Rainbow Media Holdings, Inc. Acquires 10% of Salon.com in Brand Alliance

Salon.com and Rainbow to Develop New Weekly TV Series for Bravo


Salon Staff
December 6, 1999 8:18PM (UTC)

Rainbow Media Holdings, Inc., a subsidiary of Cablevision Systems Corporation (AMEX: CVC), and Salon.com (Nasdaq: SALN) today announced a 10-year strategic equity agreement. Reflecting a shared editorial vision, the agreement includes content exchange and development, as well as extension of each companys brands onto new platforms and to new audiences. In the first collaboration, Salon.com will develop new original television programming based on its Internet content for Rainbows film and arts network, Bravo.

Under the terms of the agreement, Salon.com will issue 1,110,000 common shares to Rainbow, representing approximately 10% of Salon.coms outstanding common stock. In exchange, Rainbow will provide Salon.com approximately $11.8 million in advertising and promotional time, delivered over several years, across Rainbows media properties. Salon.com and Bravo Networks will exchange content and cross-promote throughout their web properties.

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In addition to developing a new weekly television series for Bravo, expected to launch in 2000, Salon.com will provide its reporters and columnists to Rainbows MetroChannels, three channels dedicated to the New York Tri-State area. The two companies will jointly sell advertising on the new Bravo television series, as well as on each others Internet properties, providing media buyers with comprehensive online and television opportunities. Both Salon.com and Rainbow stand to benefit from each others proven expertise in brand development and distribution via the Internet and on television, respectively.

"As traditional and new media converge, we chose Salon.com as an Internet partner because of its editorial point of view and its unique position in the marketplace." said Josh Sapan, President and CEO of Rainbow Media Holdings, Inc. "This marriage will deliver a consistent brand experience to sophisticated consumers, providing context amid an exploding number of programming and media choices."

A cable programming pioneer, Rainbows portfolio includes sports, entertainment and news networks led by: American Movie Classics, Bravo, The Independent Film Channel, the MetroChannels, News 12 and seven regional sports networks including the MSG Network. Rainbow also holds a controlling stake in the Madison Square Garden Properties.

With editorial offices in San Francisco, New York and Washington, D.C., Internet leader Salon.coms network of 10 Web sites and 2 communities includes news, technology, arts & entertainment, books, health, media, people, travel and parenting.

The relationship provides significant opportunity for content collaboration between Salon.com and Bravo, as well as Rainbows other networks, including its recently launched MetroChannels. The agreement reflects the first of Rainbows two-pronged approach to brand expansion: first, Rainbow is seeking focused strategic alliances, consistent with its networks editorial voice; second, the company is creating new types of content in-house and launching brand-related initiatives on new platforms. Over the past two years, Rainbow has embraced the unique properties of the broadband environment, launching high speed entertainment content from AMC and Bravo Networks.

"We're excited to be entering this strategic relationship with Rainbow to develop Salon.coms first television series nationally," said Michael O'Donnell, Salon.com's CEO and President. "Cablevision and Rainbow are making significant investments in the Internet and convergence. We look forward to working closely with them over the coming years to leverage our content offerings in multiple ways, delivering more value to consumers, and potentially increasing sales."

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For Salon.com, the agreement with Rainbow launches its brand in more than 50 million households, by way of Bravo. The partnership comes at a time when Bravo is experiencing unprecedented growth and success. The network is watched by television's most demographically upscale audience, and has experienced 30% subscriber growth over the past year. In addition, Bravos viewers are significantly more likely than the average cable television consumer to be early adopters of new technology.

David Talbot, Salon.coms Founder, Chairman and Editor-in-Chief, will oversee the development of Salon.coms television programming, working with Rainbow executives, as well as Salon.com board members Norman Lear and former CBS President Jim Rosenfield. Salon.com will use the daily production from its network of Web sites and communities as a foundation to build compelling television programming.

"Over the last four years, Salon.com has become the destination on the Web for intelligent, independent voices -- from Camille Paglia and David Horowitz to Anne Lamott and Garrison Keillor," said David Talbot, Salon.com Founder, Chairman and Editor-in-Chief. "We look forward to injecting the same Salon.com character and attitude into a compelling television format."

The agreement is subject to the receipt of certain approvals.

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About Rainbow Media Holdings, Inc.:

Rainbow Media Holdings, Inc., a subsidiary of Cablevision Systems Corporation and NBC, is at the forefront of innovation in cable programming. Rainbow manages American Movie Classics, Romance
Classics, Bravo, The Independent Film Channel, MuchMusic USA, Rainbow Sports, News 12 Networks, and MetroChannels as well as the Rainbow Advertising Sales Corporation and Rainbow Network Communications. Rainbow holds a controlling stake in the Madison Square Garden properties, which includes the Madison Square Garden Arena Complex, the New York Knicks, New York Rangers and WNBAs New York Liberty professional sports teams, the MSG television network, and, most recently, Radio City Entertainment and a long-term lease on Radio City Music Hall. In addition, Rainbow is a fifty-percent partner in Fox Sports Net.

About Bravo Networks:

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Bravo Networks are comprised of Bravo The Film and Arts Network, The Independent Film Channel, World Cinema, Bravo International, IFC Productions and Next Wave Films. Bravo, The Film and Arts Network, is available to more than 50 million homes nationwide and offers critically acclaimed American and international films as well as performing arts such as dance, theater, classical music and jazz. Bravo Networks New Media has developed and continues to expand broadband content and Web strategies while pursuing video-on-demand and other interactive opportunities. Its interactive unit includes: Bravo Online (www.bravotv.com), dedicated to film and arts content; World Cinema Online (www.worldcinematv.com), the comprehensive online resource for foreign film fans; and the IFC Online and IFC Broadband (www.ifctv.com), helping to further the audience for independent film through high-speed and traditional Internet services.

About Salon.com:

Salon.com (Nasdaq: SALN; www.salon.com; AOL Keyword: Salon) is an Internet media company that produces a network of 10 original content sites and two communities -- Table Talk and The Well. Salon.com was founded by David Talbot, former arts editor of the San Francisco Examiner. Premier advertisers and sponsors of Salon.com include Visa, IBM, Lexus, Microsoft, Virgin.com, Intel, DrKoop.com, barnesandnoble.com and EDS. The network has relationships with 275 advertising sponsors. In September 1999, the site had 1.9 million unique visitors.

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Salon.com recently announced an e-commerce ticketing arrangement with CultureFinder.com and distribution arrangements for its books, news and technology content via Rocket eBooks and AvantGo. Salon.com also has distribution agreements with major online companies including America Online, Lycos, Go.com, Alta Vista, CNN.com and CNet. Its content is syndicated to North American newspapers through United Features.

Safe Harbor

This announcement contains forward-looking statements concerning advertising and traffic growth that involve risks and uncertainties including, among others, acceptance and effectiveness of advertising,
growth in use of the Internet, Salon.com's limited operating history, anticipated losses, the unpredictability of its future revenues, successful development of Salon.coms television show, competition, risks associated with system development and operation, management of potential growth and risks of new business areas, business combinations and strategic alliances. Actual results could differ materially from those discussed. More information about factors that potentially could affect Salon.com's financial results is included in the Company's filings with the Securities and Exchange Commission available at the SEC's web site (www.sec.gov). All forward-looking statements are based on information available to the company on the date hereof, and the Company assumes no obligation to update such statements.

Note: Salon.com is a registered trademark of Salon.com. All other company and product names mentioned are trademarks of their respective owners.

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