NCTA 2014: Sean Combs Says Revolt Was 'Used as a Pawn' to Drive Up Fuse Price
Sean Combs said during the final opening session at the NCTA convention on Thursday that Madison Square Garden used his company -- parent of cable music channel Revolt TV -- to get a higher price when it sold the Fuse music network to NuvoTV, suggesting MSG never intended to sell the network to him.
"They tried to use us as a pawn in the situation," says Combs. "We're big men and women. We have our big pants on… We came in and drove up the price."
Combs said that when they first got involved NuvoTV was offering a lower amount. After they bid more, NuvoTV raised its bid. Combs didn't specify, but Revolt reportedly offered $200 million to buy Fuse.
NuvoTV, an English-language channel marketed to Latinos, is backed in part by singer-entrepreneur Jennifer Lopez, who once dated Combs.
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NuvoTV parent SiTV paid $226 million in cash and gave MSG a 15 percent equity stake in the combined Fuse and NuvoTV.
"We definitely set the price. We made it known," said Keith Clinkscales, CEO of Revolt. He said the offer showed Revolt was to be taken seriously and called the process "educational."
"You get to see how distributors work," said Clinkscales. "Most importantly, it allowed us to go ahead and engage in a process. We're only six months old and we made a credible run."
On Thursday, there were layoffs at Fuse in anticipation of the pending sale. Members of the public-relations staff were among those fired. In a statement MSG said, "We announced in early April that we reached an agreement to sell Fuse to SiTV Media, and these changes are part of that transition."
What NuvoTV and Revolt both wanted to buy was distribution. NuvoTV reaches about 32 million households, while Fuse TV reaches 73 million. Revolt may be in as many as 40 million. In recent years, it has become very difficult for independently owned channels to get distribution, especially if it seeks a monthly subscriber fee as well as carriage.
Revolt was a rare launch in the current climate, made possible because Comcast was fulfilling a promise to create some diversity channels as a condition for acquiring NBC Universal in 2011.
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Combs certainly isn't put off by not getting Fuse. He predicted in five years Revolt will be known as well in the cable universe as CNN and ESPN as a brand. He said after six months it is already the number one music channel in social media activity.
"We don't cover the conversation," said Combs. "We actually create the conversation."
"I'm going to give you a tip," added Combs. "And this is legal. If you had a chance to get down with Apple or Facebook when they were in the garage, that's where we are."
With MTV and BET no longer showing urban music videos, Revolt intends to fill the void, said Combs.
"If I put my mind to something, there's nothing I can't do," he said. "I promise I will make this the number one brand in music worldwide."
Clinkscales said they are targeting millennials, who often consume video differently than their parents. Speaking to a cable industry crowd at the L.A. Convention Center, he said the younger generation are not cord cutters, just nonstarters: "These folks are choosing not to use cable. You've got to give them a reason to come to cable. That's Revolt. Revolt is that energy."
Representatives for Madison Square Garden Company and NuvoTV declined comment about Combs statement regarding Fuse.