Fuse files for bankruptcy protection

Jennifer Lopez-backed US broadcaster Fuse Media has filed for bankruptcy protection after its CEO left and it was dropped by two major cable operators.

Jennifer Lopez

The Latino- and youth-focused cablenet has struck a deal at a bankruptcy court in Delaware that will see it reorganise its debt by reducing the amount owed to creditors, who largely supported the plan, by around US$200m.

The arrangement will cut the California-based company’s secured debt and reduce its interest payments, while enabling Fuse to continue operating and paying its staff. It is expected to emerge from Chapter 11 protection during the second quarter of this year. Fuse revealed in its filing that it had US$242m of debts against assets of US$201m.

It has been a turbulent four months for Fuse, which was dropped by US cable giants Comcast and Verizon in late December, prompting then-CEO Michael Schwimmer to blast the companies for not supporting diversity.

He subsequently left the company this month, four years after it was acquired from the Madison Square Garden Company for US$226m. Lopez had formed a strategic alliance with Fuse two years earlier through her firm Nuyorican Productions, which came a year after it had rebranded from NuvoTV in 2011.

Fuse, which was available in around 61 million homes at the start of the year, operates on-demand services including Fuse TV and Fuse Music, and is behind originals such as T-Pain’s School of Business, Big Boy’s Neighborhood and Future History.

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