officer, outbid an offer from Sean Combs said to be around $200M. Fuse reaches 73M pay TV subscribers, and should boost SiTV and NuvoTV — a Latin American entertainment network that reaches about 34M homes. With Fuse “we’ll have the ability to deliver a broad array of terrific content both from a Latino perspective and across multiple genres, including music, to a broader audience,” Lopez said during last month’s announcement. “The acquisition of Fuse means we now own two wonderful assets. It’s a phenomenal time for our company and we look forward to growing both networks in the years ahead.”
SiTV CEO Michael Schwimmer added that the deal “provides substantial economies of scale” — as some Fuse staffers are learning first-hand today. Schwimmer also said, back in April, that the deal “enhances our distribution relationships, dramatically expands our aggregate subscriber base…affords unique opportunities for programming and cross-promotion and should be extremely appealing to the advertising community as we roll out our plans for both NuvoTV and Fuse.” NuvoTV plans to “create dynamic content” for Fuse’s street-front studio across from Madison Square Garden. MSG will get a seat on the SiTV board after the deal closes, expected by the end of September.
MSG shares were essentially flat on last month’s news. Some company watchers had expected Fuse to go for as much as $300M, based on the $500M that Al Jazeera paid for CurrentTV. MSG put Fuse on the block in September as it sought to boost its stock price, which has stagnated over the last year, and as some shareholders said they wanted the company to return cash to them, possibly by repurchasing shares. Cablevision CEO Jim Dolan is also Executive Chairman of MSG; his family controls 69% of its voting shares. In March, MSG tapped former Cablevision exec Tad Smith to be CEO, replacing Hank Ratner who held the top job since 2009.