Broadcast Pioneer Once Again in New Territory

Since Lowell “Bud” Paxson stands 6-foot-6, it comes as no surprise when he says, “I think I’ve demonstrated an ability to see over the horizon, to see things before others can see them.”

It is not height but business acumen, however, that the 62-year-old broadcast maverick means to invoke in explaining his decision to launch the nation’s seventh broadcast television network. Pax Net is scheduled to go on the air in August with a full day of family-oriented programming that reflects the wealthy media mogul’s born-again Christian values.

Paxson has an impressive business resume. He founded Home Shopping Network; recently sold 46 radio stations, three sports networks and 348 billboards for $633 million in cash; and now owns more television stations--72--than anyone else in the U.S.

Still, the notion of taking on CBS, NBC, ABC, Fox and two smaller competitors with a mix of feel-good reruns--”Touched by an Angel” and “Dr. Quinn, Medicine Woman,” for example--and a bit of original programming strikes many observers as folly.

Since announcing his network plans last month, Paxson Communications Corp. stock has tumbled from $11 a share to less than $8. Paxson shares rose 25 cents to close at $7.75 in trading Wednesday on the American Stock Exchange. The stock was offered at $16 a share when it was listed on the American Stock Exchange in March 1996.

“This is high risk, and I’m still trying to get my arms around his assumptions,” said analyst Laura Linehan of Gabelli & Co. in Rye, N.Y. “I wouldn’t want to discount Bud’s ability to make things happen. He has proven himself before. But it’s a little bit of wait-and-see until the end of next year when those cash-flow numbers start coming in.”

Paxson is used to skepticism. “The analysts don’t see it. And there are always naysayers,” said the man who first confounded conventional wisdom 20 years ago when, as Uncle Bud, he went on the air at a floundering AM radio station on Florida’s west coast to hawk 10 dozen electric can openers in a performance that inspired him to start HSN.

“They said it wouldn’t work with radio, with home shopping and now with the network. They see me as another WB or UPN, and they are losing millions. But I’m not in the business of producing losers. They don’t own their stations; I do.”

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Indeed, the six dozen UHF stations owned by Paxson Communications include outlets in 19 of the 20 largest markets in the U.S., including KZKI-TV Channel 30 in the L.A. metropolitan area and WPXN-TV Channel 31 in New York. It is over these stations--which now run infomercials--that Paxson intends to air a mix of reruns, family films and original programming that he predicts will be visible in 83% of all American households by fall.

“Every show we’ve bought skews heavily toward women, because when it comes to drama, women control the set,” Paxson said. “I want everybody to watch a drama and at the end have that warm, fuzzy feeling. That’s what we will be known for: retailing warm and fuzzy.”

But can warm and fuzzy turn a profit? “Hard to assess,” said analyst John S. Reidy of Smith Barney Inc. in New York. “This is a new model. If they realize the ratings and cash flow that Paxson predicts, then it would be very successful.”

In his 40-year career in broadcasting, Paxson has become known as both innovator and huckster. HSN was immensely profitable, selling $1 billion of merchandise in its peak years. He acquired his first radio station right out of Syracuse University in 1954 and later founded a Christian broadcast network. When a recession drove down the price of radio stations, he bought them by the dozen at bargain-basement prices.

Since moving to West Palm Beach from Clearwater, Fla., and founding Paxson Communications two years ago, the onetime college-radio disc jockey has turned a $37-million investment into holdings currently valued at about $400 million.

But Pax Net is his biggest gamble. His hard-to-find UHF channels high on the dial have to be branded, Linehan said, “and he has to get people to wonder, ‘What’s on Pax Net?’ ” She and other analysts express doubt that advertisers will pay top prices for what Paxson admits will be fractional ratings shares.

“We don’t have to have ratings to be successful,” countered Paxson. “The law of click-click will do us well. People don’t watch networks, they watch shows.”

