Jennifer Lopez-Backed NuvoTV Said to Make Offer for Fuse
Jennifer Lopez, the pop star and entrepreneur, is challenging her former beau Sean “Diddy” Combs as the two compete for Madison Square Garden Co.’s Fuse TV, people with knowledge of the matter said.
NuvoTV, an English-language cable channel for Latinos backed by Lopez, made an offer for the Fuse cable channel including cash and equity valued at more than $200 million, said the people, who asked not to be identified because the process is private. Combs has offered to buy the channel for about $200 million, people familiar with the situation said this week.
The bid makes rivals of the music moguls and former sweethearts, who dated more than a decade ago and each want to buy Fuse to gain distribution to 74 million homes, the people said. NuvoTV, based in Los Angeles, reaches about 34 million households through pay-TV operated by Dish Network Corp. (DISH), Time Warner Cable Inc. (TWC) and AT&T Inc. (T)
MSG, based in New York, said in September it’s working with JPMorgan Chase & Co. (JPM) to find a buyer for Fuse. It will select a winner by the end of the month, according to the people familiar with the process.
Kimberly Kerns, a spokeswoman for MSG, declined to comment, as did a spokeswoman for JPMorgan and Michael Schwimmer, chief executive officer of NuvoTV. Benny Medina, Lopez’s partner, declined to comment on her behalf in an e-mailed statement, and said a Fuse acquisition would be a “game-changer that we would support.”
Lopez, who holds a minority stake in NuvoTV, is the chief creative officer there and contributes programming through her Nuyorican Productions. The 44-year-old singer, actress and “American Idol” judge also advises the network on strategy and marketing.
NuvoTV raised $40 million in 2012 from Columbia Capital LLC, Rho Capital Partners Inc., Veronis Suhler Stevenson LLC and Tennenbaum Capital Partners LLC.
Lopez, also known as J-Lo, got her start as a dancer on “In Living Color” in the early 1990s. She went on to sell 70 million records, according to her website, and has perfume, jewelry and clothing lines, among other businesses. Her company produces “The Fosters,” an ABC Family series about a lesbian couple raising biological and foster children. She dated Combs, 43, from 1999 to 2001, according to US Weekly.
If successful, Combs would convert Fuse TV into his Revolt TV cable channel to gain higher subscription fees and wider distribution, a person familiar with the matter said this week.
Billionaire Ron Burkle, 61, is backing Combs’ bid for Fuse, said one of the people. Burkle invested $100 million in Combs’ Sean John clothing line, Women’s Wear Daily reported in 2003. Frank Quintero, a spokesman for Burkle’s Yucaipa Cos. investment company, declined to comment, as did Keesha Johnson, a press contact for Combs.
CBS Corp. and 21st Century Fox Inc. also looked at Fuse, said one of the people familiar with the situation. Dana McClintock, a spokesman for CBS in New York, declined to comment, as did Dan Berger, a spokesman for Fox in Los Angeles.
Michael Senno, an analyst at Credit Suisse, estimated in a Sept. 12 report that Fuse would receive bids of $200 million to $250 million.
The Dolan family, which spun Madison Square Garden off from Cablevision Systems Corp. four years ago, has been asking for about $400 million for Fuse, a person familiar with the matter has said. Al Jazeera acquired Current TV for about $500 million last year. Current reached about 60 million U.S. homes.
MSG decided to sell Fuse after various parties expressed strategic interest in the TV network, Hank Ratner, the former chief executive officer, said on a Nov. 1, 2013, earnings conference call. Tad Smith replaced Ratner as president and CEO last month.
The owner of the namesake arena in Manhattan and the New York Knicks basketball team gained 0.7 percent to $57.88 at 1:36 p.m. in New York, giving it a market value of $4.4 billion. The stock is little changed this year and gained 30 percent in 2013.