NBC Universal is adding to its stable of cable networks with a 925 million bucks deal to acquire Oxygen Media. The women-oriented cable network was launched in 2000 by current Chairman and CEO Geraldine Laybourne, along with talk show host Oprah Winfrey and television producers Marcy Carsey, Tom Werner and Caryn Mandabach.
"In just seven short years, Oxygen has become the crown jewel of independent networks. It’s a terrific property with a clear mission, strong brand, and desirable audience. This acquisition increases our foothold in the advertiser-coveted young, upscale, female demographic, and perfectly complements our current roster of cable channels and plays to our strength of running and operating cable networks," said Jeff Zucker, President and CEO, NBC Universal.
The cable networks are a growth area for NBC Uni. They account for 50% of the company’s profits, and Zucker’s announcement notes that they are experiencing double-digit, year-over-year growth. Oxygen joins USA Network, Bravo, Sci Fi, CNBC and MSNBC in the NBC Uni cable portfolio. The company said Oxygen’s upscale female audience complements the viewers of Bravo and the “Today” show and visitors to iVillage. Oxygen will be merged into NBC Universal’s Entertainment Cable division, which is managed by Jeff Gaspin, President and Chief Operating Officer, Universal Television Group.
To help fund the deal, NBC Uni has put KWHY-TV (Ch. 22) Los Angeles and WKAQ-TV (Ch. 2) San Juan, PR up for sale as non-core assets of the Telemundo station group. Telemundo’s primary O&O in LA is KVEA-TV (Ch. 52).
TVBR observation: While approaching the billion bucks level, the Oxygen acquisition won’t make a big impact on the financial statement of NBC Uni parent GE. Nevertheless, the company was careful to point out the positive financial impact for Wall Street. Net of financial assets being acquired, the 925 million purchase drops to 875 million. Oxygen is carried in 74 million cable/satellite homes, so the price per sub is less than 12 bucks. Revenue and cost synergies of 35 million are expected in 2008. NBC Uni says it expects the Oxygen acquisition to be accretive to earnings after the first full year.