News Corp. finds buyer for Gemstar-TV Guide


The long nightmare is over for News Corporation. Macrovision has agreed to buy Gemstar-TV Guide for 2.8 billion bucks. That’s a tiny fraction of the value of the merger in 2000 that created the company, then valued at 14.2 billion, but at least News Corporation will get over a billion for its 41% stake. It and other shareholders will get 6.35, or the equivalent in Macrovision stock, for each share of Gemstar-TV Guide when the deal closes. The maximum cash payout will be 1.55 billion, with the remainder to be in stock. Macrovision, whose main business is technology to protect content from illegal copying, recently announced a deal to acquire All Media Guide Holdings, a provider of databases for entertainment products.

“Combining Macrovision’s and Gemstar-TV Guide’s solution portfolios will enable extensive libraries of commercial and personal protected content to be accessible on numerous devices through simple and intuitive guides. For example, consumers will be able to pull up a guide on their TV and receive personalized content and information regarding their favorite TV shows, read movie reviews before purchasing or renting a film, view personal photos, or tap into their music library,” the companies said in Friday’s merger announcement.

TVBR observation: It has been quite an adventure for News Corporation to untangle this mess. Merging TV Guide, which it then owned, with Gemstar’s high-tech systems for utilizing the TV Guide data and brand name seemed like a winner in 2000 and the stock price of the merged company went over a hundred bucks a share. But in 2002 the company became embroiled in a financial scandal when it was learned that Gemstar CEO Henry Yuen had been playing fast and loose with the numbers. He was ousted from the merged company, eventually was ordered to pay over 22 million personally in the fraud case and the company had to restate over 225 million in revenues reported in its SEC filings. News Corporation, which appears to have been the biggest victim of the fraud, can now wash its hands of the whole affair – but at a hefty loss.