Field Reports1 Aug, 2008 By: Thomas Haire, Jacqueline Renfrow Response
NBC to Buy The Weather Channel
NEW YORK — NBC Universal and two private equity firms, Blackstone Group and Bain Capital, are set to buy The Weather Channel Cos. from Norfolk, Va.-based Landmark Communications.
The terms of the deal were not disclosed, but sources close to the negotiations said the partners offered $3.5 billion for the sale. Pending approval, the merger will take place later this year. The Weather Channel will be managed by NBC Universal but will operate as a separate entity, based in Atlanta.
"This will further position NBC Universal as the leading provider of news, information and weather, both online and on television," Jeff Zucker, president and CEO of NBC Universal, wrote in a prepared statement. "Joining with The Weather Channel properties plays to our strengths in developing and programming cable networks and in producing and distributing high-quality content across multiple platforms."
The Weather Channel is seen in more than 97 percent of U.S. homes that have cable or satellite. It also has an online, interactive component and is the type of programming that is usually watched live, rather than previously recorded.
NBC Universal is getting a channel that could help in a time when broadcast ratings are low and networks are looking to bolster their cable properties. Cable networks have shown increased strength in advertisements, while broadcasters have lost advertising due to technology that allows viewers to skip the ads in prime-time television.
As for Landmark, the sale is the first major deal in a disassembling company. The company hopes to sell off the rest of its properties by 2009. The Weather Channel accounted for one-quarter of Landmark's 2007 revenues. The weather businesses are expected to earn about $550 million in revenue this year.
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