Los Angeles Times

TV company Fuse Media files for bankruptcy

Jennifer Lopez-backed firm has lost millions of subscriber­s.

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Fuse Media Inc., a television broadcasti­ng company backed by Jennifer Lopez, filed for bankruptcy protection with a pre-negotiated plan that will cut about $200 million of secured debt.

The Glendale company filed for Chapter 11 protection after losing millions of subscriber­s. Fuse listed $201.2 million in assets against $242 million in debt, according to papers filed Monday in U.S. Bankruptcy Court in Delaware. The company’s 10.375% secured notes due in July traded at around 24 cents on the dollar on Feb. 13, according to Trace bond trading data.

Fuse Media is a digital cable and satellite television company that provides video-on-demand channels including Fuse TV and Fuse Music targeting millennial and Gen Z viewers, according to its website. Some of its shows include “T-Pain’s School of Business,” “Big Boy’s Neighborho­od” and “Future History.” The prenegotia­ted plan is supported by about 82% of the company’s note holders. Fuse aims to emerge from bankruptcy this quarter.

“Unlike many other companies in our industry, Fuse has been experienci­ng growth across platforms, but we have been unable to realize the full benefits of this progress because of the significan­t amount of debt on our balance sheet,” Mike Roggero, Fuse’s chief financial officer and interim chief executive, said in a statement.

The company was in talks with bondholder­s at the beginning of the year when it said it was “evaluating a range of opportunit­ies to strengthen our long-term financial position.” S&P Global Ratings said in a Jan. 15 report that Fuse couldn’t repay the July notes and would pursue a distressed exchange or face insolvency. At that point, Fuse had already lost more than 15 million subscriber­s — 20% of its total base — after Comcast Corp. and Verizon Communicat­ions Inc. dropped Fuse channels, S&P said.

The pay-TV industry is in a period of transition as media giants including Netflix Inc., Hulu and Amazon.com Inc. offer cheaper options. The changes caused a “material decline” in Fuse’s subscriber and revenue bases as a result of “cord-cutting” alternativ­es, Roggero said in court filings. Fuse reached about 61 million homes as of Jan. 1, making it one of the largest privately held independen­t cable networks in the United States.

Two months after breaking with Comcast and Verizon, DirecTV — owned by AT&T Inc. — claimed Fuse had breached its affiliatio­n agreement by failing to offer DirecTV an early right to terminate its contract. Fuse disputed the claims and filed a complaint for declarator­y relief.

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