Weather Channel deal puts synergy in NBC Uni forecast
After weeks of exclusive negotiations, the General Electric entertainment arm and private-equity firms Bain Capital and the Blackstone Group on Sunday announced a definitive agreement to acquire Weather from privately held Landmark Communications. The companies didn't disclose financial details, but sources said the price tag is close to $3.5 billion — well off the originally targeted $5 billion. The high original asking price, a lack of synergy for many bidders and different corporate priorities had caused the field of suitors to thin out since a first round of bidding in March. Time Warner dropped out of the auction last month.
Weather is the third-most-distributed U.S. cable network. With reach into more than 96 million U.S. homes, it enters more than 97% of U.S. cable households. Its Weather.com has nearly 40 million unique visitors per month, ranking it among the top 15 most-visited sites, the companies said. Plus Weather has a leading mobile content business with more than 6 million unique visitors per month. Overall, Weather has about 1,300 employees. Its annual revenue has been estimated at $550 million, according to the Associated Press.
NBC Uni's information assets include NBC News, MSNBC, CNBC and their Web sites, as well as digital weather network NBC Weather Plus. With the addition of weather.com, NBC Uni said its Web sites will have a total unduplicated reach of nearly 70 million visitors per month, ranking it No. 7 among all U.S. Internet properties and making it the leading provider of news and information on the Web.
"This will further position NBC Universal as the leading provider of news, information and weather, both online and on television," NBC Uni president and CEO Jeff Zucker said. "Joining with the Weather Channel properties plays to our strengths in developing and programming cable networks," he said. In an interview with The Hollywood Reporter, he pointed to NBC Uni's success with such network acquisitions as Bravo, Sci Fi and most recently Oxygen.
Cross-promotional opportunities are "a big part of this deal," Zucker said, mentioning NBC's TV stations, CNBC, MSNBC and such NBC shows as "Today" and "Dateline" as possible Weather content partners. NBC Uni uses CNBC to provide its stations with business news. "The Weather Channel will be used in the same way," Zucker said, adding that just the same way "Dateline" and MSNBC reports on weather issues would find its way to Weather.
Don't expect your local NBC weatherman to go away, though. "Weather has a crucial impact on local broadcasts," Zucker said. "This will not go away," even though Weather can enhance local weather reports.
The consortium of acquirers will operate Weather, which will remain based in Atlanta, as a separate entity, with NBC Uni providing management services. Blackstone Group is one of the owners of The Reporter parent the Nielsen Co. Allen & Co., whose annual media mogul retreat in Sun Valley kicks off Tuesday, was one of the advisors for the consortium. The transaction is expected to be completed by yearend.
Landmark executives, such as chairman and CEO Frank Batten and president and COO Decker Anstrom, do not go with the sale. Weather president Debora Wilson and other key network leaders are expected to be retained, but Zucker said personnel decisions will be made later.
Batten lauded the success of Weather over more than 25 years, including the fast that it has become a "multiplatform leader, which 120 million people use monthly." But he also indirectly acknowledged the need for the kind of resources that big media companies bring to the table. "As part of the NBC Universal consortium, the Weather Channel and its employees will have increased opportunities for growth," he said.
The consortium expects to continue pushing Weather across all its platforms. "This is a premier media asset with a unique position across all three screens — television, PC, and mobile — and exciting growth prospects in each of them," said Michael Chae, senior managing director at Blackstone. (partialdiff)