NBC Universal, Partners, Buy Weather Channel
Seller, Landmark Communications, now faces the challenge of divesting less desirable print and station affiliate broadcast properties in a down market.
July 7, 2008
NBC Universal, Bain Capital and the Blackstone Group have agreed to a deal with Landmark Communications to take Landmark’s Weather Channel, the 24-hour television forecaster and Web property.
NBC, which already has a forecasting segment, called WeatherPlus, will continue to see a dominant share of viewers looking to tune into weather news with the acquisition. An individual familiar with the ongoing negotiations—the Weather Channel has spent more than six months in the auction process—said CBS parent Viacom, FOX parent News Corp. and Time Warner were among media conglomerates weighing a deal for the station.
The deal also marks a successful play for its private equity backers; sources who worked on the earlier stages of the auction said financial sponsors would likely be hampered by the inability garner debt to outbid media platforms which would have multiple synergies to The Weather Channel’s applications.
Landmark Communications executives, who were earlier in the year projecting a potential $5 billion sale price, saw a deal that hovered more closely to the $3.5 billion mark, according to one individual familiar with the auction process.
“This will further position NBC Universal as the leading provider of news, information and weather, both online and on television,” said Jeff Zucker, NBC president and chief executive. “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.”
Now, Landmark is posed with the challenge of monetizing less-valued assets from its portfolio as it continues its breakup; a company source said that it is expected Landmark will scatter itself to the wind by the end of this calendar year.
Earlier this year, other industry sources said, Landmark Communications’ push to sell CBS affiliate stations in Nashville, Tennessee, and Las Vegas, Nevada, were stifled by uninterested potential bidders. Landmark is also selling four major daily newspapers, two in Virginia, one in North Carolina and another in Maryland. It also owns more than 120 community and special interest publications across 16 states. The disbanding conglomerate also runs marketing outfit Dominion Enterprises as well, which was once part of a joint venture with Cox Communications, until two years ago.
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