CBS Gains Basic Cable Role Buying 50% of TV Guide NetworkRob Golum
CBS Corp. acquired half of the TV Guide Network and a related website, and announced plans to operate both with co-owner Lions Gate Entertainment Corp.
CBS, owner of the most-watched TV network, acquired the stake in the basic cable network TVGN and TVGuide.com from a unit of JPMorgan Chase & Co., according to a statement yesterday. Financial terms weren’t announced. A person familiar with the matter said last week CBS paid more than $100 million.
The acquisition gives New York-based CBS an outlet on basic cable for new shows and older ones, along with movies and programs from Lions Gate. The owners plan to announce a new programming and branding strategy later, according to the statement. The channel is available in more than 80 million homes, the companies said.
“This is a strategic way for CBS to use its content brands and gain access to a highly distributed basic cable network that has a lot of upside,” Chief Executive Officer Leslie Moonves said in the statement.
CBS rose 1 percent to $46.16 at the close in New York. The stock has advanced 21 percent this year. Lions Gate, the independent film and TV company run from Santa Monica, California, gained 0.5 percent to $23.92 and is up 46 percent in
The partners plan to combine CBS programming, production and marketing assets with Lions Gate resources in films, TV and digitally delivered content. Two recent Lions Gate movies, “The Hunger Games” and “The Twilight Saga,” were among the top grossing U.S. films last year, according to Box Office Mojo. The company also produces cable TV’s “Mad Men” series.
The tie-in with CBS, which is already carried by the biggest pay-TV services, would give TVGN leverage to raise fees and expand into more of the 100.4 million U.S. homes with television subscriptions.
TVGN, historically a listing to programs on other channels, has added regularly scheduled shows in recent years. The network will receive about 3 cents a subscriber per month this year, compared with 2 cents in 2012, according to estimates from researcher SNL Kagan.
JPMorgan and investor Allen Shapiro acquired the TV Guide Network stake for $123 million in May 2009. Lions Gate had purchased the channel and website three months earlier for about $250 million.
Lions Gate already produces shows for CBS. The company’s TV unit makes “Weeds” and “Nurse Jackie” for Showtime, CBS Corp.’s premium priced cable network.
Moelis & Co. and Wachtell, Lipton, Rosen & Katz advised the TVGN on the transaction.