Sinclair Expressed Interest In Acquiring Weather Channel
03 August 2016 - 5:30AM
Dow Jones News
Sinclair Broadcast Group has expressed interest in acquiring the
Weather Channel's TV operations from private-equity firms Bain
Capital LLC and Blackstone Group LP, and Comcast Corp.'s
NBCUniversal, people familiar with the matter said.
Talks between Sinclair and the Weather Channel owners have been
off and on for about a year and heated up again recently, the
people said.
Last year International Business Machines Corp. bought the
Weather Company's digital assets for more than $2 billion. The deal
didn't include the company's cable TV channel, though IBM did
retain rights to the name "Weather Channel."
Sinclair has now emerged as a suitor for the TV network, though
there is no guarantee a deal will be consummated. According to
people familiar with the situation, a deal could be valued at
around $100 million.
A Weather Channel spokesman declined to comment. Sinclair
Broadcast Group didn't return calls seeking comment.
For Bain, Blackstone and NBCUniversal, a sale of the Weather
Channel at the valuation being considered, combined with the IBM
transaction, would highlight how the assets have weakened. The trio
purchased the Weather Channel and its other assets in 2008 from
Landmark Communications Inc. for about $3.5 billion.
For Sinclair, a Baltimore-based local television owner, the deal
would be its second foray into cable programming this year. In
January, it bought the Tennis Channel for $350 million. The Weather
Channel is one of the largest distributed networks on the dial,
with a reach of over 90 million homes.
Still, the long-term forecast for the Weather Channel isn't
sunny. Once a must-have for pay-TV distributors, the network has
lost some of its relevance thanks to changing technology and
consumption habits. Ratings for the channel are tiny as consumers
more often count on the internet and phone apps to keep tabs on the
weather.
Efforts to boost ratings by adding entertainment content and
hiring big name talent, including former "Good Morning America"
weatherman Sam Champion, didn't help. The company has had fights
with large distributors over the past few years who felt the price
tag for carrying it in cable and satellite packages was too high
given the shrinking ratings.
Concerns about consumers cutting the cord to their pay-TV has
made networks with smaller followings—and which aren't part of
bigger media conglomerates—more vulnerable to being dropped.
When IBM acquired the Weather Channel's parent last October, it
was telling that it didn't want the TV channel that was once the
backbone of the company. Instead it bet on its popular Weather.com
site and all the data it has compiled as well as its forecasting
resources and technology.
Sinclair, which owns or operates 164 television stations in 79
markets, sees the asset as providing synergies with its local news
and weather. However, it may have to persuade cable and satellite
distributors to continue to distribute the channel. Typically when
a channel changes ownership or goes through a major rebranding, it
can open a window for distribution contracts to be reopened.
Suzanne Vranica and Matthew Jarzemsky contributed to this
article.
Write to Joe Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
August 02, 2016 15:15 ET (19:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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