To pay for programming, including the nearly $1 million per episode he agreed to pay CBS for “Touched by an Angel,” Paxson said he will sell advertising time at a premium and collect $1 million a year from each of his stations. “That’s $70 million!” he exclaimed. He has trimmed staff “to 18 employees per station, and eight of those people are selling local advertising.”

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While waiting to move into high-rise corporate headquarters to be built amid a downtown renovation in West Palm Beach, Paxson operates out of a clubby, wood-paneled office on the second floor of a modest building alongside the Intracoastal Waterway. In a recent interview, the man who was an early proponent of all-talk radio proves to be an expansive talker himself. One minute he is slumped into a soft leather couch, reflecting on his Rochester, N.Y., boyhood, and the next he is sitting bolt upright, punctuating a statement about his intent to prosper even more in the coming age of wireless communications by extending his long arms into the enormous wingspan of a bird on the verge of flight.

“Work is my fun, my world,” he said, “and making money comes with the territory.”

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But for Paxson, it is not just about making money now; it is about making money as a self-described “man of faith,” an entrepreneur with a Christian mission. Although as a boy he was dragged by his mother each Sunday to worship at a Presbyterian church, Paxson said religion had no role in his adult life until a night 11 years ago in a Las Vegas hotel room.

The story begins, Paxson said, “in Clearwater, on Christmas Day, 1986, after we had spent two hours opening gifts with the kids, when my wife said, ‘Let’s have a cup of coffee.’ And we sat down, and she told me she was leaving. With her boyfriend.

“I was broken, humanly bankrupt,” said Paxson, the father of five. Nonetheless, he said, “my kids rallied to me,” and they went on with a planned vacation to Las Vegas.

But Paxson was having no fun, despite his children’s attempts to cheer him up. Lying awake in his hotel suite one night, he said, “I got up, thinking, ‘They must have a Gideon’s Bible in here.’ ” He found it, began to read and, he said, found Christ and peace.

Since his spiritual awakening, Paxson said several of his business dealings have been aided by divine assistance, including the fateful U.S. Supreme Court decision in March that affirmed the federal “must-carry” law requiring local cable operators to include local broadcast stations in their offerings.

Recalled Paxson: “As a man of faith, I said, ‘Lord, you’ve got to help me with this.’ And he said, ‘Don’t worry about must-carry.’

“Now biblically, you’re not supposed to know the future. But after the Lord told me not to worry, I went out and bought 50 more stations.”

Although Paxson said he does not plan to use his network to promote Christianity, his faith will determine what Pax Net will air. “I don’t know what he might like, what he watches on his television,” Paxson said with a nod toward the heavens. “But he might not like nudity, bullets, violence, too much sex, not enough love.”

Paxson said he knows his outspokenness about religion makes some business colleagues uneasy and leads others to shun him.

“People have come and said they’re not as happy with me as they used to be [because of my religion],” Paxson said. “They don’t think I’m the same person. But I’m not in a popularity contest. Maybe Donald Trump [a friend and Palm Beach neighbor] is. But I’m not.

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“I’m totally aware since 1986 of the direction my whole business career has taken, and the part the Lord played in it. So not to voice that would be wrong. I am not worried,” he added, “that you’re going to think of me as a freak, a nut job.”

Paxson said his growing commitment to his faith has led to plans to start a church. He and five other men have formed a board of stewards, and the nondenominational Christ Church of the Palm Beaches will open next fall.

While work is his calling and his pleasure, Paxson said he does try to have some fun with his money. He and his second wife, Marla, live in a $12-million, 35-room oceanfront mansion, and each drives a Rolls-Royce. His is black, hers white. He also owns three airplanes, a 132-foot yacht and a considerable collection of autographs of former U.S. presidents, kings, queens and entertainers. Among his collection are the signatures of Abraham Lincoln and Ozzie and Harriet.

Although Paxson hosted a benefit recently to raise money to combat the rheumatic disease lupus, which afflicts his 15-year-old daughter, he said he has no time for Palm Beach’s fabled high society. “Work is my excitement,” he said. “I don’t understand the motivation, but when you can play the game, you can be a game player. Michael Jordan will someday retire; I won’t.”