A&E acquires Lifetime
Abbe Raven will preside over combined companyIn what may have been the worst-kept secret of the summer, A&E Television Networks is officially acquiring Lifetime Entertainment Services per terms of a three-handed arrangement between Disney-ABC Television, Hearst and NBC Universal.
Once the deal closes, Lifetime and Lifetime Movie Network will be brought into the A&E fold, with AETN president and CEO Abbe Raven assuming oversight of the three major network properties (A&E, History and Lifetime nets). The brands will remain intact.
The principals indicated that the three current network heads will retain their positions.
Andrea Wong, president and CEO of Lifetime Entertainment Services, will continue to lead the two Lifetime ventures, while Bob DeBitetto and Nancy Dubuc will serve as president and GM of their respective properties. (DiBitetto runs A&E and the Biography Channel, while Dubuc heads History and its spinoff nets.) All three will report directly to Raven.
Before the reshuffling, Disney-ABC and Hearst each held a 37.5% stake in AETN, while NBC Universal controlled the remaining 25%. Once the dust settles, Disney and Hearst will each hold an estimated 42.5% stake in AETN, leaving NBC with about 15.5%.
The language of the contract includes a codicil by which NBCU may elect or be required to divest itself of its AETN holdings within the next 15 years, in which event Disney and Hearst would become 50-50 owners -- an arrangement desired by both companies. Financial terms were not disclosed.
NBC Universal sources denied the mechanisms were part of a long-term departure plan.
"This is not an exit strategy, this is to generate more value out of A&E," NBC Universal Television Entertainment chairman Jeff Gaspin said.
Raven said Lifetime fans shouldn't expect a major programming shift, as Wong has the network "on the right path" with the recent successful debuts of "Drop Dead Divas" and "Project Runway."
"We expect we will continue much the same as we have," Raven said. "There's similar corporate cultures in terms of how we approach the creative process, and Andrea and her team have done a fantastic job ... it's always great to walk into somewhere where there's a recent success and there's a platform to continue to develop original programming."
Raven said introduction of the Lifetime nets should make the AETN stable a great buy for advertisers seeking to reach a broad range of consumers. For the company, it offers more cross-platform marketing opportunities.
"What's fascinating about all of this and the thing I'm most excited about is that we will now, in a consolidated form, have brands that really cross over and are at the top of their respective demos," Raven said. "We have Lifetime, the No. 1 female-skewing brand, joining the very male History. And A&E is really evenly balanced between male and female viewers. So for advertisers looking for strong demos, we as a company will certainly be the place to come."
Given the intent to streamline departments, layoffs would seem likely. AETN said no decisions will be made until the deal actually closes, probably early in the fourth quarter.
For NBC Universal, the deal provides more puzzle pieces for cross-network ad sales dealmaking, though each network overall will continue to have its own sales department. Though the deal puts Lifetime into the same corporate family as NBC-Uni's female-targeted Oxygen, networks outside the new A&E umbrellas will be considered competitors -- just as A&E and USA Network now.
According to SNL Kagan, Lifetime generated $904.9 million in total revenue last year, of which $605.1 million was brought in from ad sales.
The move reunites Lifetime and A&E, which were conjoined under the Daytime and Arts banner in the early 1980s. The channel was split down the middle in 1984, a division that created the standalone networks. When the properties went their separate ways, Raven decided to go with A&E, serving as the new channel's director of production. She's been with the company ever since.
"I was there at the beginning, and so this is represents a lot of things coming full circle, for both me and the networks," she said.
Disney president and CEO Bob Iger tipped off investors to the Lifetime talks this spring during the Sanford Bernstein Strategic Decisions Conference in New York. Iger said Disney was examining ways to free up the ownership structure, noting that the company "leaves money on the table by not managing Lifetime and AETN as one company."
He added that while the conversations had been going on for some time, "unwinding a decades-old partnership gets kind of complicated. It takes two and, in A&E's case, three partners to tango."
Mediaweek senior editor Anthony Crupi reported from New York; James Hibberd reported from Los Angeles.